Power price increases set to continue
As Australia’s temperatures have been falling this winter, power prices have continued to rise. But it’s likely not over yet.
Default market offers leave energy retailers plenty of wiggle room
The release of default market pricing at the start of July paints a grim picture of the present, and sets a worrying precedent for the future with there being plenty of wiggle room for retailers to raise their prices until the default price p/kWh price cap is reached.
If you don’t know what the default offer is, it’s the most expensive price a retailer can charge you. It is set by the AEMO, the energy regulator. So while retailers may have lower prices this month, they can raise them up to the level of the default offer at any time.
Default Market Offer (DMO) price caps in place until July 1, 2024
The national energy regulator’s new market offer from July 1 has driven prices up between 19 to 25 per cent in most states. For some customers of energy providers like AGL and Origin, price rises have been even steeper (up to 50% for some consumers), leaving household budgets strained to breaking point. Below are a few examples of the DMO offers that retailers can charge this year compared to last year.
DMO Offers 2022 vs 2023
|DMO||Network Provider||Price ceiling this year||Price ceiling last year|
|VIC DMO||AusNet Service||39.55 cents/kWh||30.7 cents/kWh|
|NSW DMO||Ausgrid||46.71 cents/kWh||38.8 cents/kWh|
|SA DMO||SA Power Networks (SAPN)||56.8 cents/kWh||46 cents/kWh|
Even the energy companies themselves are warning us to expect more increases
A very real indication that power prices are about to increase further can be found in the last place you might have thought to look – from the large energy companies themselves!
One of the country’s largest energy providers, EnergyAustralia, has recently issued a disconcerting warning to its customers about the “unwelcome news” they’re likely to face in the near future.
In a recent email communication, they candidly discussed the “overall increase in the cost of supplying electricity” and cautioned account holders to brace for significant energy price hikes from August 1.
EnergyAustralia’s communication to their customers underline the gravity of the situation. “We acknowledge that it’s likely to be unwelcome news for you and many of our customers,” the energy giant wrote, highlighting a grim prospect of further price rises.
There’s no avoiding the fact that Australians will continue to be in the grip of a serious energy crisis – and the continuously increasing costs that come with it – for the foreseeable future.
AGL customers in NSW & SA see unprecedented price rises
As an example of how expensive powering your home with grid energy is becoming take a look at the below AGL examples,
The average AGL bill increase from July 1:
- NSW: 29.7%, or $540, per year.
- SA: 29.8%, or $565, per year.
- QLD, 26.4%, or $447 per year.
In extreme examples, an energy bill from an AGL customer in NSW showed a rise of 36.5%, while another resident had seen a lift of 37.3 per cent. And the biggest increase experienced by an AGL customer in NSW saw their power bill shoot up by a whopping 54.5 per cent.
Other retailers are following suit
EnergyAustralia is not the only provider sounding the alarm. Discover Energy and Origin are among other energy providers that have warned their customers of impending price increases.
Together these energy retailers serve millions of Australians, so these warnings don’t just carry the weight of scale, but sets the stage for other retailers to follow suit and adopt similar strategies.
A shocking amount of ‘bill shock’
Households are confronting power bill increases of up to $800, and as we head into the warm winter months across the country people are having to come to terms with the fact that blasting the aircon to keep cool will result in energy bill pain that that’s one step too far for a lot of consumers.
A sweltering summer could be on the cards
With El Niño threatening on the horizon, predictions also point to power prices spiking further over the summer due to El Niño effects on temperatures and weather patterns, leading to higher power consumption and demand as Australians strive to keep cool in predicted sweltering heat.
Experts say there is a 70% chance that El Niño will make an appearance this year, so chances are high that we will see some adverse effects as a result.
Both consumers and power companies will nervously be following updates about this weather phenomenon. With El Niño potentially sparking a tough fire season which has the potential to affect power infrastructure (poles and wires) which in turn could lead to frequent blackouts wreaking havoc for already beleaguered energy consumers.
This in turn has a knock-on effect on future prices as maintaining the poles and wires of the grid is expensive, and a cost that will in all likelihood be passed on to consumers in the future.
So, where can relief be found?
Solar can come to the rescue
But amidst this gloom and doom, there’s a shining light for energy savvy consumers – the transformative potential of an affordable and expertly designed and installed solar panel and battery solution to help reduce energy bills now and in the future.
Solar panel + a battery has the potential to shield Australian consumers from continued price increases by offsetting both day and night grid energy usage.
And with ever increasing grid energy costs, the silver lining is that solar and battery system payback times have drastically reduced – with payback periods down to under 3 years in some states. Read our battery payback blog here and use our handy calculators to see how long a solar and battery system from ShineHub could take to pay for itself.
Short and long terms savings
Not only does solar power present an opportunity to help save on energy costs in the short term, it presents a sustainable, long-term solution to Australia’s energy price and seasonal volatility that we are increasingly being exposed to as consumers.
Solar with a battery can provide significant savings* on electricity bills (often from day one) by providing you with your own energy that’s accessible day and night.
As traditional power sources become increasingly unreliable and expensive, and coal fire generators go offline, harnessing abundant, solar renewable energy offers a way to break free from the cycle of energy price hikes into the future.
It’s your own power
Moreover, with a solar battery, any surplus solar power can be stored for use during peak times or sold back to the grid, further offsetting costs. Not only does it save you extra money so you can cut down electric bills further, plus live the home lifestyle you want without making big compromises. Because the power is yours you’re free to use it when the grid is down during a blackout*^, or if the grid needs extra support during peak times you can sell your battery power back to the grid for an extra profit by joining the ShineHub Virtual Power Plant (VPP)^.
The Power of the ShineHub Virtual Power Plant
With ShineHub’s retailer independent free Virtual Power Plant, you are not just getting paid for your excess power ($0.55c/kWh) when some of it is discharged from your battery to help the community, you will also be helping to provide the grid with more lower cost renewable energy to help keep grid energy prices down for everyone.
And because it is retailer free, you have the flexibility to move retailers as you chase the best grid energy deal. And in the current market, it can pay to shop around for your grid energy provider.
A great first step is to use our Energy plan comparison service here.
Protect your future
Solar power isn’t just a reactionary measure to current crises, it’s an investment for the future. It could be the shield against the continued volatility predicted for power prices, helping Australians regain control over their energy consumption and costs.
The reality is that energy prices will likely remain unpredictable and susceptible to global market trends over the long term. But the power of the sun? That’s a certainty we can all bank on. So, as the energy crisis continues to cast a long shadow over Australia, it may be time to turn our faces to the sun and embrace the power and potential of solar energy.
Get a quote today and embrace a solar future
Australia’s energy crisis has created a challenging landscape for consumers, but it’s also created a compelling opportunity – to adopt solar power that offers more stability, sustainability, and savings.
As a counter to solar retailers and electricity companies who keep increasing their prices, you can take control of your power bill with an expertly designed solar system with a battery and start to power your life with sunshine.
The pain of power price volatility is real. Even the electricity retailers are warning customers that the pain is far from over.
It’s time to harness the power of the sun. It’s time to turn this crisis into an opportunity. An opportunity to secure yourself a better future.
*Savings vary according to individual circumstances. Terms and Conditions apply.
^Must sign up to the ShineHub VPP. Assumes Virtual Power Plant participation. ShineHub VPP terms and conditions apply.
*^Blackout Protection is for certain circuits of the home only.
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