What is going on with your latest Ergon bill?

by | Aug 26, 2025 | News Update

Why Electricity Rates Have Fallen While Network Charges Rise

From July 2025, households across regional Queensland noticed a shift in their electricity bills. On one hand, the cost of each unit of electricity (Tariff 11) fell slightly, but on the other, the daily supply charge increased. At the same time, solar households saw their feed-in tariff drop significantly. So what’s going on?

The Good News: Lower Tariff 11 Unit Prices

For most households on Tariff 11 — the standard residential electricity tariff in regional Queensland — the price per kilowatt-hour (kWh) of electricity fell from 34.07c to 32.97c from 1 July 2025. This is the result of falling wholesale electricity prices.

Why are wholesale prices lower?

  • More renewable energy is being added to the grid, particularly solar and wind, which provide cheaper electricity when available.

  • Coal and gas prices have eased compared to the global energy crisis peaks of 2022–23.

  • Queensland’s state-owned generators have helped smooth out market volatility and keep prices stable.

In short: electricity itself is cheaper to buy and supply than it was a year or two ago.

The Trade-Off: Higher Network Charges

While the cost of electricity has dropped, the cost of delivering it has gone up. Network charges — recovered through your fixed daily supply charge — rose from about $1.37 to $1.69 per day.

Why are network costs rising?

  • Aging infrastructure: Much of Queensland’s poles, wires, and substations are reaching the end of their life and need replacement.

  • Resilience and climate pressures: More frequent storms, floods, and heatwaves require stronger, more reliable infrastructure.

  • Solar and batteries: As households generate and export more power, the network must be upgraded to manage two-way flows and voltage stability.

  • Regional scale: Ergon’s service area covers one of the largest and sparsest electricity networks in the world, making maintenance per customer more expensive.

The result is a bill structure where the variable cost of energy (per kWh) is lower, but the fixed cost of accessing the grid is higher.

What It Means for Households

The impact on your bill depends on how much electricity you use:

  • High-usage households may benefit overall, since their lower unit cost can offset the increase in the daily charge.

  • Low-usage households, including many solar owners, may feel worse off, since the higher daily fee eats into the savings they make from reduced consumption.

For solar owners, the challenge is even sharper. The Queensland Competition Authority reduced the regional feed-in tariff by about 30%, to 8.66c/kWh from 1 July 2025. That means households earn much less for the excess energy they export to the grid, further shifting the balance.

Why a Home Battery Makes More Sense Than Ever

With a much lower feed-in tariff, it’s now less rewarding to send excess solar back to the grid. Instead, households can get more value by storing that solar energy in a home battery and using it later — for example, in the evening when grid power is more expensive. The new federal home battery rebate helps reduce the upfront cost of installation, making batteries a more practical and cost-effective choice for many households. By maximising self-consumption and reducing reliance on the grid, solar and battery systems can soften the impact of both higher supply charges and falling export payments.

Why Virtual Power Plants (VPPs) Are the Missing Piece

Another solution that could make a big difference for regional Queensland is access to Virtual Power Plants (VPPs). A VPP links thousands of household batteries together digitally, allowing them to work like one big power station. This means:

  • Households can be paid for helping to stabilise the grid when demand is high.

  • Communities benefit from better reliability during peak times.

  • More renewable energy can be used locally, reducing waste and curbing emissions.

Currently, most VPPs are only offered in southeast Queensland and metropolitan areas. Extending these opportunities to regional households would mean that families investing in solar and batteries could not only save on bills but also earn additional revenue by participating in the energy market. It’s a win–win for households and the environment.

The Bigger Picture

The changes reflect the energy transition in action. Renewable generation is making electricity cheaper, but the networks that connect us all require serious investment to stay reliable, resilient, and capable of handling a two-way, renewable-powered grid. As we move forward, ensuring this transition is fair — especially for households with low consumption or limited ability to invest in solar and batteries — remains a critical issue. Expanding VPP offerings into regional Queensland would be a smart step toward unlocking greater benefits for all.

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