Title: Australia's "Free" Solar Power: A Numbers Game That Doesn't Quite Add Up
The Australian government is promising households in New South Wales, south-east Queensland, and South Australia at least three hours of free solar power a day starting next July. The "Solar Sharer" scheme, as it's being called, aims to distribute the benefits of abundant midday solar energy, even to those without rooftop solar panels. Climate Change and Energy Minister Chris Bowen is touting it as proof that "what's good for the planet is good for your pocket." But let's run the numbers, shall we?
The Devil is in the Default Market Offer
The scheme hinges on a change to the Default Market Offer (DMO), which sets the maximum electricity price retailers can charge. The idea is that retailers will offer free power during peak solar generation hours. The government believes this can shift demand away from peak evening hours, reducing overall electricity costs and minimizing the need for expensive grid upgrades. Sounds good on paper, right?
The problem is, retailers aren't charities. If they're forced to give away power for three hours, they'll recoup those costs somewhere. Nationals senator Matt Canavan hit the nail on the head when he said, "We're not getting free power, we're getting more expensive power. Because if they have to give you free power at some parts of the day, they're going to make you pay more at other parts of the day."
The Australian Energy Council is already expressing concerns about the lack of consultation, warning of "unintended consequences" and businesses potentially "exiting a market." That's not exactly a ringing endorsement.
Shifting the Peak, Not Eliminating It
The core argument is that shifting demand to midday will lower overall costs. But will it? While Australia has over 4 million solar systems installed (a significant number, no doubt), shifting usage patterns isn't as simple as flicking a switch. People still need power in the evenings for cooking, lighting, and entertainment.
Even with smart meters and scheduled appliances, it's unlikely that households can drastically alter their energy consumption. Sure, you can run your washing machine or charge your EV during the free period. But what about heating in winter or air conditioning on a sweltering summer day? Those needs are less flexible.
The government hopes that enough people will shift their usage to create "system benefits that lower costs for all electricity users." But that's a big assumption. And it relies on a level of behavioral change that might be overly optimistic. We also don’t know how many households will actually opt in for the Solar Sharer program.
The "Free" Catch
The biggest catch is that this "free" power isn't truly free. It's subsidized. As Maureen Willis, the Ohio Consumers’ Counsel, pointed out regarding a similar community energy proposal, subscribers would get credits based on the full retail price of electricity, including generation and transmission. That's more than the actual power generated, "essentially creating a subsidy paid by customers who don’t participate." A way for renters to go solar? Ohio bill would launch community energy projects
In other words, those who don't or can't shift their usage will be footing the bill for those who do. It's a redistribution of wealth, disguised as an environmental initiative. And that's where I find the largest discrepancy. Bowen claims this helps everyone, but that's not accurate.
A Zero-Sum Game, at Best
The Albanese government is under pressure to address rising electricity prices, which have increased by as much as 9.7% in some areas (that's the increase on the Default Market Offer, depending on location). This "Solar Sharer" scheme feels like a politically motivated quick fix, rather than a genuine solution. It's a shell game with energy prices. The total wholesale energy costs were negative in every state except Tasmania due to solar generation. This is the data that Bowen is using to push the Solar Sharer scheme.
It might provide some short-term relief for certain households. But it's unlikely to have a significant impact on overall electricity costs. And it could create unintended consequences that harm the energy market in the long run. Plus, there’s no guarantee that the Australian Energy Regulator will ensure households “get a fair deal” outside the free power period.
Smoke and Mirrors
This is not to say that renewable energy is bad (it's not) or that solar power has no value (it does). But this particular scheme feels like a marketing ploy, designed to deflect criticism and score political points. The reality is, electricity pricing is complex. And there are no easy, "free" solutions.
A Pretty Package, Empty Inside
Australia's solar scheme is a classic example of politicians promising the moon while delivering a pebble. The numbers just don't support the hype.
