Australia’s energy market is shifting fast. With wholesale prices bouncing between highs and lows, and renewable options expanding every year, it’s natural for businesses to ask: What is the cheapest energy source right now?
The answer? It depends — not just on the source, but on how you access it, when you use it, and who you buy it from. That’s why a growing number of Australian businesses are working with an energy broker to make sense of the market and secure cost-effective supply contracts that suit their needs.
Let’s explore which energy sources are currently offering the lowest cost, and why working with a broker could make a bigger difference than the source itself.
The Cheapest Energy Sources in Australia Today
According to recent data from CSIRO’s GenCost report, renewables continue to offer the lowest levelised cost of energy (LCOE) in Australia — especially large-scale solar and wind generation. Here’s a simplified snapshot:
| Energy Source | Estimated Cost (per MWh) |
|---|---|
| Large-scale solar | $50–$70 |
| Onshore wind | $60–$80 |
| Coal (black/brown) | $80–$120 |
| Gas (peaking) | $120–$180 |
So, on paper, solar and wind are the cheapest sources. But here’s the catch: just because they’re cheap to produce doesn’t mean every business can access those savings directly.
That’s where a savvy energy broker becomes critical — helping businesses navigate the gap between generation costs and what retailers charge on commercial plans.
The Role of Energy Brokers in Accessing Cheaper Supply
A professional energy broker doesn’t just shop around for prices — they dig into usage data, contract structures, and market conditions to deliver a plan that actually lowers your energy cost.
Here’s how they help:
- Analyse your consumption profile: Do you use power during the day (ideal for solar-linked pricing), or at night when demand is lower?
- Compare time-of-use vs flat-rate contracts: Brokers explain which tariff works best for your pattern — not just the cheapest source overall.
- Negotiate access to wholesale-linked plans: Some brokers can get you connected to products that follow wholesale market rates, including those shaped by cheaper renewable generation.
- Manage contract timing: Prices fluctuate. Brokers can recommend when to lock in or switch based on wholesale price forecasts.
This hands-on strategy can result in bigger savings than simply choosing a provider based on advertised discounts.
For a deeper dive into how brokers compare options across retailers, check this breakdown of energy broker performance.
Renewable Energy Is Cheap — But There Are Caveats
While renewables are the cheapest source today, not every plan or provider passes those savings along. Some things to consider:
- Solar feed-in rates vary: If you generate excess energy, the rate you’re paid for exporting back to the grid depends on your retailer — and can change year to year.
- Green energy plans may cost more: Despite low generation costs, green-labelled plans often include a premium to offset emissions or fund renewable projects.
- Storage isn’t always included: Battery-backed contracts are still relatively expensive, which means businesses using solar at night may not see the savings they expect.
- Wholesale-exposed pricing fluctuates: While wholesale rates often drop due to renewable input, they can still spike unexpectedly — unless you’re properly hedged.
This is why working with an energy broker matters — they can explain the pros and cons of each plan, and help you avoid common traps.
Case Study: Retailer Saves Big with Daytime Tariff Shift
A multi-site clothing retailer operating across NSW and VIC had traditionally been on a flat-rate contract. After reviewing smart meter data, their broker identified that over 80% of usage occurred between 9am and 5pm.
The solution? Switch to a time-of-use plan linked to daytime solar generation, where rates were 25–30% lower during sunlight hours.
Result: A 14% reduction in total annual electricity spend — without reducing usage or installing any solar infrastructure.
Without a broker, the business would’ve renewed on their existing contract — and missed out on thousands in savings.
What About Gas?
Gas-fired generation remains one of the most expensive sources in Australia. It’s typically used for “peaking” — supplying short bursts of high demand, especially in summer.
However, gas prices are tied to global export markets, and many business contracts are still indexed to legacy pricing models.
For businesses with combined gas/electricity needs (e.g. commercial kitchens, laundries, manufacturers), brokers can bundle deals and help renegotiate gas pricing in conjunction with electricity — often securing better rates through volume discounts.
Energy Source vs Energy Strategy
The cheapest source is important — but how you buy that energy is what matters most.
Let’s say solar is the cheapest source on the grid. But if your usage is highest during evening hours, and you’re on a flat-rate plan that doesn’t reward off-peak or storage usage, those savings don’t reach you.
A broker doesn’t just chase cheap — they chase smart.
- Does your supplier price in daytime dips caused by solar?
- Are you using power at a time when wind lowers wholesale rates?
- Is there a wholesale-exposed contract that fits your business’s risk profile?
These are questions brokers answer every day — and they’re often the difference between a good deal and a forgettable one.
Final Word: Know the Source, But Master the Strategy
So, what is the cheapest energy source right now? Statistically, it’s large-scale solar — followed closely by onshore wind. But unless your business taps into a contract that reflects these cost advantages, you may still be overpaying.
That’s why choosing the right contract — not just the cheapest source — is the smart move. And working with a sharp energy broker is the fastest way to get there.
Because in 2025, saving on energy isn’t about guessing the market — it’s about knowing where you fit in it.