Major retailers have announced flat or slightly lower electricity prices in New South Wales, Queensland and South Australia from July 2018 for households and small business. Sure, it’s a welcome change after the 15-20% price increase in July 2017 which sparked a lot of anger. At the same time Australia’s electricity prices are still too high.
July 2018 Electricity Prices round up
The major retailers have announced some very small price reductions in South Australia and Queensland, namely:
– 0.3-1.6% for AGL; and
– 1-4% for Origin Energy
New prices for these two retailers in NSW/ACT are flat (i.e. <1% change). EnergyAustralia hasn’t posted specific rate changes but have stated that rates in NSW, ACT and SA are flat while there are some reductions in Queensland. Some of the reductions in Queensland have been thanks to cuts in network charges by the Queensland Government-owned Energex network. While there has been a drop in forward wholesale electricity prices (which drove the large price increases in July 2017), the major retailers don’t seem to be passing much of that benefit on to customers – or at least not to those on their standing offers.
We expect most retailers in NSW, QLD and SA to release their market and standing offers in the first two weeks of July. By keeping the base rates in their standing offers at pretty much the same as in 2018 there is the opportunity for the major retailers to offer greater discounts (or alternately increase margins). Given the heavy discounting of household offers that occurred in NSW and Queensland in 2018, we expect there to be ongoing discounting to retain and win customers in those states. In South Australia, we see a lot fewer changes to plan prices than we do for Queensland and NSW, particularly by the largest retailers. For the sake of South Australian consumers, we hope retailers will compete more actively in the South Australian market in the coming year.
Little to get excited about
So what do the recent price changes announced by AGL and Origin Energy mean for households and small businesses trying to minimise their electricity costs in 2018? Unfortunately, there really isn’t much real relief in pricing after last year’s 15-20% price hike. Additionally, solar feed-in tariffs look to be going down with early indications of up to 20% drop in feed-in tariffs (eg. Powershop will drop their feed-in tariff from 12.8 to 10.2 cents in NSW from July 1). That won’t be enough to dampen the very high number of homes adding solar already in 2018 but it will annoy existing solar owners who will see their feed-in tariffs drop more in absolute and relative terms than retailers usage rates.
Solar feed-in tariff forecast not so sunny
For solar owners, its likely that feed-in tariffs will continue to fall into the future as utility-scale solar comes online in 2018 and beyond. The result of a big supply of energy in the middle of the day will be lower wholesale power prices, so retailers will pay smaller feed-in tariffs for solar in line with what they’d pay other generators. On the upside, this will increase the value of energy storage as the differential between buying grid electricity versus home-grown electricity widens. It seems whichever way that pricing goes there are real alternatives for consumers which is a great thing.
Will you be better off?
Regardless of whether you have solar, storage or neither, checking that your plan is still competitive is easy to do. Our whole of market electricity comparison service will be updated regularly throughout July as the new offers come to market. To find the best deal from all publicly listed plans in your area you can use our comprehensive comparison. If you’re thinking of adding solar our comparison service helps you to understand how much you’ll save by allowing you to add solar panels to your comparison.
