Victoria will roll out its own version of “free daytime power” from October 1, becoming the latest state to introduce free electricity during the middle of the day.
The plan will give households a daily three-hour window of zero-cost electricity, in a similar fashion to the federal government’s Solar Sharer scheme, which begins in July in New South Wales, South Australia and south-east Queensland.
Dubbed the “Midday Power Saver”, the policy will require electricity retailers to offer plans that include the free period, though households will still need to opt in. More details — including the exact time window and pricing structure — are expected in May.
The initiative is designed to encourage households to shift electricity use into daylight hours, when solar generation is at its highest.
How Does The ‘Free Power’ Plan Work?
Under the Victorian scheme, households that sign up to a participating retail plan will receive a set three-hour window — expected to fall around the middle of the day — where electricity usage is free.
To access the offer, customers will need a smart meter and an eligible plan, and must actively opt in. Unlike some earlier retail-led offers, retailers will be required to make these plans available.
Why Is Victoria Introducing Its Own Version?
Victoria operates outside the default market offer (DMO) system that governs pricing in several other states, meaning federal reforms don’t automatically apply.
Instead, the state is introducing its own version of the Solar Sharer concept, aligning with the national approach while retaining control over how it’s implemented. The policy also reflects the rapid growth of rooftop solar, which is pushing increasing amounts of low-cost electricity into the grid during the middle of the day.
Federal energy minister Chris Bowen has said the government is working with non-DMO states to expand the scheme nationwide by 2027.
How Much Could Households Save?
The Victorian government has indicated savings could range from a few hundred dollars per year up to around $1,000, depending on how effectively households can shift their electricity use.
As with similar offers, those higher-end savings rely on maximising usage during the free window. In practice, that means shifting things like laundry, dishwashing, pool pumps, EV charging and even heating or cooling into the middle of the day.
Households that stick to traditional morning and evening usage patterns are likely to see more modest benefits.
The Catch Behind ‘Free’ Electricity
Despite the headline, the electricity isn’t free in the usual sense. Retailers are expected to recover costs by adjusting tariffs outside the free window — particularly during peak demand periods.
That creates a trade-off: free power for part of the day, balanced by potentially higher prices at other times. For some households, the shift will be easy; for others, it may require deliberate changes to when energy is used.
Who Stands To Benefit Most?
The scheme will be available regardless of whether a household has rooftop solar, so households without solar can also take advantage of cheaper daytime power.
Those most likely to benefit include people working from home, households with flexible schedules, and electric vehicle owners. Renters and apartment dwellers may also see savings — provided they can shift usage into the free period.
A Sign Of Where Energy Pricing Is Headed
Victoria’s plan reflects a growing shift in electricity pricing across Australia. As solar generation continues to grow, the gap between cheap daytime energy and expensive peak-period power is widening.
“Free power” offers may grab attention, but the underlying trend is towards more time-sensitive pricing — where when you use electricity increasingly matters as much as how much you use.
Victoria’s free daytime power plans will be released closer to October. In the meantime, more detail has been revealed in recent weeks on the federal Solar Sharer scheme.
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What a big con job because of the next state election in November and they are trying to buy votes
They’ll be pushing it this time, no matter what the incumbent party tries.
Besides, these offers are already offered by globird, ovo, and agl (the parent company of ovo).
And now with no cap like you see in the ferderal terms, so will other states under the current free power plans see theirs capped too from July 1st ??
Remains to be clarified.
As per the article, it’s likely many thinking this would be good for them would be FAR worse off by the time higher ‘other time’ tariffs are increased, and probably higher daily sully charge too.
Victoria gets less sun in the winter than the northern states. I expect that our battery will still be being charged between noon and 3pm in the winter and we will be significantly exporting less electricity to the grid in that window than we are now. Not everything is a conspiracy!
Oh well, gives the Opposition plenty of time to come up with something more vote-worthy.
Opposition meaning Liberals, or Opposition meaning One Nation? The latter at least, as far as I’m aware, are supportive of coal power so the decommissioning dates for Loy Yang A & B, as well as Yallourn, would probably be pushed back from the next few years.
Since coal averages about two-thirds of Victoria’s power, at times topping 90%, and since Victoria regularly supplies South Australia with power – exports of up to 30% and SA importing over 40% at times, the reduction of critical infrastructure seems dangerously myopic!!!
