Australian households will be able to tap into an abundance of rooftop solar to lower their power bills under a new Labor energy proposal.
The changes, announced by Energy Minister Chris Bowen on Tuesday, will give consumers free access to electricity for three hours each day.
Solar panels are installed on over four million rooftops across Australia. The scheme aims to access solar power generated throughout the day and incentivise Australians to change their habits, shifting some energy use from the busy evening period to the free block.
Analysis from the federal energy department showed that a single-person household could save 9 per cent on bills by shifting 10 per cent of its energy use to the free period.
It comes a month after renewable energy surpassed coal as the major source of power generation in Australia, amid ongoing political debate over the nation's energy future.
How will it work?
The Solar Sharer program will be introduced to the default market offer, which acts as a minimum standard for plans and prices offered by electricity retailers.
Free electricity will be provided during the middle of the day when solar power generation peaks, Bowen said, and would deliver benefits across the network.
Energy Minister Chris Bowen says the scheme will be accessible to all Australians, whether they own or rent. Source: AAP / Lukas Coch
"The more people take up the offer and move their use, the greater the system benefits that lower costs for all electricity users will be."
Other changes proposed for the default offer include restricting marketing and competition costs embedded in prices.
How do you access the Solar Sharer scheme?
To access the program, Australians will need to sign up through their energy providers and have a smart meter installed.
For properties with solar panels, smart meters are part of the existing installation costs.
It is unclear how energy providers will navigate charging the installation cost, roughly $100 to $200, for homes without solar.
Households in NSW, south-east Queensland and South Australia will have access to the scheme from June 2026.
It will follow consultation with the Australian Energy Regulator (AER), to start on Wednesday.
The government is negotiating with other states and jurisdictions to extend the program by 2027.
'Unintended consequences' of the free energy proposal
Retailers including AGL, OVO and Red Energy offer free access to electricity during specified hours, and an AGL spokesperson said it would work with the government "on the detailed design of the proposed reform policy".
However, often plans that include free hours charge higher supply charges or energy use rates at other parts of the day.
The AER is expected to oversee the Solar Sharer scheme and ensure Australians get a good deal.
Louisa Kinnear, CEO of the Australian Energy Council, the peak body for electricity retailers, says the energy sector was caught by "surprise", with the lack of consultation risking "damaging industry confidence, as well as creating the potential for unintended consequences".
"In developing energy products such as those that offer free energy for a period of time, retailers, and in particular, smaller retailers, need to carefully consider their exposure to the market, their 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 places material risks on retailers that in some instances might only be mitigated by them exiting a market."
AER chair Clare Savage said the changes could help to address peak demand on Australia's energy network.
"Shifting more demand to the middle of the day would lower the cost of the electricity system for all consumers as we don't need to build as much generation or poles and wires to meet the evening peak," she said.
Renewable energy contributed 48.8 per cent of Australia's power during September, according to research company Rystag Energy, while coal represented 47.6 per cent.
— With additional reporting by the Australian Associated Press.
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