Australia Unveils Free Power Program for 475,000 Households During Peak Solar Hours
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Energy Minister Chris Bowen announced a mandatory free power program Tuesday that will give 475,000 Australian households three hours of electricity at no cost during the middle of the day, marking the government’s latest attempt to reduce energy bills amid rising cost-of-living pressures.
The program will require electricity retailers operating in New South Wales, South Australia and South East Queensland to offer customers free power during peak solar generation hours, with the Australian Energy Regulator overseeing implementation to prevent price gouging. The initiative takes effect in default market offer states first, with plans to expand nationwide.
“Put them in charge of their own energy use so they can manage their energy use to maximise their best interests, not the best interests of the energy companies,” Bowen told reporters in Canberra.
The announcement drew immediate criticism from the opposition, which dismissed the plan as a desperate distraction from the government’s failure to deliver promised power price cuts. Shadow Attorney-General Andrew Wallace said most Australians are paying $1,000 more per year for energy despite Prime Minister Anthony Albanese’s repeated pre-election promises of $275 reductions.
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How the Program Works
The free power window will run for three hours during midday when solar generation floods the grid and wholesale electricity prices frequently turn negative. Energy companies already receive power for free or are paid to take it during these periods, Bowen said, and the program ensures those benefits reach consumers.
“Energy companies are, as I said, getting this power for free in the middle of the day the vast majority of the time,” Bowen said. “Just look at your app and you can see energy prices are negative. So I think that benefit should be passed on to consumers.”
The program targets households that can shift energy consumption to daytime hours. Bowen cited examples including people working from home who can run washing machines or dishwashers during the free window, retired couples managing household tasks during the day, and workers using apps to remotely schedule electric vehicle charging or appliance use.
“Someone working from home who can, you know, put their washing machine on or the dishwasher on, pop downstairs while they’re working and say, well, okay, it’s one o’clock now, power’s free, so I won’t do that tonight, I’ll do it right now,” Bowen said.
Regulator to Prevent Price Gouging
The Australian Energy Regulator will regulate the program to ensure energy companies comply with consumer interests and don’t offset free power with higher rates during other hours. Bowen said some retailers including AGL already offer similar programs voluntarily, but mandatory regulation provides consumer protection.
“The good news is that the Australian Energy Regulator is going to regulate this and make sure that the energy companies comply with the best interests of the consumers,” Bowen said. “But this gives consumers the peace of mind that the AER, our independent regulator, has put the offers through their paces and ensured that there’s no price gouging going on.”
The regulator plans to release a discussion paper about the next default market offer within days, taking feedback on detailed implementation. Bowen said the AER views the initiative as a positive step helping it fulfill its mandate to put consumers first.
Energy companies operating in default market offer states must comply with the new rules or face regulatory consequences.
Grid Benefits Beyond Individual Savings
Shifting demand to midday hours benefits the entire electricity system by reducing evening peak demand when coal and gas generation typically increases, Bowen said. Even consumers who don’t participate in the free power program benefit from reduced grid stress.
“As people move their demand to the middle of the day, to the degree that they do, that takes pressure off in the evening, means less use of coal and gas, our most expensive form of energy, and helps everyone,” Bowen said.
If participants move 10% to 25% of their energy use from evening to midday, it reduces overall system costs and reliance on expensive fossil fuel generation during peak periods.
The program leverages Australia’s high rooftop solar penetration, which frequently produces more power than the grid can absorb during sunny midday hours. Bowen said the initiative represents an opportunity created by Australians embracing renewable energy through rooftop solar installations.
Not a Universal Solution
Bowen acknowledged the program won’t work for everyone and isn’t meant as a comprehensive answer to energy affordability challenges. Households unable to shift consumption to daytime hours may not benefit directly, though they still gain from reduced evening demand.
“This was never claimed to be a one-size-fits-all answer everyone’s problem,” Bowen said. “But as I said, think of the example. Someone working from home who can, you know, put their washing machine on or the dishwasher on.”
