Why Perth electricity prices keep rising (and what it means for solar)

Perth households have seen significant electricity price increases since 2022. Understanding why prices are rising — and why that trend is likely to continue — helps frame why the financial case for solar in Perth continues to strengthen.

Perth electricity price history

| Financial year | Synergy A1 rate (c/kWh) | Supply charge (c/day) | Annual increase | |---|---|---|---| | 2021–22 | 26.06c | 103.28c | Baseline | | 2022–23 | 27.27c | 107.67c | +4.6% | | 2023–24 | 29.08c | 112.69c | +6.6% | | 2024–25 | 31.41c | 115.86c | +8.0% | | 2025–26 | 31.41c | 117.55c | 0% (rate freeze) | | 2026–27 | 33.26c | 119.24c | +5.9% |

Total change 2022–2027: A1 consumption rate up approximately 27.6% in five years. Annual average increase: approximately 5.5%/year.

The 2025–26 rate freeze (maintained at 31.41c) was a one-year exception. The resumption to 33.26c in 2026–27 reflects deferred cost recovery.

What drives electricity price increases in WA

Network costs dominate the bill

Synergy's charges flow through from Western Power's network access fees. Approximately 40–50% of your electricity bill is network cost — the poles, wires, substations, and network maintenance across the SWIS.

Why network costs are rising:

• Ageing infrastructure replacement: Much of Perth's network was built in the 1960s–1980s and requires replacement or major upgrade. Transformers, substations, and underground cables all have 30–50 year design lives.
• Two-way power flow upgrades: The surge in rooftop solar has required significant network upgrades to handle power flowing from suburbs back to the grid — voltage management, protection upgrades, and export limiting systems.
• Undergrounding: WA has a program to underground suburban aerial cables to reduce bushfire and storm damage risk. Undergrounding costs approximately $1–$2 million per kilometre.

Generation costs

Synergy operates a mix of gas, coal, and increasing renewable generation. Gas price volatility (linked to international LNG prices after the Russia-Ukraine energy disruption) has fed into WA electricity costs, though WA's domestic gas reservation policy (15% of LNG production reserved for domestic use) moderates this somewhat compared to east-coast states.

Supply charge increases

The supply charge (daily connection fee paid regardless of consumption) has risen from 103.28c/day in 2021–22 to 119.24c/day in 2026–27 — a 15.4% increase. This partly reflects the network cost of maintaining connection to properties that have significantly reduced their grid consumption via solar (the network still needs to service them for evening/cloudy-day import).

How rising prices improve solar economics

The financial case for solar is directly linked to the grid import rate you avoid. At 26c/kWh (2022 rate), a 6.6kW Perth system saving 8,000 kWh/year was worth approximately $2,080/year. At 33.26c/kWh (2026–27), the same system saves approximately $2,661/year — a 28% improvement in annual savings without any change to the solar system.

Payback period compression from rising prices:

| Year of installation | Grid rate at install | Annual savings | Payback (on $6,000 system) | |---|---|---|---| | 2022 | 26.06c/kWh | ~$2,085 | 2.9 years | | 2024 | 29.08c/kWh | ~$2,326 | 2.6 years | | 2026 | 33.26c/kWh | ~$2,661 | 2.3 years |

Households that installed solar in 2022 at a higher STC rebate are now benefiting from higher grid rates — their actual payback period has been compressed by price increases they didn't anticipate at installation.

Forward price expectations

WA's independent economic regulator (the Economic Regulation Authority) oversees network pricing. Published network determinations project ongoing cost increases driven by the factors above.

Likely trajectory: Annual increases of 4–8% through the late 2020s are widely anticipated in energy industry analysis, barring major regulatory intervention. The 2025–26 freeze (an election-year policy decision) is not expected to repeat.

What this means for solar buyers: A system purchased in 2026 with a 33.26c rate baseline will earn a higher return than the upfront calculation suggested if prices continue rising. Solar panels generate the same kilowatt-hours regardless of what the avoided grid price becomes — their value increases automatically as electricity prices rise.

The battery case strengthens with higher prices

Higher grid rates improve battery economics more than solar economics, because the battery's value is proportional to the grid import rate avoided:

• At 26c/kWh: 10kWh daily battery cycling saves approximately $949/year
• At 33.26c/kWh: same system saves approximately $1,216/year

A 28% grid rate increase results in a 28% improvement in battery annual savings, proportionally shortening the payback period.

Synergy A1 tariff rates from Synergy price schedules and ERA regulatory determinations. Future price projections are based on published network determinations and are not guaranteed. Verify current rates at synergy.net.au.