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What’s a kWh?

What’s the average cost of electricity per kWh around Australia?

How much do electricity providers charge per kWh?

How is kWh used in my electricity bills?

Why do electricity prices vary from one state to another?

What other costs play into my electricity bill?

Frequently asked questions

Find an energy plan that fits your kWh use

Long story short

A kWh is how much energy you use in an hour

It’s a standard unit on your bill, used to calculate your usage charges.

Electricity prices vary by state

All states measure in kWh, but prices can differ due to wholesale prices, network fees and retailer margins.

Your bill includes more variables than just your usage

Daily supply charges and the type of tariff you’re on can impact the end figure.

What’s a kWh?

A kWh (kilowatt hour) is a unit of energy that measures how much electricity you use. A single kilowatt is equal to 1,000 watts, so 1 kWh can run 1,000 watts for one hour. Measuring the energy your appliances use in kWh is how all energy providers figure out a standard way to charge bills each quarter.

Energy usage measured in kWh is a constant feature on every electricity bill you receive. It shows you how much energy your appliances and household use and can also help you compare your usage against the average electricity bill pricing in your state.

What’s the average cost of electricity per kWh around Australia?

Australia’s electricity prices change from state to state; in Victoria, for example, the cost of electricity per kWh can range from 29 cents to 58 cents, but this depends on who your distributor is. This can also change depending on the type of tariff you’re on, whether you have rooftop solar and how you use your energy.

There are a lot of different factors that play into your electricity bill – and that’s without even thinking about retail competition. There are network costs that cover building powerlines, wholesale costs, environmental costs, and retail costs, just to name a few. They all play a part in making up those final electricity prices. Looking at the Default Market Offer and the Victorian Default Offer for 2026–27, which account for all these factors, you can see the difference in the charges per kWh across the country. Just remember these won’t necessarily be true for you, since there are other things to factor into your unique situation.

Note: These figures reflect average usage charges per kWh, based on 2026–27 data from the Australian Energy Regulator DMO Final Determination, May 2026 and the Essential Services Commission VDO Final Determination, May 2026 and rounded where appropriate. Internal iSelect calculations have been applied to this data. Data retrieved June 2026.

How much do electricity providers charge per kWh?

Electricity retailers in Victoria charge between around 25 and 35 cents per kWh. Your actual rate depends on things like your location, tariff type and provider. So, while these figures won’t match every bill, they’re a good benchmark tool to see how providers compare at a glance.

Note: These figures reflect indicative average usage rates from Victorian electricity providers in June 2026, based on quoted prices from each provider and rounded where appropriate. Internal iSelect calculations have been applied to this data. Actual costs may vary depending on plan and location. Data retrieved July 2026. When prompted, postcode used was 3000. Averages taken from single-rate tariff plans, including discounted and non-discounted rate periods. Data retrieved June 2026.

How is kWh used in my electricity bills?

A kWh is used on your bill as the standard measurement of your energy usage. The number of kWh you use is multiplied by your plan’s usage rate to figure out how much your home is charged for its energy usage. You’ll see kWh listed next to your usage charge on each bill you get. You’ll also see a supply charge listed alongside this, which is a daily fee for being connected to the grid. These three elements make up the core of your electricity bill.

The type of plan you’re on can slightly change the way you get charged per kWh. In the Australian energy market, you’ve got 2 options to choose from: market offers or standing offers.

• Market offers are the ones designed by energy retailers. They usually come with nice-looking discounts and other benefits to become more competitive.
• Standing offers are what you get if you want a more regulated plan. They’re determined by either of 2 regulators. The Default Market Offer (DMO) is a comparison price set by the Australian Energy Regulator that applies to New South Wales, South Australia and South East Queensland. The Victorian Default Offer (VDO) is set by the Essential Services Commission and applies to Victoria. These default offers act as a benchmark price for other providers to use when setting their own plan prices, and they’re locked in once a year.

Why do electricity prices vary from one state to another?

