Fears ‘free’ electricity could come with hidden costs
Energy retailers say they have been blindsided by reforms that promise free electricity to hundreds of thousands of Australians during peak solar hours.
The Solar Sharer program, announced by the federal government on Tuesday, will give consumers free access to electricity for three hours each day as part of the current default offer.
Households in NSW, south-east Queensland and South Australia will be eligible to access the program from July 2026, with negotiations underway to expand the program to other states in 2027.
But a group representing electricity retailers criticized the government’s lack of consultation on the change.
Solar Sharer program will be introduced Default Market QuoteWhich acts as a minimum standard for plans and prices offered by electricity retailers.
Free electricity will be provided in the middle of the day, when solar energy production peaks, providing network-wide benefits.
“People who can move their electricity use into an era of zero-cost energy will benefit directly, whether they have solar panels or not, whether they own them or not,” Energy Minister Chris Bowen said.
“The more people accept the offer and change their use, the more system benefits will increase, reducing costs for all electricity users.”
He said households would need to install a smart meter to access the offer, but could use it to power air conditioners, swimming pool cleaners, electric cars or home batteries.
The federal Department of Energy’s analysis showed that a single-person household that could shift 10 percent of its energy use to a three-hour period could save 9 percent on bills.
Retailers such as AGL, OVO and Red Energy offer free access to electricity during certain hours and an AGL spokesman said it would work with the government on the detailed design of the proposed reform policy.
But the announcement came as a surprise to many retailers, despite companies having been in talks with the government for five months about other market reforms.
“We are disappointed that the government did not consult us in advance when making this decision,” said Louisa Kinnear, president of the Australian Energy Council.
“This lack of consultation not only undermines industry confidence but also creates the potential for unintended consequences.”
Nationals Senator Matt Canavan, a key proponent of his party’s recent decision to abandon net-zero emissions targets, questioned whether consumers would be better off under the Solar Sharer plan or whether retailers would make people pay more at other times of the day.
The proposed changes will be overseen by the Australian Energy Regulator and chair Clare Savage said the body would launch public consultation on the reforms and ensure fair, consistent pricing from providers.
“By establishing the offer as part of the (Default Market Offering), more customers will have access to such offers but with the added confidence that they will not be overcharged outside of free power time,” he said.
Organizations including Solar Citizens, Rewiring Australia and the Clean Energy Council welcomed the changes, while council chief executive Jackie Trad said they would help energy users shift demand to cheaper periods and avoid high evening prices.
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