Residential Energy
Cheapest Electricity Rates Melbourne
Need a new connection or looking for a better deal? Enter your postcode to compare providers in your area and get connected.
What Answers You’ll Get On This Page:
Important Points
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According to the Australian Energy Regulator’s September 2024 report, moving from a standing offer to the minimum market offer in VDO regions could save you up to $459 a year on electricity.
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The ACCC, Australia’s consumer watchdog, is encouraging households to take a closer look at their electricity plan. Despite electricity prices dropping in 2024, many Australians aren’t seeing the savings—simply because they haven’t switched.
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According to the ACCC’s December 2024 report, over 80% of households connected to the National Electricity Market (NEM) could be overpaying. You could be paying less just by shopping around. Remember, switching is easy and could take as little as 15 minutes.
To find the cheapest electricity deals in Melbourne, we’ve listed the best electricity plans on a single-rate tariff currently available for residential customers in the CitiPower Network area. These are sorted by estimated annual cost, so you can easily compare your options. Further down, we explain how to make sense of the numbers and what to look for when choosing a plan.
Compare the Cheapest Electricity Plans in Melbourne
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How Do I Find the Best Energy Deal?
Start with our comparison tool above, it’s designed to help you easily compare energy plans side-by-side so you can see which ones offer the best estimated value. To make sure you’re getting the best deal possible, there are a few more steps worth taking. Below, we’ve broken down what else you should consider to make sure the plan you choose is genuinely cost-effective for your home.
You’ll need to start by checking how your current plan compares to the Victorian Default Offer (VDO), a government-set benchmark price used to measure whether your current rate is competitive. Then, you’ll have to dive into the usage rate (how much you’re charged per kilowatt hour), the daily supply charge (a flat fee you pay just to be connected), and see how these stack up across different electricity retailers.
Expert Tip
To get a clearer view of your total annual cost, you can use a simple formula:
(Average Annual kWh Usage × Usage Rate) + (Daily Supply Charge × Number of Days in a Year) = Total Annual Bill
For example, if you use 4000 kWh of electricity each year, and your current plan charges $0.25 per kWh with a daily supply charge of $1.10, your annual cost would be calculated like this:
Plan A:
Usage Charge: 4000 kWh x $0.25 = $1,000.00
Supply Charge: $1.10/day x 365 days = $401.50
Total Annual Bill: $1,000.00 + $401.50 = $1,401.50
Now, compare this to another plan that charges $0.28 per kWh with a $0.90 daily supply charge:
Plan B:
Usage Charge: 4000 kWh x $0.28 = $1,120.00
Supply Charge: $0.90/day x 365 days = $328.50
Total Annual Bill: $1,120.00 + $328.50 = $1,448.50
Even though Plan B has a lower supply charge, it ends up costing more overall because the higher usage rate quickly adds up. This is why simply going after a lower rate or daily charge without doing the math can be a bit misleading.
Next comes the tricky part: figuring out which discounts provide the best value. Many electricity retailers offer generous sign-up deals or sign-up discounts that look appealing but quietly disappear after 12 months, leaving you on a much higher rate unless you switch again. Some electricity providers will throw in bill credits or reward points, and even solar feed in tariffs, but only if you meet specific conditions.
You also need to decide which tariff best fits your household. You might be on a flat rate tariff, a time-of-use tariff, or a demand tariff. Each structure has its own advantages, which we’ll discuss further below, and selecting the right one can have a substantial impact on your energy bill, depending on your household usage habits.
Then there are the hidden fees, credit card surcharges, connection/disconnection fees, exit fees, annual membership fees (e.g., Kogan Energy’s FIRST membership), late payment penalties. These might seem minor at first, but they can quickly cut into any savings you thought you were getting.
Even if you manage to compare all of this information across a dozen electricity providers, you’ll still need to carefully read through the contract to make sure you’re not missing anything. And unless you know exactly what to look for, it’s easy to get caught out.
The good news? You don’t have to do it all on your own.
At Electricity Monster, we make switching to new energy plans fast and easy. We’ll compare energy companies for you, sort the best-valued plans based on your usage habits, and get you connected to the best plan we have available. You won’t lose power, don’t have to worry about filling out paperwork, and we may even be able to help you get set up over the phone in just minutes. Best of all, our service is 100% free to use.
What Makes an Electricity Plan Considered ‘Cheap’?
When searching for the best deal on your electricity, the term “cheap” can mean different things depending on the factors involved. Here are some factors to consider when determining if a plan is truly focused on value:
1. Rate per kWh (Usage Rate)
The rate you pay per kilowatt-hour (kWh) of energy used could play a large role in your overall electricity bill. A low usage rate means you’ll pay less for every unit of electricity you use, making it an important factor in identifying “cheap” plans.
2. Discounts
Some electricity plans include guaranteed discounts that reduce either your usage charges or your overall bill. But here’s the catch, these discounts often have an expiry date. After the initial benefit period (usually 12 months), your plan might revert to a standard or even higher rate without as much as a warning.
That’s why we recommend that you should never “set and forget” your energy plan. The energy market is constantly changing, and what’s a good deal today might not be tomorrow.
3Electricity Tariffs And Their Impact On Cheap Plans
An energy tariff refers to the amount charged for providing electricity under your contract. Tariffs can vary based on where you live, which electricity distributors you are with, and the type of meter you have. Below are three different tariff types that you should be familiar with.
1. Single rate tariff
These tariffs have no peak or off-peak periods. Regardless of the time of day you use your energy, you will pay the same rate. Residential customers who are home in the evenings with most of their energy usage coming during peak demand times may benefit from this tariff.
2. Time of use tariff
A time of use tariff is often found in households with a smart meter installed that has the capabilities to be used with services like solar panels and a solar battery. This tariff means that the rate a consumer pays will depend on the time of day that the energy is used. You’ll often see times such as peak, shoulder, and off-peak.
Author
Benjamin TomBenjamin is a utility specialist passionate about creating informative content about the energy, internet, and solar markets. With extensive experience in the telecommunications industry, Benjamin drives our unique blog posts, articles, and reviews. He is focused on breaking down the technical jargon so our readers can better understand the telco market and industry. Whether he is comparing the latest internet deals or creating unique guides, Benjamin takes great pride in creating helpful, easy-to-read content.
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