Do you benefit from it? This is how Labour’s three hours of free power will work

Do you benefit from it? This is how Labour’s three hours of free power will work

3 minutes, 23 seconds Read

Australian households will be able to take advantage of an abundance of rooftop solar to cut their energy bills, thanks to a new Labor energy proposal.
The changes, announced on Tuesday by Energy Minister Chris Bowen, will give consumers free access to electricity for three hours a day.

Solar panels have been installed on more than four million roofs across Australia. The plan aims to provide access to all-day solar energy and encourage Australians to change their habits by shifting some energy use from the busy evening period to the free block.

Analysis from the federal energy department found that a single-person household could save 9 percent on bills by shifting 10 percent of its energy use to the off period.

It comes a month after renewable energy surpassed coal as the leading source of power generation in Australia, amid an ongoing political debate over the country’s energy future.

How will it work?

The Solar Sharer program will be introduced into the standard market offering, which acts as a minimum standard for subscriptions and prices offered by electricity retailers.

Free electricity would be delivered in the middle of the day when solar generation peaks, Bowen said, and would benefit the entire grid.

Energy Minister Chris Bowen says the scheme will be open to all Australians, whether they own or rent. Source: MONKEY / Lucas Koch

“People who can shift electricity consumption to the energy-free period will benefit directly, whether they have solar panels or not and whether they own or rent,” he said.

“The more people take advantage of the supply and shift their use, the greater the system benefits will be, namely lower costs for all electricity users.”

Other proposed changes to the standard offering include limiting marketing and competition costs embedded in prices.

How do you access the Solar Sharer program?

To access the program, Australians must sign up with their energy suppliers and have a smart meter installed.
For homes with solar panels, smart meters are part of the existing installation costs.

It’s unclear how energy providers will handle charging the installation fee, about $100 to $200, for homes without solar.

Households in NSW, South East Queensland and South Australia will be able to access the scheme from June 2026.
It will follow consultations with the Australian Energy Regulator (AER), which start on Wednesday.

The administration is negotiating with other states and jurisdictions to extend the program through 2027.

‘Unintended consequences’ of the free energy proposal

Retailers including AGL, OVO and Red Energy are offering free access to electricity during certain hours, and an AGL spokesperson said it would work with the government “on the detailed design of the proposed reform policy”.
However, plans with free hours often charge higher delivery costs or energy consumption during other parts of the day.
The AER is expected to oversee the Solar Sharer program and ensure Australians get a good deal.
Louisa Kinnear, chief executive of the Australian Energy Council, the peak body for electricity retailers, said the energy sector was taken by surprise, with the lack of consultation risking damaging industry confidence and creating the potential for unintended consequences.

“When developing energy products, such as those that offer free energy for a specified period, retailers, and particularly smaller retailers, must carefully consider their market exposure, hedging strategy, the impact of network costs and a range of other factors,” she said in a statement.

“These factors are not identical for all retailers, and universal access to a product poses material risks to retailers that in some cases can only be mitigated if they exit the market.”
AER chairman Clare Savage said the changes could help address peak demand on Australia’s energy network.
“Shipping more demand to the middle of the day would reduce the cost of the electricity system for all consumers because we wouldn’t have to build as much electricity generation or poles and wires to meet the evening peak,” she said.
According to research firm Rystag Energy, renewable energy contributed 48.8 percent of Australia’s energy in September, while coal accounted for 47.6 percent.
– With additional reporting by the Australian Associated Press.

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