The AEMC’s annual Residential Electricity Price Trends report provides a 10-year outlook for residential electricity prices and energy costs as households electrify in the National Electricity Market (NEM). This outlook is based on the Australian Energy Market Operator’s (AEMO’s) Step Change scenario and publicly available data as at 30 September 2025.

This report: 

• Projects how much the cost components or drivers that contribute to residential electricity prices might change during the next 10 years.
• Tests the electricity price outlook against a range of hypothetical scenarios to assess how variations in supply and demand conditions in the NEM could impact electricity prices over the next 10 years.
• Considers how households' total energy costs or their 'energy wallet’ could change as they electrify vehicle transport, heating and cooking, and install solar and batteries.  

We have incorporated new data into this year’s report and made several methodological refinements. Our intent is to progressively enhance our reporting to maximise its value.

Purpose

The purpose of Price Trends is to provide a 10-year outlook for residential electricity prices and energy costs, which can be used to:

1. Assess the impact of the changing energy landscape on residential electricity prices
2. Promote transparency through an independent price outlook, with publicly documented methods and assumptions
3. Inform policy outcomes by identifying the key enablers to keep electricity affordable and reduce energy costs for all households
4. Improve understanding about how households’ electrification decisions today could influence their future energy costs

Price Trends is not a price forecast, but an outlook based on AEMO’s Step Change scenario, and it is subject to risks, uncertainties and modelling limitations. These results should be interpreted only as a projection based on current data and assumptions – in reality, prices may materially differ from this outlook.

Key Results

1. We project prices to fall by 5% to 2030 as new renewables get built, and then rise by 13% during 2030-2035 if renewable deployment doesn't keep pace with growing demand.
2. There is still time to act to avoid a price rise through a faster renewable buildout, more flexible demand, coordinated use of consumer energy resources (CER), and increased network utilisation.
3. Delays to new renewable generation & transmission build, and sub-optimal CER coordination would put an upward pressure on prices.
4. Households that fully electrify can reduce their total energy costs by up to 90%, with a typical payback period of just 4 years.

Policy implications

This report highlights three key actions to ensure electrification benefits all households:

1. Reduce barriers to building new energy resources
2. Encourage a CER uptake that lowers peak demand
3. Provide all households with options to electrify

Background

The Residential Electricity Price Trends 2025 report is the second annual publication in this series with a 10-year outlook, following the first report released in 2024. We intend to continue updating our projections annually to account for new information and analysis in future publications.

Electricity price modelling – We modelled the full electricity cost stack – wholesale, network, retail and renewable/energy efficiency schemes costs – using the Step Change scenario from AEMO’s 2024 Integrated System Plan (ISP) as a base, and updated this with the latest information from AEMO’s 2025 Electricity Statement of Opportunities (ESOO), Inputs, Assumptions and Scenarios Report (IASR) and Electricity Network Options Report (ENOR).

Drivers and scenarios analysis – We identified overall trends in electricity prices and underlying drivers by region. We then analysed the potential impact of variations in supply and demand conditions on prices under different scenarios.

Energy wallet analysis – We estimated total annual household energy costs, including electricity, gas and petrol, to understand how much households could save through electrification and installation of solar and batteries.

This report is intended to help the energy sector plan ahead and make informed decisions that support Australian households in the transition to net zero.