AGL Launches ‘Three For Free’ Electricity Plan

Energy retailer AGL is offering a new residential power plan offering three hours of ‘free’ electricity each day. It sounds like a good deal, but is it? Plus, news on AGL’s latest VPP venture.

Launched last week and initially available to South Australian households with a smart meter, the “Three for Free” plan provides free electricity usage from 10am to 1pm daily.

“The Three for Free plan is about giving more Australians the opportunity to access similar benefits as someone who has solar that is self-consuming in the middle of the day,” said AGL’s Chief Customer Officer Jo Egan. “Customers on the plan who shift their energy use can create savings on their electricity bills, they don’t need to install solar panels to reduce their energy usage costs during daylight hours.”

Part of the reason AGL can offer ‘free’ electricity is thanks to the many households and businesses that have already installed solar panels. So much capacity has been added over the years that it has pushed down wholesale power prices during that time window, with negative prices becoming more common. It’s an example of the broader community benefits that rooftop solar power can bring.

The Three For Free plan might also be of interest to solar owners — those with small systems, or for days when the weather is unfavourable for solar energy generation, or for a helping hand topping up a home battery or electric vehicle.

But is it a good deal for either group?

Three For Free Plan Comparison

Comparing Three For Free with AGL’s Residential Smart Saver on a flat rate tariff plan in my neck of the woods shows:

Comparing Time of Use (ToU) rates between the plans also shows Three For Free has more expensive rates. It’s same difference on the supply charge as with the flat rate plan but less of a gap in terms of usage rates for the different periods. And in all cases, the solar feed-in tariff certainly isn’t anything to get excited about.

Whether Three For Free works out cheaper will depend on how a non-solar household utilises it. But if you own a modest solar power system — or are thinking about skipping solar panels altogether — and considering buying a large battery system to charge for free during the 10am to 1pm window to help power your home for the remaining 21 hours, consider what SolarQuotes founder Finn Peacock had to say recently.

Still, it’s interesting to see more of these types of plans introduced.

Of course, AGL isn’t the only show in town. You can see how energy retailer plans stack up against each other using the SolarQuotes electricity plan comparison tool. If you haven’t compared plans for a while, it’s a good idea to. Late last year, the Australian Competition and Consumer Commission (ACCC) estimated over 80% of National Electricity Market (NEM) households are paying more for electricity than they need to; with households on offers over a year old paying on average $238 more annually than those on newer offers.

The Three for Free plan is part of AGL’s Community Power program — and on that note, on to some other recent AGL news.

AGL To Roll Out More Community Batteries

On Tuesday, AGL announced it is to build and operate 16 community batteries in South Australia as part of its Community Power program. AGL says the initiative will provide cheaper electricity to more than 10,000 low-income and energy hardship households through an energy plan priced at 25 percent below the current SA default market offer (DMO). The 700 kW / 1828 kWh batteries will join AGL’s Virtual Power Plant (VPP).

“Consumer energy resources like rooftop solar play an incredibly important role in the energy transition, representing an increasing part of Australia’s total energy generation,” said Egan. “If we can use these resources more effectively and efficiently, in ways like community batteries and virtual power plants, this will help us provide more affordable energy to some of the customers who need it the most.”

The Empowering SA initiative is being delivered in partnership with the SA Government, and is also getting federal support. The Australian Renewable Energy Agency (ARENA) is providing funding of approximately $11 million for the project, with AGL kicking in $4 million.

The announcement follows AGL’s recent acquisition of South Australia’s Virtual Power Plant (SA VPP) from Tesla.

Virtual Power Plants are getting more attention given the federal government battery rebate requires batteries to be VPP-capable (but you don’t have to join one), the NSW government is offering a VPP incentive, and WA’s solar battery rebate requires VPP participation.

You can learn more about the benefits and drawbacks of Virtual Power plants here, and see programs compared side-by-side on SolarQuotes’ VPP comparison table.