Energy Prices Are Set to Rise in 2025 – Here’s Why Solar and Battery Is a Strategic Investment

Energy Prices Are Set to Rise in Australia 2025

From 1 July 2025, electricity prices across Southeast Queensland and Victoria will increase due to regulatory adjustments, wholesale volatility, and network cost pressures. For households and small businesses already contending with rising living costs, this change reinforces the value of installing a solar PV system to lock in long-term energy savings.

At Sunrays Power, we’ve seen firsthand how strategic system design can dramatically reduce electricity bills—and in many cases, deliver a complete return on investment within a few years.

Understanding the Price Rise: Market Mechanics Behind the Spike

Electricity pricing in Australia is influenced by several market factors:

  • Wholesale electricity costs: These are driven by supply and demand. Outages at old coal-fired generators and rising gas prices have put upward pressure on spot prices.
  • Network costs: These are regulated charges for the use of poles and wires. Network operators pass on maintenance, upgrade, and expansion costs to end-users.
  • Retail margins: Retailers layer their operating costs and margins over the wholesale and network costs.

Because of this structure, Default Market Offer (DMO) and Victorian Default Offer (VDO) rates—used as price caps for standing offers—are reviewed and reset annually.

Energy Price Increases – By Location

⚡Southeast Queensland (DMO – Set by AER)

In SEQ, Energex is the sole distribution network. The AER’s 2025–26 DMO determination reflects a moderate rise in electricity bills.

📈 SEQ Projected Annual Bill Increases (from 1 July 2025):

  • Residential customers (no controlled load): ↑ $77 annually
  • Residential customers (with controlled load*): ↑ $11 annually

*Controlled load tariffs apply to separately metered high-usage appliances (e.g. off-peak electric hot water systems or underfloor heating) that operate during designated low-demand periods.

These estimates are based on a reference consumption level of 4,600 kWh/year and 1,900 kWh/year for controlled load users.

 

⚡The Rest of Queensland (DMO – Set by the Queensland Competition Authority)

The CQA’s final determination isn’t out yet (as of writing this article June 23rd, 2025), but according to their draft determination published in March, bills are expected to rise:

  • Residential customers (tariff 11): ↑ $100 annually.

⚡ Victoria (VDO – Set by Essential Services Commission)

Victoria’s energy market is more complex, with five regulated distribution zones that have different requirements. The ESC’s 2025 VDO determination outlines the following average annual changes for residential customers.

📈 VIC Projected Annual Bill Increases (from 1 July 2025):

Distributor

Annual Change

CitiPower

↑ $90

United Energy

↑ $25

AusNet Services

↑ $6

Powercor

↑ $4

Jemena

↓ $26

 

While the statewide average increase is relatively modest at $20, individual households may feel a greater impact depending on usage habits and tariff structures—particularly if they are still on standing offers or consuming more during peak grid demand.

The VDO also serves as the benchmark against which market offers must be compared, helping consumers gauge value. However, no comparison beats the autonomy and savings of self-generation through solar.

⚡New South Wales (DMO – Set by AER)

New South Wales operates under the Default Market Offer (DMO) framework set by the Australian Energy Regulator (AER). Price increases vary by distribution zone, which reflects differences in local infrastructure and network charges.

There are three main electricity distribution networks in NSW:

  • Ausgrid: Covers Sydney, the Central Coast, and the Hunter region
  • Endeavour Energy: Includes Sydney’s Greater West, the Blue Mountains, Southern Highlands, Illawarra, and South Coast
  • Essential Energy: Spans most of regional and rural NSW—about 95% of the state by land area

📈 NSW Projected Annual Bill Increases (from 1 July 2025):

Distribution Zone

No Controlled Load

With Controlled Load*

Ausgrid

↑ $155

↑ $208

Endeavour Energy

↑ $188

↑ $271

Essential Energy

↑ $228

↑ $280

 

*Controlled load tariffs apply to separately metered high-usage appliances (e.g. off-peak electric hot water systems or underfloor heating) that operate during designated low-demand periods.

These increases reflect reference consumption levels set by the AER and may vary depending on household load profiles and retail tariff structures.

The Solar Solution: Secure Long-Term Stability

Whether you’re in SEQ, Victoria, or NSW, the 2025 price changes point to one clear trend: grid energy is becoming more expensive and less predictable. A well designed and installed solar system can help insulate your household from these price increases.

A well-designed system with the right orientation, inverter capacity, and load-matching (e.g. through hot water timers or pool pump scheduling) can dramatically reduce your imported energy from the grid.

At Sunrays Power, we regularly see solar installations that:

  • Reduce quarterly energy bills from $400–$600 down to $70–$100
  • Export surplus energy during the day to receive feed-in credits
  • Provide significant value through self-consumption optimisation

Allow for future integration with batteries or EV chargers

Real-World Example:

A client in Sinnamon Park, QLD, installed a 13.2 kW PV array with a 10 kW inverter (capped at 5 kW export under Energex single-phase rules). Their quarterly bill dropped from $600 to $71, aided by smart use of pool pump and electric hot water during daylight hours.

🔋 How Solar and Battery Storage Protect You from This — Forever

Installing a solar system alone offers significant savings, but when combined with battery storage, it can virtually eliminate your reliance on grid energy during expensive periods.

Here’s how it works:

  • Your solar panels generate electricity during the day. This powers your home directly while the sun is shining.
  • Excess solar energy that isn’t used immediately is stored in a battery system rather than exported to the grid at a low feed-in rate.
  • That stored energy is then available to power your home in the evening and overnight, when solar production drops off and grid prices spike.

Why this matters—especially on time-of-use tariffs:

If you’re on a Time-of-Use (TOU) tariff, energy used during peak periods (typically between 4pm and 9pm) is charged at a significantly higher rate. A battery system helps you:

  • Avoid purchasing power at peak rates
  • Reduce reliance on the grid during high-demand periods
  • Flatten your daily energy consumption curve
  • Achieve greater energy autonomy

In some configurations, batteries can also provide backup power during grid outages—a feature that’s becoming more valuable as extreme weather events become more common.

In simple terms: solar reduces your day-time consumption. Batteries let you carry that benefit into the night. Together, they shield you from rising prices—now and into the future.

Comparing Energy Plans Helps—But It’s Not a Long-Term Fix

Yes, tools like Energy Made Easy and Victorian Energy Compare are useful for comparing retail plans. Minister Chris Bowen estimates that up to 80% of customers can save up to 27% by switching from a standing to a market offer. This is why it is always important to check if there is a better deal for you.

But here’s the technical reality:

Even the best retail plan can’t shield you from the future trajectory of electricity costs. Solar, on the other hand, produces free energy at the point of generation, reducing your reliance on imported power.

What About Payback?

With the upcoming price hikes and current federal and state solar rebates still available, payback periods for solar systems are highly competitive.

Typical return on investment (ROI) periods for systems we install are:

  • 4–6 years for residential homes
  • 3–5 years for small businesses (especially those with daytime loads)

With panel warranties of 25 years and inverter lifespans averaging 10–15 years, the long-term value is undeniable.

Final Thought: Rising Prices Are Out of Your Hands—But Solar and Battery Isn’t

We can’t control global energy markets. But we can help you take control of your energy future.

Sunrays Power has helped thousands of Queenslanders and Victorians transition to solar. With our technical knowledge, custom system design, and deep experience navigating both urban and rural installations—including complex townhouse and apartment approvals—we’ll help you get the most from your roof.

📞 Contact us today for a no-obligation solar assessment, tailored to your property and energy profile.

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