Wondering why your energy rates change each year? Join us at our pricing webinar on July 24 2025, and find out why.
There’s a lot that goes on behind the scenes when it comes to electricity. As energy providers, we manage a few unavoidable costs to keep your lights on every day.
Each year, the cost of key ingredients that make up your tariff – like wholesale electricity, poles and wires (network), government schemes, and more – change based on economic and market conditions.
That’s why energy regulators review and update the costs that make up the Default Market Offer (DMO) and Victorian Default Offer (VDO) annually to reflect these movements. The DMO and VDO act as a safety net for those who don’t regularly review the market and are designed to act as a benchmark, making it easier for you to check whether you’re getting a fair price for your electricity.
Every year, we update our prices to reflect these changes, which impact our cost to supply our customers. Even though we update our prices each year, we always apply the same principles.
Our pricing principles
Energy sharing: As a social enterprise, our goal is to create a society powered by 100% renewable energy. We seek to connect our customers with energy shared from local sources, whether community batteries or solar and battery customers.
We look for a balance between an attractive feed-in tariff for energy producers and affordable consumption rates for energy users. If we pay a higher feed-in tariff, it will benefit individual producers, but it requires increased electricity consumption prices to recover costs. Each year, we aim to find new innovations and a fair balance that encourages energy sharing between our energy producers and consumers.
Fair and honest pricing: We don’t have legacy tariffs, hidden fees, or pricing tricks, and importantly, we do not impose a loyalty tax. A loyalty tax occurs when existing customers pay higher prices than new customers simply because they haven’t switched providers or asked for better rates. You won’t experience this with us because we always offer the fairest and most transparent prices we can, ensuring all customers, whether they’ve been with us for five years or one month, benefit from competitive and consistent pricing.
What’s changing in the 2025-2026 financial year?
Energy rates: This year, our hedging prices have increased, which is the primary driver of the modest increases in our electricity costs.
Concessions: Customers will benefit from a further $150 in rebates across the 2025-25 financial year as a part of the extension of the Federal Government’s Energy Bill Relief Fund, aimed at easing cost-of-living pressures.
Daytime rebate: In response to the increasing amount of solar energy pushing spot prices very low or even negative during high solar production periods, we’ve recently introduced a daytime rebate within our Energy Shapers plan. This rebate incentivises customers to shift electricity use to the high-solar production period from 10 am to 3 pm, enabling better energy sharing within our community energy hubs. For most tariffs in the Energy Shapers plan, our daytime rebate will be at a similar level.
Time-of-use feed-in tariff: As we update pricing for the 2025-26 financial year, we’ve implemented a time-of-use feed-in tariff to further address the challenges posed by excess solar exports. This tariff offers a variable rate for solar energy exported back to the grid, incentivising customers to strategically manage their solar exports to times when the energy is most valuable to the community. The time of use periods will differ according to geography, however, in all instances solar customers will be rewarded for exporting across the late afternoon/early evening.
Why are rates changing?
Here’s how the main components involved in energy prices have changed:
Wholesale energy: This is the electricity we buy from generators to power your property. It’s one of the largest contributors to your energy tariff (31%-44% of your bill). In the 2024-24 financial year, after years of increases, the cost of wholesale energy eased up a little, bringing some much-needed price relief. Unfortunately, the 2025-26 financial year saw the upward trend in wholesale electricity prices continue, which is the primary driver of the current pricing increase. The ongoing price increases are precisely why we’re so passionate about boosting local energy production. The 2025-26 financial year will see us rapidly expand our fleet of community batteries, with the goal of supporting our electricity retail customers.
Distribution and network: We pay local network service providers to keep power flowing through the poles and wires to your home. This is the second large component of your electricity bill (33%-48% of your bill). These costs vary depending on where you live and how many network upgrades are needed. In Victoria, network tariffs are increasing by about 4% on average across Victoria’s five distribution zones. In New South Wales, network tariffs are increasing by about 9% across the three distribution zones. Network costs are generally increasing as network companies pass through increasing costs.
Environmental: As energy providers, we must comply with various government environmental schemes aimed at boosting renewable energy. This year, these costs have decreased, mainly due to reductions in the cost of large-scale generation certificates.
Retail and other costs: These make up a smaller component of energy costs and have remained mostly stable.
How all these changes impact your bill, ultimately depends on factors like your total usage, network region, whether you have solar panels, and in many cases the times of day that you use most power.
National Government Energy Rebate: Australian households are set to benefit from an extension of the Federal Government’s Energy Bill Relief Fund. This extension will be distributed in two quarterly instalments starting from 1 July 2025, and we’ll automatically apply these to your bills. We’re glad to see Australians receiving a bit of financial relief.
Join us at our pricing webinar
We know pricing changes can cause discomfort, so if you have any questions or feedback, please don’t hesitate to reach out. We’ll also be running a pricing webinar on July 24 2025, at 11am to help our customers understand our pricing and pricing trends. If you’d like to attend the webinar, RSVP here.
If you want the full details on changing electricity retail costs, see the AER and ESC websites for a detailed overview of how they’ve constructed their default offers:
Australian Energy Regulator (AER) – NSW, QLD, SA, ACT, TAS
Essential Services Commission (ESC) –Victoria.
We thank you for contributing to the movement to power our communities with 100% renewable energy. As an Indigo Power customer, you’re helping to make our work possible.
Ben is Indigo Power’s Managing Director. He has a passion for collaborative initiatives that positively impact our communities. Ben leads our skilled and committed projects team, driving the uptake of community-scale clean energy technologies in communities around Australia.