Navigating the New Free Daytime Electricity Cap in Australia
The Australian government has recently proposed changes to its Solar Sharer scheme — a plan designed to make electricity cheaper for households by mandating free daytime power offers from energy retailers. While the policy still promises at least three hours of free electricity each day, the introduction of a reasonable use cap means households will need to understand how the system works to make the most of it.
The Australian government has recently proposed changes to its Solar Sharer scheme — a plan designed to make electricity cheaper for households by mandating free daytime power offers from energy retailers. While the policy still promises at least three hours of free electricity each day, the introduction of a reasonable use cap means households will need to understand how the system works to make the most of it.
What Is the Free Daytime Electricity Offer?
The Solar Sharer scheme, scheduled to start from 1 July 2026 in New South Wales, South-East Queensland and South Australia, will require electricity retailers to offer plans with at least three hours of free electricity during the middle of the day — traditionally when solar power generation on the grid is highest.
This midday electricity window aligns with strong solar output, meaning wholesale electricity prices often fall to very low levels (sometimes even negative), providing potential savings for households that shift their electricity usage into these hours.
Why a Cap Has Been Introduced
Initially, the policy intended to offer unlimited free daytime electricity, but a “reasonable use cap” was proposed after consultation. The cap is expected to be set at around 24 kWh per day — roughly the amount a larger household might use if it shifted most of its consumption into the free period.
According to independent energy analysts, households with rooftop solar panels are unlikely to hit this cap under typical use, because much of the midday power they use will be self-generated. On cloudy days or during winter, however, homes without sufficient solar generation or with high demand (such as electric vehicle charging or heavy appliance use) may exceed the free limit and start paying normal rates.
What This Means for Solar and Battery Owners
For homeowners with solar and battery systems, the new capped free electricity offer still adds value — especially when used alongside smart energy habits. A larger solar array helps households both reduce reliance on grid power and avoid even reaching the free electricity limit. Meanwhile, batteries can store excess generation to be used outside the free window, adding flexibility and further saving potential.
Households without rooftop solar but with high daytime usage — for example charging a battery, EV, or running appliances — might be more likely to exceed the cap, incurring normal electricity costs for any energy above 24 kWh. Even in these cases, the midday rate is still generally_ cheaper than evening peak rates_, giving an incentive to shift usage where possible.
Why Solar Still Makes Sense
The introduction of a cap does not diminish the long-term value of solar installations. Solar generation remains one of the most effective ways to lock in low cost energy throughout the day, regardless of tariff structures. As energy demand patterns and pricing mechanisms evolve, solar paired with a battery remains one of the most robust ways to reduce grid dependency and lower electricity bills.
Key Takeaways
- Retailers will soon offer at least three hours of free daytime electricity under the Solar Sharer scheme, starting mid-2026.
- A cap of around 24 kWh/day limits how much free energy a household can use before normal charges apply.
- Homes with solar panels are less likely to hit the cap and benefit more from the scheme.
- Batteries still play a vital role in storing cheap or free electricity for later use.
References & Credits
This article is informed by publicly available analysis and commentary from leading Australian solar and energy experts, including:
-
SolarQuotes. (2024). How to get around the cap on free daytime electricity. Retrieved from
https://www.solarquotes.com.au/blog/get-around-cap-free-daytime-electricity/ -
SolarQuotes. (2024). Solar Sharer Scheme explained. Retrieved from
https://www.solarquotes.com.au/blog/solar-sharer-sso-explained-mb3306/
Additional context is based on current Australian energy market discussions, proposed government policy frameworks, and general industry knowledge relating to solar generation, battery storage, and time-of-use electricity pricing in South Australia.