Home owners and renters can tap into three hours of free electricity each day starting on Wednesday under the Solar Sharer scheme, which could cut bills by hundreds of dollars and soak up the renewable energy flooding into the grid.
The federal government estimates that a three-person household that shifts a couple of power-hungry appliances such as a dishwasher and washing machine to operate during the middle of the day could save up to $350 a year, with 10 per cent of its electricity use in the midday free period.
A three-person household that shifts 30 per cent of its electricity use, such as a dishwasher, washing machine, pool pump and electric vehicle charging, could save more than $1000 a year.
The Albanese government’s new regulations force electricity retailers to offer plans that include a free three-hour period from 11am to 2pm in NSW and Victoria. It is available to all houses and apartments, with and without solar panels, as long as they have a smart meter and they opt in to the new plans.
However, retailers are not required to roll existing contracts onto the scheme, or to alert customers.
Electricity retailers have argued Solar Sharer could drive up prices at other times of the day and create a “cross-subsidy” where those who are unable to shift their usage times pay higher charges.
They also say the scheme disproportionately benefits those who can capitalise on the “free” power window to fill up their home batteries and electric cars.
Solar Sharer kicks off in NSW, Victoria and South Australia on July 1, where electricity pricing is administered by the Australian Energy Regulator. Victorian electricity pricing is regulated by the state and mirrors the federal scheme with the Midday Power Save, which kicks off on October 1.
It is hoped that Solar Sharer will encourage millions of households to increase their daytime power consumption, which would reduce the midday glut and also alleviate the evening peak.
Australia is a world leader in uptake of rooftop solar panels, with around 4.5 million installed around the country. It is also in the middle of an energy transition to replace ageing coal plants with solar and wind farms, backed by large batteries.
Renewables now supply almost 50 per cent of the electricity used in the grid. Investment in solar farms has been so rapid that electricity now floods the grid in the middle of each day, sending wholesale costs – what retailers pay to generators for supply – plunging toward zero around noon.
But there’s a problem: not enough households use electricity in the middle of the day.
Authorities have been forced to curtail supply into the grid to prevent dangerous spikes in voltage that could cause blackouts.
The evening peak hits after 5pm, as solar power ebbs and the grid is under most strain as households switch on their appliances and electricity prices spike, as the grid is forced to call on more expensive power sources like gas and coal plants.
Energy Minister Chris Bowen announced the scheme in November last year. He encouraged electricity customers to contact their retailer and check if switching to a Solar Sharer plan could save them money.
The scheme requires electricity retailers with more than 1000 customers to offer a plan with three hours of free power. This plan must comply with the Default Market Offer price cap imposed by the Australian Energy Regulator, but it may not be as cheap as other plans – depending on a customer’s usage.
“Solar sharer is a great option if you are in a position to shift some of your electricity use to the middle of the day, like your dishwasher or washing machine,” Bowen said.
An average Australian household with three residents uses roughly 15 kilowatt-hours of electricity in a day. The Solar Sharer scheme is capped at 24 kilowatt-hours of free electricity in a three-hour period each day.
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Mike Foley is the climate and energy correspondent for The Age and The Sydney Morning Herald.Connect via email.
