Electricity retailers will soon be required by the federal government to offer free electricity to households for at least three hours a day under what’s been dubbed the Solar Sharer Offer (SSO).
How Will The Solar Sharer Electricity Offer Work?
Announced by Minister for Climate Change and Energy Chris Bowen, the Solar Sharer Offer will require retailers to have a standing offer time-of-use (ToU) electricity plan that provides free electricity to households for at least three hours in the middle of the day.
It’s called “Solar Sharer” as this is the period during the day when solar energy exports into the grid are at their peak; thanks largely to the more than 4 million rooftops across Australia with solar panels. Wholesale electricity prices are generally very cheap during this period as a result, and increasingly moving into negative pricing territory at times.
Percentage of wholesale electricity prices below $0 MWh and above $300 MWh. Source: Solar Sharer Offer (SSO)
Consultation Paper 2025–26
It’s envisaged the SSO will be introduced in July next year in three Default Market Offer (DMO) regulated states — in New South Wales, South-East Queensland, and South Australia; with view to expanding it across Australia in 2027.
Customers who sign up to the Solar Sharer Offer will need to have a smart meter; and to really benefit from it, be willing and able to move a decent chunk of their electricity consumption to the window it is being offered; e.g. 11am – 2pm.
The devils in the detail yet to be settled are other aspects of the SSO, such as supply charges, free hours window and tariff rates outside that.
Some electricity retailers have already introduced market offers with ‘free’ electricity. AGL is an example, and supply and usage charges on its “Three For Free” plan are higher than its “Smart Saver” that doesn’t have free hours.
These free hours market offers will be able to continue, but the Solar Sharer Offer will serve as a benchmark price.
What’s This ‘Standing Offer’ And ‘Default Market Offer’ Bizzo?
A standing offer is a type of electricity contract that a customer is placed on if they don’t choose a market offer for whatever reason. A Default Market Offer (DMO) is the maximum price that energy retailers can charge for these standing offer contracts. It’s meant to act as a safety net to prevent customers on a standing offer from being charged excessively high prices.
NSW, SEQ and SA are DMO-regulated regions, with the Default Market Offer overseen by the Australian Energy Regulator. Other states have different arrangements regulated by state bodies. For example, Victoria has the Victorian Default Offer (VDO), which is administered by that state’s Essential Services Commission (ESC).
The DMO price also acts as a reference price, to which market offers are compared. While a minority of residential electricity customers are on standing offers – approximately 8% – these offers also set the scene for pricing of market plans. When the DMO price goes up or down, market plans usually follow.
Solar Sharer is a part of the government’s broader Default Market Offer reforms process.
“Reform to the DMO will strip out unnecessary costs and expand protections to all standing offer customers and small customers in embedded networks, including renters and apartment dwellers,” said Minister Bowen.
Broader SSO Benefits
The Albanese Government says Solar Sharer will lower electricity costs generally by reducing peak demand in the evenings as customers shift more of their consumption to the free electricity window.
“A lower evening peak has flow on effects throughout the system, minimising expensive peak electricity prices and reducing the need for costly network upgrades and interventions to ensure grid stability,” states the announcement.
The SSO will also provide households without solar panels some of the financial benefits of having a system. While they’ll need to have a smart meter, all customers in NEM jurisdictions should have smart meters by 2030.
A Boon For Home Battery Owners?
Solar battery owners may be salivating over the thought of getting three free hours of electricity a day to charge up their energy storage systems for nix; particularly on low/no-sunshine days. And there’s certainly many more battery owners now than there was just a few months ago due to the Cheaper Home Batteries program. Around 108,000 systems have been installed and commissioned since launch, and the number is rapidly increasing.
For some households considering a home battery, there may be a temptation to get a really big storage system in preparation to take advantage of free hours; and perhaps foregoing installing solar panels altogether. Those approaches may not work out. And again, other important details of the Solar Sharer Offer are yet to be nutted out.
Electricity Retailers Caught Off-Guard
The announcement was a surprise to many, including electricity retailers. The peak body representing those businesses, the Australian Energy Council (AEC), wasn’t happy with what it says was the government’s failure to consult on its Solar Sharer scheme.
“This lack of consultation risks damaging industry confidence, as well as creating the potential for unintended consequences,” said AEC Chief Executive Officer, Louisa Kinnear yesterday.
Unintended consequences such as electricity prices potentially rising outside the free hours window (including evening peak times) and a further erosion of feed-in tariff rates are legitimate concerns as the costs of the SSO must still be borne somewhere.
The AEC (and everybody else) now have an opportunity to have their say on the Solar Sharer Offer through a consultation that has just launched. The Federal Government is seeking feedback on the SSO’s design on issues including:
- Tariff design.
- Impacts on consumers.
- How the SSO will work in with other reforms.
- Consumer risks.
- Opportunities and risks associated with implementation.
The draft Solar Sharer Offer consultation paper can be viewed here. Feedback needs to be submitted by 5:00pm AEDT on Friday, 21 November 2025.
About Michael Bloch
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I love that they’re being a bit more strategic now, targeting households. At the same time it reinforced for me how much we’re still fighting the elephant in the room in electricity, the privatisation of much of the sector years ago, which makes reform very hard. If anything the shift to renewables is making that worse, not better, we’re now privatising down to the level of the household, becoming micro-grids. Fantastic in many ways, but in terms of the longer-term management of the grid I think creates a series of headaches, to have essential social infrastructure in the hands of ordinary people.
Congratulations Chris Bowen.
A welcome inititiative for all who long to see the power imbalance corrected; not just beween lunchtime and dinnertime, but also between consumer and retailer.
A bold move by the government, but it is needed to shake up the status quo.
It will be interesting to see if those of us still on flat rate tariffs with smart meters are forced off the flat rate to get access.
If nothing else, I would at least like my hot water to have access to the free power window.
If retailers are forced to comply then they’ll just up the consumption rates around the non-free hour period to compensate. AGL has already done this as mentioned in this article.