Quick Answer
Your Victorian electricity bill has two main charges: a supply charge (~$1.00–$1.20 per day, regardless of use) and a usage charge (28–42 cents per kWh consumed). Most bills also include a solar feed-in credit, GST, and discounts. The easiest way to cut your bill is to understand your usage rate, shift high-draw appliances to off-peak times, and compare plans on the Victorian Energy Compare website — which can save $200–$600 per year for the same home.
The Parts of Your Electricity Bill Explained
1. Supply Charge (Daily Service Charge)
The supply charge is a flat daily fee for being connected to the electricity grid — you pay this regardless of whether you use any electricity at all. In Victoria, supply charges typically range from $0.90 to $1.30 per day ($330–$475 per year). This charge varies by retailer and distribution network (Powercor in Melbourne’s west and south-east, CitiPower in the inner city, Jemena in the north).
The supply charge is where retailers make much of their margin. It’s worth comparing — two retailers might charge the same usage rate but differ by $0.25/day on supply charge, which is $91 per year.
2. Usage Charge (Consumption Rate)
The usage charge is what you pay per kilowatt-hour (kWh) of electricity consumed. In Victoria in 2026, usage rates typically range from 28–42 cents per kWh on standard flat tariffs. This is the number most people focus on when comparing plans, and rightly so — if you use 15–20 kWh per day (typical Melbourne household), a 5 cent per kWh difference costs $275–$365 per year.
3. Time-of-Use Tariffs (Peak / Off-Peak / Shoulder)
Some plans charge different rates depending on when you use electricity. Common Victorian time-of-use periods are:
| Period | Typical Hours | Typical Rate | Best For |
|---|---|---|---|
| Peak | Mon–Fri 3pm–9pm | 40–55 c/kWh | Avoid if possible |
| Shoulder | Mon–Fri 7am–3pm, 9pm–10pm; Sat–Sun 7am–10pm | 22–32 c/kWh | Good for appliances |
| Off-peak | All days 10pm–7am | 10–18 c/kWh | Dishwasher, washing machine, EV charging |
4. Solar Feed-In Credit
If you have solar panels, your bill will show a feed-in tariff (FiT) credit for any excess electricity exported to the grid. Victorian minimum feed-in tariffs are set annually by the Essential Services Commission. In 2025–26, minimum FiT rates are around 3.3–5.5 cents per kWh for most plans (some retailers offer higher voluntary rates). This is much lower than the usage rate you pay (28–42 c/kWh), which is why it’s always more valuable to self-consume solar than export it.
5. GST
GST (10%) is applied to all electricity charges including supply, usage, and any service fees. This is non-negotiable — all Australian electricity retailers must charge GST. Your bill total before GST will be shown separately from the GST amount; check that GST is 10% of the pre-GST amount as a basic bill accuracy check.
6. Discounts and Concessions
Your bill may show a pay-on-time discount (typically 10–18% off usage charges if you pay by the due date), a direct debit discount, or a Healthcare Card concession. Victorian concession card holders may be eligible for the Winter Energy Concession ($215 per year) or the Electricity Concession — check DFFH Energy Concessions for eligibility.
How to Read Your Bill at a Glance
| Bill Section | What It Means | Action |
|---|---|---|
| Supply charge | Daily connection fee × days in period | Compare between retailers |
| Usage charge | kWh used × rate per kWh | Reduce usage or switch to cheaper plan |
| Solar credit | kWh exported × feed-in rate | Maximise self-consumption |
| Pay-on-time discount | % off if paid by due date | Always pay on time — or set direct debit |
| GST | 10% on all charges | Verify it equals 10% of pre-GST total |
| Average daily usage (kWh/day) | Your consumption vs same period last year | Track trends — big jumps indicate an issue |
Why Is My Electricity Bill So High? Common Culprits
| Cause | Typical Bill Impact | Fix |
|---|---|---|
| Resistive heating (bar heater, old slab heating) | +$300–$800/winter | Switch to reverse-cycle split system |
| Old fridge (2-star, 10+ years) | +$100–$200/year | Replace with 5-star model |
| Electric hot water (off-peak boost disabled) | +$200–$400/year | Enable off-peak schedule |
| Running pool pump 8+ hours/day | +$400–$800/year | Reduce to 4–6 hrs; use timer |
| Standby devices (TV, console, microwave) | +$80–$150/year | Use smart power strips |
| Wrong tariff for your usage pattern | +$150–$400/year | Compare plans on Victorian Energy Compare |
Tips and Gotchas
- Check your average daily usage kWh on every bill — compare to the same quarter last year. A sudden jump often means a failed appliance, a new device, or a billing error.
