Australian families face up to $500 more in annual electricity bills in 2026 as federal subsidies end, worsening financial strain amid rising interest rates.

Australian households face a projected 20%+ rise in electricity bills in 2026 as a $6.8 billion federal energy subsidy ends, adding up to $500 in annual costs for the average family. The increase follows the expiration of rebates like the $300 2024 aid, which delayed but did not prevent higher prices. Simultaneously, the Reserve Bank of Australia may raise interest rates by 0.25 percentage points in February, increasing mortgage payments by about $110 monthly. This dual pressure threatens lower-income families most, as energy and borrowing costs rise amid inflation above target and a surprise drop in unemployment. A proposed Solar Sharer scheme offering free electricity hours faces industry pushback and may not launch until mid-year, leaving households vulnerable to near-term financial strain.