The short version
Key points
- The scheme is expected to begin next year in New South Wales, South Australia and southeast Queensland.
- Households will need a smart meter and must shift electricity use into the late-morning to early-afternoon period to benefit.
- Renters, apartment residents and retirees without rooftop solar may be among the groups most likely to benefit.
- Households with solar and batteries are likely to gain less because they already have access to low-cost daytime electricity.
- Retailers and industry groups have warned that costs could be recovered through higher prices outside the free period.
How the three-hour free period is intended to work
The proposed arrangement will require energy retailers to offer every household three hours of zero-cost electricity during peak solar production, broadly described as late morning to early afternoon. It is scheduled to start next year in New South Wales, South Australia and southeast Queensland.
The policy is based on the fact that wholesale electricity prices can become very low, or sometimes negative, when rooftop solar generation is high. The government’s argument is that customers should be encouraged to use more electricity during this period rather than adding to the evening peak, when solar generation is lower.
Customers will need a smart meter and will have to schedule appliances or activities during the free window. Potential uses include dishwashers, washing machines, electric-vehicle charging, air conditioning and hot-water systems.
Who could benefit most?
The policy is specifically intended to include people without rooftop solar, including renters and apartment residents who generally cannot install their own systems. Retirees and people who work from home may also find it easier to use electricity during the middle of the day.
The largest savings would be available to households able to shift substantial electricity consumption into the three-hour period. An electric vehicle could be charged during the window, while several household appliances could also be scheduled to operate then.
However, many households are away from home during weekday daytime hours. A dishwasher might use around 1 to 2 kilowatt-hours and a washing machine around 2 to 3 kilowatt-hours, according to the examples discussed in the video. Without larger appliances, an electric vehicle or flexible work and home schedules, the average household may not be able to use tens of kilowatt-hours during the free period.
Why solar and battery owners may gain less
Households that already have rooftop solar and a home battery are likely to see less additional value from the scheme. They already generate low-cost daytime electricity and can store some of it for later use. Drawing more electricity from the grid during the free period could still be possible, but it may add little to their existing savings.
The video refers to Australian Energy Council figures suggesting homes with solar already pay about 18 per cent less on average, with batteries potentially reducing bills further. It also notes that current battery subsidies generally assume the household has solar panels or is installing them.
Concerns about prices and the electricity system
Critics argue that free electricity during one period does not mean the underlying costs disappear. Retailers may seek to recover the cost through higher prices at other times, particularly when networks and generators must meet evening demand. Existing electricity plans already offer midday off-peak periods, although they may not provide power at no charge.
Industry bodies have also argued that the policy was introduced with limited notice and could create complexity or unintended consequences. The Australian Energy Council warned that mandatory free-period plans could damage confidence if similar products are already available in the market.
The government expects shifting demand to midday to reduce evening pressure and potentially lower network costs. The video notes, however, that power still has to be delivered through wires and substations, and the policy alone will not remove those infrastructure and balancing costs.
Possible savings and broader alternatives
The savings will vary according to how much electricity a household can move into the free period. Estimates mentioned in the video range from around $50 to $100 per month for some customers able to run larger loads during those hours, while a more modest saving of a couple of hundred dollars is suggested for some electric-vehicle users. These figures are estimates discussed in the video, not guaranteed outcomes.
The broader alternative raised is to expand support for rooftop solar, home batteries, standalone batteries and smart electric-vehicle chargers. Community schemes or incentives for landlords could potentially extend those benefits to renters and lower-income households, although the video does not provide details of such programmes.
TechManPat’s conclusion
I see the three-hour free-power window as a workable but limited policy. It could help households that can easily shift substantial usage into the middle of the day, particularly renters, retirees and some electric-vehicle owners. However, I believe rooftop solar and home batteries still provide a stronger long-term way to reduce electricity costs, and I would rather see broader support for those technologies alongside investment in the electricity network.
This knowledge-centre summary is based on the linked TechManPat video and reflects the information available when it was published. Check current pricing, availability and policies before acting.
