Australia has some of the largest areas of high volume, consistent solar and wind energy anywhere in the world. It is a natural advantage that many countries in our region and across Europe will envy as they ramp up their efforts to reduce carbon pollution.

Australia has an amazing opportunity to utilise this abundance of reliable energy not only to transform our own energy systems but also that of our neighbours – if we get the policy settings right.

We are, in fact, already seeing the benefits of renewable energy flowing into our electricity grids. With all the inflation pressures on our bank accounts it looks like electricity pricing may be one cost that could be turning a corner – largely thanks to cheap solar and wind energy.

Renewables are Bringing Down the Cost of Producing Electricity

Here at Greenpeace, while we think there are some important questions to ask about renewable energy, it is clear that solar and wind are certainly the cheapest energy options available.

In contrast, coal, oil and gas are not only big on pollution, they are also proving costlier as they struggle to cope with the changing nature of our electricity systems. Plus, fossil fuels are much more exposed to international price fluctuations – as we all experienced when our electricity bills rapidly rose following the Russian invasion of Ukraine.

Wouldn’t it be great if we instead had energy independence, sourced from an infinite supply of clean energy?

Solar and wind (backed by batteries) can do just that and the reality is that they are already out-competing the old guard of gas and coal simply because they are quicker and cheaper to deploy. Which is good news for electricity prices!

Although whether energy retailers are passing on those savings to customers is another question. Short answer: no, they’re not – but it is a bit complex.

Why are my electricity bills still high?

There are a number of elements that make up the final amount we see on our bills. The graph below shows the breakdown of energy costs covered by our bills.

You will see roughly a third (36.2% in 2025-26) of the cost goes to maintenance and build out of the electricity grid. This includes the transmission lines needed to connect to new renewable energy sites and to connect states so they can better share their energy resources. The ‘network’ costs have been increasing but so have other components of our bill, most notably the ‘wholesale’ cost of producing electricity.

Thankfully, the cost of producing the electricity is now starting to go down (thanks to renewables and batteries), but they are coming off record highs thanks to the exorbitant cost of gas and the unreliability of coal power stations that are old and no longer fit for purpose.

During high demand times (eg, when we all get home from work on a hot day and turn on the air conditioning) spot prices can quickly jump. Add to that a couple of coal power plants breaking down (as they increasingly do), and expensive gas fired power use spikes in the system. This can quickly cancel out any of the cost savings solar power may have created during the day when prices can actually go negative.

The good news is that this is exactly the problem batteries can solve. Batteries are great at soaking up the surplus supply of solar during the middle of the day, which creates a more efficient system, and then rapidly pumping out that power during the evening peak at a cheaper rate than gas.

How much have costs come down?

According to the Australian energy regulator (AEMO), wholesale electricity prices across the east coast have dropped by 44% when comparing prices in quarter 4 of 2025 to the same period in 2024.

AEMO directly attributes the change to the significant growth in wind (up 29%), solar (up 15%), and batteries (3,796 MW of new battery capacity added). This influx of cheap renewable energy has seen a corresponding decrease in the use of polluting fossil fuels to power the grid. Coal fired power dropped by 4.6% and gas fired power fell by a staggering 27%.

The same trend can be seen in the world’s largest standalone grid in WA where renewable energy and storage supplied a record 52.4% of the grid’s energy across the final 3 months of 2025. That is an impressive result given there is no interstate connection to borrow energy from and there is no hydroelectric power in the system.

As a result, WA has seen a 13% drop in wholesale electricity prices thanks to a 5.8% reduction in coal fired power and a 16.4% reduction in gas fired power.

Australian Households Lead the Way on Solar and Batteries

Despite all the attempts to discredit clean energy by Trump and other conservative politicians, Aussie households have long known the value of renewable energy. In fact, Australia now holds the title for the highest rate of solar energy per capita in the world.

This is now being followed by the rapid takeup of household batteries with the Clean Energy Regulator being overwhelmed with interest in the Cheaper Home Batteries Program. They now expect to receive “around 175,000 valid battery applications corresponding to a total usable capacity of 3.9 GWh by the end of 2025.”’

All these extra batteries storing the surplus solar energy across our neighbourhoods during the day is not only creating drastic bill reductions for those households who are installing them, it is helping the whole grid. Which eventually will help everyone’s electricity bills.

If Australia as a whole follows the lead of suburban families by switching to cheap solar (plus wind) backed-up by batteries, it has an unparalleled opportunity to build its economy on the back of unlimited, local, clean energy harnessed from the sun and wind.

Powering our Future Economy

If there was ever something Australia has a natural advantage in, its sun and wind. But given the growing demand for electricity from data centres and the electrification of heavy industry, we are going to need more than just rooftop solar panels.

That’s where Australia has the potential, more than almost any other country, to become a renewable energy powerhouse and punch above our weight in the fight against climate change. See for example the unique opportunity to enter into the production and export of green iron.

While there is still quite a way to go before our electricity is fully sourced from solar and wind, we are well on the way. The clean energy charge is gathering pace – and our communities, oceans, wildlife and bank balances will be the better for it.

Australia’s renewable energy opportunity