The minister emphasized the program offers choice rather than compulsion. Customers can evaluate whether shifting energy use to the free window makes sense for their circumstances and opt in if beneficial.
“It’s up to people whether they take this opera up,” Bowen said. “We are requiring energy companies to make this an option. I think that’s a good thing. Now, it’s not for everyone.”
Questions About Equity and Impact
Reporters questioned whether the program favors professionals who can work from home and wealthier retirees over lower-income workers tied to traditional schedules. Bowen rejected the characterization, pointing to retired pensioner couples as likely beneficiaries who aren’t typically wealthy.
“Now the third example that I used was a retired pensioner couple living at home,” Bowen said. “I mean, they are not likely to be wealthy Australians.”
He reiterated that universal grid benefits from reduced evening demand help all consumers regardless of individual program participation.
Electricity retailers warned there’s no such thing as a free lunch, noting they incur costs delivering power to homes even during the free window. Bowen said regulator oversight ensures companies can’t shift those costs improperly to participating customers through higher rates at other times.
Battery Installations Surge
Bowen revealed 110,000 Australian households have now installed home batteries, which he described as a positive development for grid management and consumer savings. The figure demonstrates growing adoption of storage technology that complements solar panels and can charge during free power windows.
Solar panel and battery owners already receive substantial benefits from generating and storing their own power. Bowen dismissed suggestions that extending free power to non-solar households diminishes incentives for solar adoption.
“I don’t think that extending the benefits to some other people means that the benefits of yourself putting solar panels on are somehow reduced,” Bowen said.
Opposition Slams Timing and Efficacy
Wallace called the announcement a “desperate attempt to try and distract from Labor’s total failure to deliver on their power reduction prices.”
“In the lead-up to the 2022 election, on 97 occasions, the Prime Minister promised Australian people they’d be paying $275 less than what they are now,” Wallace said. “And today most Australians are paying $1,000 a year more for their energy costs.”
The Shadow Attorney-General said industry groups warn the proposal could impact competition and potentially increase prices, though he didn’t provide specifics about which groups or how.
When asked about Bowen’s accusation that the Liberal Party engages in “science denialism” on net zero targets, Wallace said the party is conducting a detailed policy analysis through a working group led by Dan Tehan.
“We will land on a policy around net zero in our good time,” Wallace said. “Rush decisions do not make for good policy.”
Wallace declined to commit to maintaining Australia’s participation in the Paris climate agreement framework, saying the party would complete its deliberative process before announcing positions.
Energy Rebate Scheme Ending
The government’s energy rebate scheme is ending shortly, though Bowen wouldn’t directly link the free power program as a replacement. He said the government will continue taking evidence-based approaches to give Australians opportunities for cheaper energy.
“Obviously, as we’ve always said, we will do what we need to do with the evidence-based in front of us to give Australians the best opportunity for the cheapest energy prices possible,” Bowen said.
COP Hosting Bid
Bowen mentioned Australia’s bid to host a United Nations climate conference in Adelaide, saying the Pacific region has strongly supported the effort. He described it as an opportunity to showcase Australia’s renewable energy potential at the world’s largest climate forum.
“The big opportunity is to host a COP in Australia, and I can assure you the Prime Minister would be there in Adelaide,” Bowen said.
The minister positioned the free power program within broader climate and energy transition policies aimed at leveraging Australia’s renewable resources while reducing household costs.
What Happens Next
The Australian Energy Regulator will release its discussion paper and gather feedback on implementation details in coming days. Energy retailers in default market offer states will need to develop compliant offerings before the program launches.
The 475,000 households on default market offers will become eligible first, with the program serving as a benchmark for market offers more broadly. Expansion to other states and territories requires cooperation with state governments.
Bowen said he makes no apologies for prioritizing consumer interests over energy company preferences as the program rolls out.
“I work well with energy companies, but they are not put first,” Bowen said. “Consumers are put first. And energy companies will need to comply with these rules if they want to operate in default market office states.”
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