Energy Australia apparently had plans to close Yallourn early, but it’s not clear if the lead time has been sufficient to cope with rising demand. If there’s no redundant power supply and baseload power is simply dropped from the system …
Yes I get the position won’t be popular on SQ, but if the sun don’t shine, and the wind ain’t blowing …
Hi John,
What about when the Stait isn’t Hormuz’ing?
Australia doesn’t have oil that’s economic to recover but nothing is as reliable as sunrise & the wind is always blowing somewhere, especially offshore.
And mentioning the opposition, can you name one thing One Nation has actually achieved in 30 years? There’s some prosecutions for electroal fraud and sex crimes amongst the ranks, but what about legislation proposed or delivered?
What has Poorlene done aside from dog whistling, throwing stones and collecting AEC funding?
The “policy” of building a new coal burner & shipping coal from Qld to Pt Augusta is economic madness mixed with populist idiocy.
As far as I am aware, SA pricing is not subject to a DMO [perhaps someone could post how power pricing is set in that State].
But just as important, you do not have to subscribe to a Time-of-Use Tariff, which offers a no-cost per-kWh rate for specific time intervals within each 24-hour billing cycle.
A smart approach would be to complete a consumption profile [my daily data is available at 5-minute intervals] to determine the cost-benefit of the proposed tariff, whether General on Demand or Time of Use.
Is the no cost per kWh time interval a con well without posting an analysis as proof? I think the comment is a throwaway of absolutely no merit.
Hopefully this doesn’t include Winter, as it would just increase the seasonal load when solar generation is the lowest. It won’t just result in intraday load shifting, it will actually increase overall demand as people ramp up their heating/pool etc.
Per Open Electricity, Solar generated 7.7% of June 2025 Vic consumption but 25.8% of December consumption. Value for solar was negative in December, but $110/MWh in June.
IMO they should allow make this seasonal, so free in the warmer months but not in winter. They should also allow seasonal Feed In Tariffs, so that instead of getting paid 1c/kWh in Winter you get paid closer to what the value to the grid is which is ~10c/kWh.
1c/KwHr FIT? I wish! Our is 0.04c, next to nothing.
Hi David,
I prefer to think of that FIT rate as fuel for the car at 6c/1000km.
Fuel for thought
Your PPA estimates what the wholesale spot price of power you will be paid for the term of the agreement including any variations that have been agreed to.
There [excluding the so-called Sun Tax], it is usual that no Distribution, Network of Sales Administration costs are applied to what you export, so you are being paid the market price. In addition, you are usually shielded from negative pricing events unless you trade in the wholesale market.
Given that most rooftop solar exports are not subject to dispatchable power pricing arrangements, you are paid for what you export that is not throttled, whether there is demand or not.
And domestic solar is a home improvement, not a business opportunity. STCs apply to specific hot water systems, just like rooftop solar, and for standalone properties, there is no market where you can sell surplus hot water surplus to your requirements.
Excluding winter months in Victoria would be a good idea. Interesting to see how it is implemented. Hopefully it wont be forced upon those who dont want it. Im happy with my current usage and rates with grid tied system and hotwater diverter.
There will be less electricity generated by Solar in the winter than in the summer and the further you are away from the equator, the more this will be true. I assume this is a factor in Victoria delaying their introduction to the scheme. I wonder if we have been overestimating the affect of solar generated electricity for a year as a whole based on our summer experience. We have 13.2kW of panels and have recently upgraded our iStore battery from 10kWh to 15kWh. We now have reverse cycle ducted air conditioning and are gas free. It will be interesting to see our energy bills this coming winter in Melbourne compared with previous years.
Would you like me to list what a 10.03 kW system generates in FNQ for each month, for January through December? And I think that, depending on the system’s lat/lon, there can be very little seasonality.
The further south you are, the shorter are the daylight hours in winter and the lower the sun. In addition there are more overcast days. In the absence of gas heating, more electricity will be used for heating.
Thank you for the response.
A common assumption is that every consumer has the same consumption profile, which may include solar and batteries that has produced a mismatch in the moment production with consumption.
Now I am a pensioner living in FNQ, running air conditioning most days, 365 days a year. Now, my consumption profile is unlikely to mirror that of my next-door neighbour, who works and is not in residence for most of the day.
