It was meant to be a win for households and the environment — three hours of free power every day to make the most of Australia’s booming solar energy. But energy companies are warning the plan could end up doing more harm than good, particularly for lower-income families.
Three Hours of Free Power — But at What Cost?
The federal government’s new Solar Sharer scheme, due to start on July 1, will force retailers to offer customers three hours of free electricity during the middle of the day when solar supply is at its peak. The goal is to encourage people to shift their usage to daylight hours, easing pressure on the grid and helping stabilise prices.
But according to major retailers AGL and EnergyAustralia, the timeline is too ambitious and the policy risks backfiring. In recent discussions with government officials, both companies urged a delay of at least a year, arguing that the scheme in its current form could unfairly benefit households with home batteries or electric vehicles while leaving renters and low-income earners worse off.
How the Plan Could Create “Winners and Losers”
Industry leaders say the idea sounds good in theory — using surplus solar generation to provide free power when the grid is oversupplied — but the economics are complex. Without reform to network tariffs and environmental costs, retailers may be forced to recover lost revenue by charging more for electricity in the afternoon and evening, explains The Age.
That means customers who can’t shift their usage, such as people who work during the day, could end up paying higher bills overall. Analysts have described it as a potential “cross-subsidy” — where one group of consumers effectively covers the benefits of another. Energy companies also point out that implementing the scheme will be costly and technically challenging, requiring new billing systems, customer notifications, and pricing models.
Government Defends the Move
Energy Minister Chris Bowen has defended the policy, describing it as a logical step for a country with the highest solar adoption rate per capita in the world. The government insists it is working with the industry to get the design right and ensure that all customers can benefit from cheaper daytime energy.
Officials argue that if implemented carefully, Solar Sharer could help flatten demand curves, reduce overall system costs, and make renewable energy more accessible. But energy retailers say there’s a real risk of unintended consequences if the launch is rushed.
Calls for a Delay
The Australian Energy Council, representing the nation’s biggest generators and retailers, has called the current model “not cost-reflective” and warned it could lead to “negative outcomes” for consumers it’s meant to help. AGL has similarly argued that “free power windows” should not be locked into the regulatory structure without more testing.
Without adjustments to tariffs and infrastructure costs, experts say the reform could end up driving higher bills — exactly the opposite of what was promised. For now, the government remains determined to press ahead with the July rollout, but the energy sector is hoping for more time to ensure the lights stay on — and the power stays fair.
