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Energy Affordability Index
New research compares household energy costs with median earnings and cost-of-living data to reveal where energy bills hurt most in Australia.
From the start of July, many Australians saw their energy bills increase, adding to the ongoing pressure on household budgets. To show where household energy bills are under the most strain in Australia, iSelect, the energy comparison service, has created the Energy Affordability Index. The index combines average household energy costs with median earnings in each state and territory and also factors in the Consumer Price Index (CPI) for each capital city to reflect broader cost-of-living pressures.
While energy bills make up a relatively small share of overall household spending, even a small increase can put pressure on households already managing higher essential bills. Our Australian Energy Affordability Index aims to identify where energy bills are the most affordable and where households may be feeling the most significant financial pressures. Across Australia, households spend an average of approximately 2.46% of their monthly income on energy bills, though the burden varies significantly between states and territories.
Australia’s Energy Affordability Index
| Rank | State/Territory | Monthly energy costs | Monthly earnings | Energy bill % of income | Capital city CPI Jul-26 | Energy Affordability Score |
| 1 | Victoria | $117.09 | $5,980.00 | 1.96% | 101.66 | 7.86 |
| 1 | Northern Territory | $124.59 | $6,543.33 | 1.90% | 102.17 | 7.86 |
| 2 | Western Australia | $147.14 | $6,500.00 | 2.26% | 102.16 | 6.43 |
| 2 | Australian Capital Territory | $164.00 | $6,933.33 | 2.37% | 101.96 | 6.43 |
| 3 | Queensland | $163.70 | $6,235.67 | 2.63% | 101.89 | 5.00 |
| 4 | Tasmania | $141.02 | $5,633.33 | 2.50% | 102.33 | 3.22 |
| 5 | New South Wales | $168.72 | $6,344.00 | 2.66% | 102.28 | 2.83 |
| 6 | South Australia | $192.08 | $5,633.33 | 3.41% | 102.45 | 0.00 |
Energy costs are based on a household with a single rate meter (no controlled load) usage of 4000kWh annually
The most affordable regions in Australia for energy bills
The Northern Territory and Victoria came in as the most affordable for household energy in Australia. Victoria recorded the lowest monthly energy bills, averaging $117, with 1.96% of earnings spent on energy bills. The Northern Territory recorded slightly higher energy bills at $124.59, but with a slightly lower share of earnings spent on energy bills at 1.90%. Melbourne recorded the lowest CPI in the country at 101.66 in July, while Darwin recorded a higher CPI of 102.17. Despite these small differences, Victoria and the NT came in as joint cheapest for energy affordability in our index.
Western Australia and the Australian Capital Territory were ranked next as some of the more affordable states for household energy, and while their scores were equal, the values differed. Western Australians spend roughly $147 per month on household energy, which was 2.26% of their median earnings. In contrast, households in the ACT face slightly higher energy costs with an average of $164 per month but benefited from the highest median earnings in the country at $6,933 per month, spending 2.37% of their income on energy bills. Perth and Canberra also recorded similar CPI results helping both regions achieve the same overall affordability score despite differences in energy costs and income.
The least affordable regions in Australia for energy bills
South Australia ranked as the least affordable state for household energy bills, with households spending 3.41% of their monthly income on energy bills, the highest in the country. It also recorded the highest energy bills in the country, with an average monthly bill of $192 per household. Combined with Adelaide recording the highest CPI of any capital city in the country, South Australians may be experiencing greater overall cost-of-living pressures than households elsewhere in Australia.
New South Wales was ranked as the second least affordable state for household energy bills, with 2.66% of monthly earnings spent on energy bills. The average energy bill came in at $168.72 per month, the second highest in the country, paired with Sydney’s higher CPI score. Those in New South Wales may feel financial strain from household bills.
Tasmania ranked third on our Energy Affordability Index, driven by lower income relative to energy costs, with 2.5% of earnings spent on energy bills. Tasmanians spend an average of $141 on energy bills monthly, one of the lowest. Still, combined with Hobart’s second-highest CPI in the country and lower earnings, it ranked third for energy bill affordability.
“Rising cost-of-living pressures continue to put strain on Australian households, with energy bills remaining a major contributor. Electricity prices have increased across many parts of the country, adding pressure to families already managing higher essential costs.
These findings highlight the importance of regularly comparing energy providers to ensure consumers aren’t paying more than they need to. At iSelect, we help Australians compare plans from a range of providers to find options that suit their budget and lifestyle.”
Julia Paszka
General Manager – Utilities at iSelect
Written by:
Sarah Grealy
Digital Public Relations Specialist
0413 363 690
Sarah is our Digital Public Relations Specialist, and brings more than a decade of experience in the insurance comparison industry to iSelect.
With a passion for storytelling through data-driven insights, Sarah strives to empower Aussies with practical guides and tips.
About the data
To determine where households may be feeling the greatest financial pressure from energy costs, iSelect created an Energy Affordability Index using four key measures:
1. Energy costs
The cost was calculated based on an annual usage of 4,000kWh per household on a single rate meter with no controlled load, and an average was used across different distributer costs. States and territories with lower than average household energy bills received a more energy affordable score.
2. Median monthly earnings
States and territories with higher median earnings received a lower score, as households with more available income may find it harder to absorb rising energy costs.
3. Energy bills as a percentage of income
We calculated the proportion of monthly income required to cover average monthly energy costs for each state and territory. Locations where households spent a lower share of their income on energy received a lower energy affordability score.
4. Capital city Consumer Price Index (CPI)
Capital city CPI figures were used as an indicator of broader cost-of-living pressures. States and territories with lower CPI scores received a lower score, reflecting household bills affordability.
Sources:
– Energy costs in Victoria: Victorian Default Offer price review 2026–27 | Essential Services Commission
– Energy costs in NSW, SA, QLD: AER – Final determination – Default market offer 2026–27 | Australian Energy Regulator (AER)
– Energy costs in WA: Household electricity pricing | WA Government
– Energy costs in ACT: act-standard-electricity-prices-july-2026.pdf
– Energy costs in TAS: Pricing and tariffs – Residential | Jacana Energy
– Energy cost in NT: Current Regulated Prices | Office of the Tasmanian Economic Regulator
– Australian earnings: Employee earnings, August 2025 | Australian Bureau of Statistics
– CPI: Consumer Price Index, Australia, June 2026 | Australian Bureau of Statistics
See our previous energy affordability study from March 2026: https://isu-cf-page-enterprise-wordpress.pages.dev/energy/insights/energy-affordability-index-march-2026-archive/
About 
At iSelect, we’re passionate about making Aussies’ lives easier by saving them time, effort and money. We are Australia’s go-to destination for comparison across insurance, utilities and personal finance products made available from our range of providers. Our service is provided at no cost to the customer.
iSelect does not compare all energy providers or plans in the market. The availability of plans may change from time to time, depending on who iSelect’s providers are and what plans they make available to iSelect. Not all plans made available from iSelect providers may be compared by iSelect either due to commercial arrangements, area or availability, so not all plans or providers compared by iSelect will be available to all customers. Some plans and special offers are available only from iSelect’s contact centre or website. Energy plans are available only for properties located in eligible areas of Victoria, New South Wales, South East Queensland, South Australia and ACT (where currently, iSelect only partners with ActewAGL). Click here to view iSelect’s range of providers.