Now, the last time I did the research, distributed PV capacity 4.2M systems was about 25% of NEM [Eastern Seaboard Grid] generator capacity, of which 17% could be attributed to behind-the-meter consumption, with the balance exported, not being throttled based on the then in the moment demand.
The NEM distributes power generated and consumed in QLD, NSW, ACT, VIC, TAS and SA. If you were to research negative pricing events [a material issue which most consumers are shielded from] you might form a different view of system seasonality base on location.
It is interesting to see what will be the price outside the Free Power window.
Not a good policy. It will result in overall higher bills for most and all but destroy the incentive to buy panels for battery owners.
I can literally set a timer to charge my battery with a few swipes in the app and pay a sparky to switch my hot water from off peak to a timer.
Perversely I could empty my battery and claim whatever fit just before the period starts them recharge from the grid for free.
My bill becomes supply charge less exports (arbitraging electricity I can now buy for free). But who is paying for that? Someone struggling to make ends meet, renters who can’t install battery, pensioner’s who can’t realize the ROI due to fading health, etc
I have no incentive to buy energy efficient appliances.
They could have instead gone for a 10c/KWh for those hours instead of free. It would have achieved the incentive goal of shifting load without creating so many distortions.
I’ve seen a few posts on the SQ blog over the last few months referring to people who own batteries but no solar.
Is there any information to suggest that such a group actually exists? In meaningful numbers?
The price of panels has dropped dramatically in the last 20 years. It seems hard to understand the motivation to buy a battery and no solar to go with it.
It may be difficult for some people to install solar panels, for example those with apartments in multi-story blocks.
I have wondered if anyone had done the calculations on that, but without knowing all the finer details, I think more motivation to install the minimum amount of solar to get the battery subsidy, rather than a battery only solution is more likely. Even if the solar is unlikely to actually generate much power such as when your roof is mostly shaded..
Scott indeed, the cost of any sort of decent solar along with a battery means you are somewhat self sufficiant, hopefully covering at least 90% of your usage through all but worst of winter, and sending something back to the grid / making a contribution to reducing stresses on the grid.
Having a battery only, probably done before the battery rebates came along, all well and good, you are then leeching off the many, but you are at the mercy of retailer offers, not a good place to be at any time.
Change can be swift and never to a consumers benefit.
Look at the caps now on the daily free power offer, and $5 a day supply charge the AEMC is considering as part of their review of an “energy market overhaul designed to “modernise” pricing”.
This is worse than the drops in FITs to miniscule levels in many states already, which is understandable in the home solar growth.
I’m saying it will destroy the incentive not that they won’t have any solar. They need it to qualify for the battery rebate.
But I should have called out I’m referring to the economic drivers. Those with other drivers like environmental, self sufficiency, grid unreliability etc will still likely size solar in the “as much as fits” philosophy.
But on pure economics, you would install the smallest cheapest system on the closest easiest roofline. (eg 1 panel with a micro inverter AC coupled or the smallest number of panels needed by the string) and use the savings to maximise the size of the battery with a large enough inverter to fill the thing during the free window (limited only by your service fuse (s,) any DNSP limits,)
If a loan provides the capital to purchase a system and the loan repayments are less than the average cost of paying for the power, why would that cashflow outcome be an issue for affordability?
Didn’t have much choice with a state election around the corner, political suicide to let the the punters see their neighbours over the border getting free power for 6 months leading up to the election.
For those wondering what the rates might look like, you can look at existing plans with free periods. For example, compared to Globird’s peak/off-peak plan in the CitiPower area, the plan with 4 hours free has ~8 c/day more for the daily supply charge, and also ~2 c/kWh more in both the peak and off-peak times (~18 c and 32 c/kWh). And the peak time window is also different and longer by an hour.
For a house using 20 kWh per day, using 5 kWh in the free period instead of the off-peak times would save 90 c per day.
Then balance that 90 c against the extra costs. You’d wear an extra cost on the remaining 15 kWh of about 2 c/kWh (total of 30 c) plus the extra 8c per day. That comes to 38 c. The longer peak window (until 11 pm) might also mean an extra 1 kWh of peak power rather than off-peak, so perhaps another 14 c. So an extra ~52 c on the extra cost side.
That means saving ~40 c per day, or almost $150 per year.
