From July 1, many Australians will have the option to choose something that once seemed absurd: free electricity in the middle of the day. The federal government's opt-in Solar Sharer Offer will provide three hours of free power to households with smart meters in New South Wales, South Australia, and southeast Queensland. Victoria's separate scheme will launch in October.
Free power might sound like a giveaway, but it isn't. The initiative is designed to encourage people to use more electricity during the hours when solar power flows into the grid. The real aim is to shift the use of water heaters, pool pumps, air-conditioning, and electric vehicle charging to the middle of the day. At other times, power prices will be slightly higher.
The main challenge for Australia's power systems is no longer how to meet peak demand in the evening. We now have to manage the floods of very cheap solar during the sunniest hours, when supply exceeds demand. If this imbalance isn't addressed, electricity voltage and frequency can move outside safe limits, equipment can trip, and the risk of outages rises.
Understanding the Solar Sharer Offer
The scheme makes sense from a grid management perspective, but questions about its fairness remain. Electrified households will benefit most, while renters and other groups may benefit less. About one in three Australian homes now has solar panels. At times, solar can supply 50% of total demand on the National Energy Market, Australia's largest power grid. Wholesale prices have regularly gone negative in recent quarters. In big solar states like South Australia, solar can generate more power than the state can use. Surplus power is exported, stored in batteries, or curtailed—wasted.
The Solar Sharer Offer aims to make better use of these solar power floods. This financial year, the three hours of free power will be from 11 am to 2 pm daily in NSW and southeast Queensland, and from 12 pm to 3 pm in South Australia. Australia's energy regulator chose these times to match when solar output is highest and network and wholesale costs are lowest. These times may change year by year. The scheme is not national because it is tied to the Default Market Offer—a regulated safety net plan for electricity customers—which only applies in NSW, SA, and southeast Queensland.
Who Benefits Most?
Ensuring fair access has been a constant challenge for household clean-energy schemes. People who own their homes and have access to capital are usually better placed to benefit. This scheme has the same issue. The ideal customer for three hours of free power is a homeowner with a smart meter, flexible hot water, an electric vehicle, a home battery, and the ability to schedule power-hungry appliances. That works well for them, but what about everyone else?
To be eligible, households must have a smart meter. Only about 60% of households have one. The harder question is whether this offer is fair for other households. Renters, apartment residents, and people on embedded networks in retirement villages, caravan parks, or shopping centres face additional barriers. If they opt in without being able to use the free power effectively, they could end up worse off due to higher prices at other times. These concerns were raised during the consultation process.
Efforts to Make It Fairer
The government is aware of these issues. The free power period is capped at 24 kilowatt hours per day, enough to cover several large daytime loads such as hot water, dishwashing, laundry, air-conditioning, or partial EV charging. This cap matters because offering electricity for free still incurs costs for energy retailers. To recover the missed revenue during the free window, retailers will boost other usage charges. Capping free power at 24 kWh per day limits how much high-consumption households can use at zero price, which in turn limits how much revenue must be recovered from usage at other times of day.
More needs to be done to ensure fairness. A key step is helping households heat water during the day. Heating water consumes a lot of power. Electric hot-water systems are often on controlled-load tariffs designed for overnight operation. A South Australian trial shifted nearly 50% of water heating from night to day with little reported inconvenience. Where safe and practical, retailers and network businesses could adjust the charging times of these systems to the middle of the day. Governments could assist renters and apartment residents by supporting timers, smart controllers, and efficient heat-pump hot-water systems. The same logic applies to other flexible loads.
The free lunch is real, but the question is who gets a seat at the table.