Energy bills vary from one state to another because local factors that make up energy costs for each distribution network differ. Network, wholesale electricity, environmental and retail costs are all charges that make up the final price of electricity. Things like where your power comes from, how it’s transported, your state’s market size, network area and renewable schemes all also impact the prices that your retailer charges you. Since different states feel these impacts differently, prices slightly differ across Australia.

Most of these charges and costs depend on the big players in the electricity market – your generator, distributor and retailer. When it comes to how these prices are set, it’s a bit of a waterfall effect. Here’s a look at how some of these prices are impacted in the energy market:

1. Wholesale prices: Generators turn products like coal and wind into power, then sell it to retailers at a wholesale price. These prices depend on the supply and demand of the energy at hand (also called the spot price). They’re set every 5 minutes by the AER and can fluctuate a lot throughout the day.
2. Network fees: Once your retailer has bought electricity, it gets shipped to your distributor. These guys are the ones who own and maintain all the power lines and get your electricity from A (generators) to B (your home). This is where network fees come from. They cover the costs to build, operate and maintain any infrastructure used to move all that power around.
3. Retail costs: Retailers then add their own costs and margins on top, taking into account their own internal operation costs. Depending on the competition and your state, these prices can change around.

What other costs play into my electricity bill?

Other than your usage costs, your bill can be affected by supply charges and tariff types, which affect how your provider bills you, how often you get billed and whether your home is powered by solar generation. The actual costs behind your retailers’ set prices are made up of a mix of wholesale, network and retail costs. Most of these factors are already set by your retailer, but how you use your power will determine how this affects your electricity bill.

Supply charges

One of the highest costs on your electricity bill, besides your usage, is your supply charge. How much your supply charge is can play a big role in your regular bills. Just like your usage charges, your supply charge can differ depending on your plan, discounts and distributor. That’s why it’s so important to compare a range of offers before deciding on the one for you. Even if you find a plan with a low usage charge, a high supply charge could wipe out any potential savings.

Tariff types

Tariffs affect the way you’re charged for your electricity usage, such as being charged a different amount at different times of the day (time-of-use) or running high-energy appliances on a separate meter (controlled load) for cheaper electricity rates.

• Flat rates mean you pay one simple price, all the time.
• Time-of-use tariffs have different rates depending on the time of day (peak, off-peak, shoulder/solar soak), which can mean lower costs at certain times.
• Demand tariffs are calculated based on your highest hourly electricity usage (based on the entire month). They add an extra cost to your bill depending on how high your peak demand usage was.
• Controlled-load tariffs only apply to appliances on a different meter, like your pool pump or water heater. With these tariffs, a third party controls when these appliances are on, usually at a cheaper time of day.

Payment details

How often you get your electricity billed (monthly, quarterly or annually) can change how your bill looks. Obviously, breaking it down into a monthly bill will look smaller than one big annual one, so just make sure you’re comparing like-for-like when seeing what everyone else is paying.

Solar generation

If you’ve got solar panels, your bill will include different costs and credits from most standard homes. With your panels generating power in the middle of the day and potentially storing it for later with a battery, you’ll have less reliance on the grid and smaller usage costs from your retailer.

When comparing, make sure that you’re only comparing against other solar energy plans, so you can get an accurate idea of how your electricity provider stacks up.

Helpful tip

If you want to get a better handle on your usage data or stop getting estimated bills, a smart meter could help. Instead of relying on manual readings, smart meters track your usage every 5 to 30 minutes, giving you more accurate billing and a better view of your consumption. Having a smart meter also means you’re open to different tariff options, like time-of-use pricing, which can suit some households that shift their energy use to off-peak times (which often come with cheaper rates).

Julia Paszka

General Manager – Utilities & Credit Cards

Frequently asked questions

Find an energy plan that fits your kWh use

Understanding what a kWh is can become the secret weapon to help you compare plans, spot sneaky charges and make smarter choices for your home (and budget). Once you get your head around it, you’ll know what you’re paying for with every flick of the switch. If now is the time to put your newly acquired knowledge to the test and compare plans, iSelect is here to help. By jumping online or calling your energy comparison experts at 1800 644 532, you can compare from a range of brands and plans to find one that fits the bill.