It’s government , so it’s either a con or plain inept . No need to analyse
Would you like me to share with you my analysis?
There already is a 4 hour free elctriciy plan available in VIC. Its through Globird Energy (4FORFREE) and its not a con. The shoulder rates are still lower than other plans I researched.
I have recently installed batteries and I can program the invertor to charge the batts for this 4 hours over and above the house requirements and solar generation (it takes about 3 hours at a setrpoint of 8.5kW loading). I can then program the batts to discharge to the grid from 5pm to 9pm and thus gain some limited FIT benefits from the providor.
In winter/cloudy days I can still load the batts during the 4 hr period and this lasts all the way through to the next day with plenty of % to spare. Having solar and batts is probably a more extreme example of the 3 (or 4) hour free electricy benefit.
So the plans are out there already and there can be benefits for sure..
Cheers!
What should not be ignored is the setting aside of the possibility that the current business model, which is reliant on kWh consumption to cover the cost of Distribution, Network and Retail Administration, Clean Energy obligations, and other costs, will not be changed.
Those who maintain connectivity to the Grid [as the energy provider of last resort or for kWh exported] may be required in the future to make a contribution to cover that cost. If, when and how that might be calculated might occur sooner rather than later.
Put simply, $6 billion/year in lost non-generation revenue to rooftop solar systems has to be a core driver of tariff reform across Australia.
Based on the current per-kWh [import and export] pricing business model, I recommend analysing your consumption profile to size a solar system in kW that can produce kWh to match daily consumption plus export kWh, at a price point that offsets the fixed daily fees.
Ha-ha funny, in Victoria 155kw at 0.04 cents made and massive 7 cent off my bill.
2027 you will be a charge to export power as to much solar.
3 hours of free power is to deal with that, so exporting power will pay to export power others get for free.
They is no free, export pay and they will be price rises to peak, off peak, service to property, government being in new charge so power companies still make big profits.
Based on NEM Generation Capacity, Distributed PV [Domestic and Small Business] excluding Utility Scale is 25%, of which 17% production for self consumption is behind the meter and 8% is exported to the grid.
Now it just so happens you might need to provide evidence that 8% is exported between the hours of 11:00 am and 2:00 pm because I do not believe what you have posted.
Many thanks to Solar quotes for the help and assitsance we received sorting through the depths of solar. Ubderstanding what we were buying, we finally bit the bullet with one of the providers suggested by Solar Quotes and have not looked back since our system was turned on in late 2025.
At the time OVO were the only electrical company offering three free hours power usage, from 11 am to 2 pm during the day. They were the only ones (at the time) that had this offer. However unlike the other electrical supply companies there is an opt out fee theat needs to be paid if you want to switch to another provider after signing on with OVO. From memory it was about $87.00 you had to pay on termination of your contract with OVO, if you wanted to shift away to another provider. This latest news may see other suppliers offering the same deal. We will wait and see.
thnaks again Solar Quotes.
Confused – please explain…
Contacted our current provider requesting a quote on what savings we could expect if we were to take advantage of the 3 hours free power offer. The response was ‘sketchy’. We queried the response and were advised our current plan was best – nothing to see, move along… We are both retired and could ensure usage was predominantly in the 3 free hours bracket.
Is this just smoke and mirrors – again?
The benefits of switching to a 3-hour free plan depend on:
1) how much you currently use in the free period and how much outside this period (the 3-hour free plan will have higher rates outside the free period); and
2) how much of your use you could switch into the free period to reduce use in the non-free period.
Your provider probably only looked at the first part of this. The ability to switch use out of the non-free period will vary by household.
I am on a free 3-hour plan and I can switch grid use outside the non-free period (because I have a battery). I also heat my hot water then, and concentrate car charging. On very cold days or very hot days, I also heat/cool my house then to reduce demand for heating/cooling later in the day.
Combined with a good FIT in the late arvo/early evening (mostly zero at other times), I make about $1/day despite being a 100% electric household.
Hi Bil.
If you provide me with your average kWh consumption profile in 5 – 15 minute intervals for 24 hour period in *.csv file format and what the cost per kWh for each day, shoulder, and Peak time interval, I would be more than happy to analyse the benefits of any existing tariff you have subscribed compared with the proposed ToU Free Day Time Interval.