The Australian Energy Market Commission (AEMC) has released the final recommendations from a two-year review of electricity pricing, proposing a long-term shift away from complex energy tariffs and toward simpler plans managed by retailers and energy service providers.
The review examined how electricity pricing should evolve as more Australians generate, store and manage their own energy through rooftop solar, batteries and electric vehicles. According to the AEMC, one in four households already produces electricity through rooftop solar, with that figure expected to reach one in two households by 2040.
Rather than requiring consumers to navigate increasingly complex tariff structures, the Commission proposes transferring much of that complexity behind the scenes.
AEMC Chair Anna Collyer said the current system had become increasingly difficult for consumers to navigate.
“Electricity pricing has become too complex, too hard to compare, and too often unfair. You shouldn’t need to be an energy expert to get a fair deal, and long-standing customers should not pay more than someone who just walked in the door,” Ms Collyer said.
The review was launched in July 2024 and attracted thousands of submissions, public forums and stakeholder consultations before the final report was released on 18 June.
Simpler plans without the technical jargon
A central recommendation would allow households to select straightforward energy plans without needing to understand network tariffs, demand charges or time-of-use pricing structures.
The AEMC compared the concept to supermarket pricing, where consumers see a single price rather than separate costs for production, packaging and transport.
Under the proposed approach, retailers would manage the underlying pricing complexity while consumers would be presented with clearer products that are easier to compare across the market.
The Commission said the intent is not to create identical pricing for all customers, but to ensure the value consumers receive from the shared electricity network broadly reflects their contribution to it.
Implementation would occur gradually, with network pricing reforms beginning around 2030 and unfolding over roughly a decade.
Solar and battery owners in focus
The review also proposes changes aimed at recognising the role households and small businesses play in supporting the electricity system through consumer energy technologies.
According to the AEMC, reforms could create more targeted opportunities for battery owners to receive value for reducing congestion, easing peak demand and supporting grid performance.
“Millions of Australians have invested in solar, batteries and electric vehicles. They are already reshaping our energy system for the better. This review makes sure the pricing system catches up with what they have built, and rewards them properly for it,” Ms Collyer said.
The Commission said any future reforms would include protections designed to prevent sudden or unexpected bill increases during the transition.
Modelling released by the AEMC in April estimated that the proposed reforms could reduce network costs by up to $6 billion over fifteen years, equivalent to annual household savings of between $40 and $80 by 2040.
Loyalty penalties under scrutiny
Another recommendation targets the practice of long-term customers paying more than new customers for comparable energy products.
Under the proposal, retailers would be required to notify customers who have remained on the same plan for four years about how much more they paid compared with better available offers.
Retailers would also be required to make all market offers available to existing customers and report loyalty pricing data to the Australian Energy Regulator, which would publish the information.
The AEMC argues that greater transparency would allow consumers to identify retailers that consistently charge long-standing customers more than newer customers.
Better comparison tools proposed
The review found that existing comparison tools have not kept pace with the growing complexity of energy products.
As more consumers install solar panels, batteries and electric vehicles, energy decisions increasingly involve factors beyond simple price comparisons.
The Commission intends to work with relevant organisations to examine what a future comparison service should provide, what information consumers need and how such a service could remain independent and sustainable.
The review also recommends regular reviews of rules and regulations beginning in 2029 to ensure consumer protections remain effective as technology and market conditions continue to change.
Industry welcomes review but raises concerns
The Smart Energy Council broadly welcomed the review but argued further work is needed before any reforms are implemented.
Chief Executive David McElrea said the Commission had responded to concerns raised during consultation, but questioned whether sufficient guarantees had been included.
The organisation expressed concern that future tariff design could provide distribution network businesses with greater discretion that might disadvantage households with solar and batteries if appropriate safeguards are not established.
The Australian Energy Council, which represents energy retailers and generators, also supported efforts to improve transparency and simplify customer experiences but said implementation details would determine whether benefits are ultimately realised.
Chief Executive Officer Louisa Kinnear said network costs remain one of the largest components of household electricity bills and argued further reforms are needed to ensure the benefits of rooftop solar and batteries are shared more effectively with consumers.
While the AEMC’s recommendations set a direction rather than introducing immediate changes, the review places retailers, network businesses and energy service providers at the centre of a long transition that could reshape how electricity products are designed, sold and compared across Australia’s increasingly technology-driven energy market.
