Some states talk about affordability, others deliver it — especially when it comes to electricity. And if you’re a household or small business in Australia trying to cut back on rising energy costs, the state you live in matters more than you might think.

So, what’s the cheapest state in Australia for electricity? Here’s the short answer up front:

As of 2025, Queensland consistently ranks as the state with the lowest average electricity prices for residential customers, closely followed by Tasmania and Western Australia.

Let’s unpack why that is — and why simply switching providers isn’t always the only answer.

Why do electricity prices vary so much by state?

Electricity in Australia isn’t sold through a single national system. Each state either belongs to the National Electricity Market (NEM) or operates its own scheme. That means energy prices can vary dramatically based on:

• Wholesale electricity costs

• State-level infrastructure investments

• Renewable energy contributions

• Retail competition levels

• Government subsidies or rebates

It’s a bit like comparing avocado toast prices in Melbourne versus Alice Springs — same product, different realities.

Which state currently has the cheapest electricity?

Based on AER and state government data from late 2024 into early 2025, here’s a snapshot of average residential electricity prices (c/kWh):

✅ Winner: Queensland – consistently delivers the lowest average retail electricity costs due to state-owned generation and regulation.

Why is electricity cheaper in Queensland?

There are a few behavioural economics principles at play here — especially authority and consistency.

• Government-owned providers like Ergon and Energex have more control over pricing, and aren’t chasing profits like private retailers.

• The Queensland Government often subsidises electricity in regional areas, making pricing more uniform across the state.

• Unlike Victoria or SA, retail competition isn’t the main game — it’s about centralised stability.

This consistent approach makes Queenslanders feel safer staying put, even when new deals are dangled elsewhere — a textbook example of the status quo bias in action.

Are regional areas in Queensland also cheap?

Yes, surprisingly so. Thanks to the Uniform Tariff Policy, remote and rural Queenslanders pay similar rates to city dwellers. That’s rare. In most other states, going off the beaten track usually means your power bill climbs faster than a kangaroo on a trampoline.

What about solar and feed-in tariffs?

Here’s where things get even more nuanced.

Queensland offers competitive feed-in tariffs, especially for regional customers. Combine that with ample sunshine, and households with solar setups can significantly offset usage costs — in some cases, eliminating bills altogether.

But tread carefully. Some of the lowest-cost plans have lower feed-in rates, so the net benefit depends on your usage profile. This is where comparing apples with apples becomes tricky — and exactly why working with an energy broker can help households navigate the trade-offs.

Is it worth switching states for cheaper power?

Look, unless you’re already packing boxes, probably not.

Yes, your postcode affects your power bill — but moving for cheaper rates alone is a bit like driving 50km to save $5 on fuel.

However, if you’re running a business with high electricity usage (think cold storage, laundromats, or commercial bakeries), then setting up shop in Queensland or Tasmania could give you a genuine operating advantage.

What’s the role of the energy regulator?

Both federal and state regulators play referee in this high-voltage game. For example:

• Australian Energy Regulator (AER) monitors wholesale pricing and retail behaviours in the NEM.

• State regulators (like QCA in Queensland or ESC in Victoria) enforce local rules.

This layered system is meant to protect consumers — but it also explains why prices don’t always fall when generation costs do. Retailers are still running businesses, and they’re expert at anchoring prices even when conditions improve.

What should you do if you live in a high-cost state?

Here’s a behavioural nudge: don’t assume loyalty pays.

• Retailers often reserve their best deals for new customers — that’s reciprocity bias flipped on its head.

• Use energy comparison tools that are updated regularly. Look beyond headline rates — fees, discounts, and solar credits matter.

• Consider a broker if you’re managing multiple properties or bills — they can decode the fine print and do the switching for you.

FAQ

Q: Does solar make a big difference to your bill?

Absolutely — especially in sunny states like Queensland or WA. Just be sure your feed-in tariff aligns with your daily usage.

Q: Are government rebates still available?

Yes, most states offer concession schemes or emergency energy payments for eligible households. Check your state’s energy department website.

Q: Is fixed or variable pricing better?

Fixed rates offer peace of mind but might be slightly higher. Variable rates can go up or down — great if you’re ready to monitor the market.

Final thoughts

Electricity isn’t just about kilowatts — it’s about context. And right now, Queensland holds the crown for Australia’s cheapest electricity, thanks to a mix of government ownership, consistent policy, and consumer protections.

That said, there’s more to cost-saving than just location. If you’re serious about trimming your energy bills, working with an experienced energy broker can provide tailored advice that factors in your usage patterns, solar setup, and tariff quirks.

And if you’re wondering whether this will ever get simpler — well, you’re not alone. But until then, at least now you know where the savings are hiding.