In the final three months of 2025, Australia’s main east coast power grid shifted into new territory as solar, wind and battery projects combined to meet more than half of total electricity demand for the first time over a full quarter. This occurred even as demand for power in the December period hit new highs and tested the system during heatwaves in multiple states. Years of rooftop solar uptake by households and businesses, backed by expanding wind farms and large batteries, have steadily reshaped how and when Australians draw power from the grid.
Behind this headline shift is a sharp change in the generation mix and in pricing. Wholesale electricity prices across the National Electricity Market averaged about $50 per megawatt hour in the December quarter, almost half the level of a year earlier and more than 40% below the previous quarter. New South Wales saw average prices fall to roughly $75 per megawatt hour, a drop of around 43% while Queensland recorded the steepest fall at about 55%. At the same time, coal-fired generation sank to its lowest quarterly share on record and gas-fired plants delivered their weakest December quarter output in around 25 years. Rooftop solar alone pushed past 4400 megawatts at peak and regularly drove daytime wholesale prices towards zero or below, easing the usual summer stress on the grid.
These shifts look set to flow through to households and businesses over coming months, although the impact is not straightforward. Lower wholesale prices feed into regulated retail tariffs from 1 July, but rising network costs and the expiry of government bill rebates at the end of 2025 may offset some of the savings on final power bills. Policy programs focused on home batteries and shared solar access aim to spread the benefits of cheaper daytime energy beyond those who can install panels themselves. At the same time, the success of rooftop solar appears to be squeezing the economics of large-scale solar farms because it depresses daytime prices, even as a record 64 gigawatts of new clean energy projects sit in the connection pipeline and about 1.8 gigawatts of new solar and battery capacity joined the grid in the quarter. The slower rollout of some projects and the need to keep the country’s largest coal plant running longer than planned suggest the transition towards an 82% renewables target by 2030 is gathering pace but still faces challenges for timing, investment and reliability.