- The pay-on-time discount is enormous — 10–18% off usage charges can be worth $100–$300 per year. Always pay on time, or set up direct debit.
- Estimated bills are common and often wrong — if your meter wasn’t read in person, the bill shows an estimate. Request an actual meter read or check your smart meter data online to verify.
- Compare plans every 12 months — energy retailers regularly change their pricing and new offers appear. Victorian Energy Compare is free and independent.
- Feed-in tariffs vary wildly between retailers — some offer 5 c/kWh, others 10 c/kWh or more for solar exports. If you have solar, compare FiT rates as well as usage rates.
- Check if you qualify for concessions — Healthcare Card, Pension Card, and low-income households may qualify for $215+ in annual concessions that many people miss.
- Dual-rate meters may have wrong registers billed — on controlled-load hot water, occasionally meters are read incorrectly. If your hot water cost seems very high or very low, ask your retailer to verify the meter registers.
- Contact your retailer about hardship plans before falling behind — all Victorian retailers must offer hardship programs and cannot disconnect you while you’re on one.
Local Melbourne Resources
- Victorian Energy Compare — the official government tool to compare electricity plans in your area; free and independent
- Energy and Water Ombudsman Victoria (EWOV) — free dispute resolution if you believe you’ve been incorrectly billed
- DFFH Energy Concessions — check eligibility for Victorian electricity concessions and the Winter Energy Relief
- Powercor (SE Melbourne distributor) and Jemena (northern Melbourne) — contact your distributor, not your retailer, for meter issues
Frequently Asked Questions
What is the supply charge on my electricity bill?
The supply charge (also called the service charge or daily charge) is a fixed fee for being connected to the electricity grid, charged regardless of how much electricity you use. In Victoria it is typically $0.90–$1.30 per day ($330–$475 per year). This charge varies by retailer and is worth comparing when switching plans — a $0.20/day difference is $73 per year.
What is the average electricity bill in Melbourne?
The average Melbourne household pays approximately $350–$500 per quarter for electricity in 2026, depending on household size, heating type, and whether solar is installed. Households with gas heating tend to have lower electricity bills ($200–$350/quarter). All-electric homes with air conditioning and electric hot water are typically in the $400–$600/quarter range.
How can I check if my electricity bill is an estimate?
Look for the word “estimated” or “estimate” next to the meter reading on your bill. Smart meter customers can also log in to their retailer’s portal or the Energy Made Easy portal to see actual half-hourly usage data. If you have a smart meter, your bills should always be actual reads — not estimates.
What is a feed-in tariff and is it worth it?
A feed-in tariff (FiT) is the rate your electricity retailer pays for solar power you export to the grid. In Victoria, mandatory minimum FiTs are around 3.3–5.5 c/kWh in 2025–26. Some retailers voluntarily offer 8–12 c/kWh. Since you pay 28–42 c/kWh to consume electricity, self-consuming solar is always 3–8 times more valuable than exporting it — so use appliances during the day when your panels are generating.
Can I dispute an electricity bill I think is wrong?
Yes. First contact your retailer directly — they must investigate and respond within a set timeframe under the Victorian Energy Retail Code. If you’re not satisfied, contact the Energy and Water Ombudsman Victoria (EWOV) for free, independent dispute resolution. Retailers cannot disconnect you while a legitimate billing dispute is being investigated.
