How Australia made electricity cheaper while U.S. prices keep rising

Electricity prices keep rising in the U.S. Last year, home electric bills surged at more than twice the rate of inflation. By 2030, by one estimate, residential electricity prices in some areas could be as much as 40% higher than they were in 2025. At least one in three American households struggle to pay energy bills.

But the opposite is happening in Australia. Over the past 12 months, wholesale electricity prices dropped nearly in half. And millions of consumers can now sign up for three hours of free power in the middle of the day.

The country shows how a more distributed energy system—built around rooftop solar and home batteries—can make electricity much more affordable when it’s done right.

Batteries are changing the economics of the grid

Home batteries have helped drive the cheap prices. Last summer, the Australian government rolled out a new 30% discount on home batteries. The response to the incentive was immediate. In the first three weeks, more than 1,000 home batteries were installed each day. Since the program launched in July 2025, Australians have installed more than 500,000 home batteries.

During the day, the batteries help store solar power. In the evening, when demand surges, so many homes now rely on power from batteries that utilities can avoid turning on more expensive gas power plants.

“This is about avoiding the 6 p.m. peak when everyone gets home and turns on the TV, which is when the whole electricity network is stressed,” says Saul Griffith, cofounder of Rewiring Australia, a nonprofit that advocates for electrification. “And that’s a perfect job for batteries.”

Griffith, an engineer and serial entrepreneur in energy technology, previously cofounded Rewiring America in the U.S., a nonprofit that helped shape parts of the Inflation Reduction Act. During the pandemic, Griffith returned to his native Australia and began advocating for better policy there. As the government looked for ways to replace aging, unreliable coal power plants, Griffith’s modeling helped show that batteries were the best approach.