Is three hours of free electricity too good to be true?

There’s been a lot of buzz surrounding the Labor Government’s Solar Sharer Offer (SSO), which will provide three hours of free electricity daily to eligible customers from 1st July.

The SSO will tap into the massive afternoon solar generation saturating the grid to deliver  cost-free electricity during these hours:  

• NSW and South East QLD: 11am - 2pm
• SA: 12pm - 3pm.

Each household can use up to 24 kilowatt hours (kWh) of electricity per day in the three-hour window completely free of usage changes, although a daily supply fee applies. 

On paper, this is a win-win situation, allowing customers to save money and reduce the strain on the electricity grid during peak hours. 

But what’s the catch?

How does the Solar Sharer Offer compare to the flat rate standing offer? 

Let’s go straight into the numbers. We’ll first start with a comparison of flat rate and SSO reference prices. 

A flat rate tariff refers to usage rates that remain constant throughout the day. 

On paper, opting into the SSO rather than the flat-rate standing offer would save you a modest sum. However, the Australian Energy Regulator (AER) uses annual usage estimates and patterns in each electricity network to reach these figures. 

In every state, usage rates at peak periods (e.g. evening) are considerably higher on the SSO than on the equivalent flat rate offer. That’s because retailers need to offset costs incurred during the free electricity window. 

So whether or not the SSO is worth it depends on whether the savings from these free hours surpass what you spend on increased peak usage rates.

How much can you save on the Solar Sharer Offer?

For a household to save the maximum amount with the SSO, they would need to shift 24kWh of peak electricity use to the free three-hour window. Unfortunately, this is nigh impossible for most Aussies who still have to rely on grid electricity when the sun sets."

Here’s a more realistic example, with a modest 5kWh of electricity use shifted from night to day: 

If John signs up for the SSO and defers 5kWh of his peak energy use to the free window, he would save $2.10 per day or $766.50 for the financial year. 

Keep in mind that this example is specific to the Sydney (Ausgrid) DMO and the rates listed in the table below.

When is the Solar Sharer Offer not worth it? 

• If your household consumes most of its electricity in the evening, you’d be left paying excessive usage rates for little benefit. 
• If you aren’t at home to use the free electricity. 
• If you are uninterested in shifting the use of energy-intensive appliances during those free hours.

To determine whether you can actually save by moving to the SSO, you’ll need to run the numbers based on your actual electricity use throughout the day. You can do this by:

• Downloading your provider’s smartphone app (if you have a smart meter installed)
• Installing a power usage monitor
• Reading your latest electricity bill.

How to get the most benefit from the Solar Sharer Offer’s free electricity hours

The SSO’s 24kWh limit is more than enough to power the average household each day - but here's the big catch. Because the free electricity window is limited to three hours, it’s very difficult to use up that daily cap. 

24kWh is the equivalent of around 24 cycles of a standard washing machine, 32 loads in the dishwasher, or turning your hot water system’s booster switch to ‘on’ for 6.5 hours. 

In actuality, most Aussies would only be able to run each appliance once in the free period, leaving the booster switch turned on during those three hours. 

The easiest way to use up your daily free electricity without being at home is to either install a solar battery or set your electric vehicle (if you have one) to charge. 

If you have a solar battery

In spite of its name, you can install a solar battery without a solar system installed. If you have a solar battery installed, you could set your battery to recharge during the free hours of electricity.

At minimum, you will need a 24kWh solar battery and an 8kW inverter to store the full 24kWh amount within three hours.  

However, a smaller battery and inverter should store enough free electricity to offset your peak-hour electricity use when the sun sets.

Keep in mind that without solar panels installed, you may not qualify for specific solar rebates. In addition, the payback period, which is the time taken for your battery’s savings to exceed its installation cost, will take much longer. 

If you don’t have a solar battery, the government-run Cheaper Home Batteries Program is still underway, offering up to 30% off eligible solar battery installations. 

If you have an electric vehicle (EV) 

If you have an electric vehicle, you can set it up for ‘scheduled charging’ during the free electricity window. 

According to AGL, most EVs have a battery capacity between 40kWh and 70kWh — 24kWh is enough to charge a basic model half full, giving it at least 120km of drivetime. This will also depend on your EV charger. 

Why the solar sharer isn’t the only way to save money

The SSO scheme is one of many alternatives to the flat rate tariff, from time of use (ToU) to demand tariffs (depending on the state). 

Market offers, which are plans designed with attractive rates, discounts and features, are almost always more competitive. 

Now that the DMO is set to plunge in NSW and QLD, it’s likely that retailers will update their market offers to follow suit. 

The easiest way to save money on energy now is to switch to a cheaper plan and weigh your options based on your electricity usage habits. 

You can use our rates table to compare energy plans and shop around for one that best suits your needs and preferences.