Australia Plans to Mandate Free Power for Some Households in World First

Australia will require power companies to provide free electricity to some households during specific periods each day. This move aims to absorb the excess solar power generation, reduce electricity costs and enhance grid stability.

According to a statement made by Climate and Energy Minister Chris Bowen on Tuesday, the so-called "solar sharing" plan will require retailers to offer at least three hours of free electricity to households during the peak electricity generation period at noon. The plan is scheduled to be launched in July.

Australia has more than 4 million rooftop solar panels, which can generate so much power during the day that wholesale prices drop below zero. The program aims to lower peak demand during the evenings, reducing the need for costly network upgrades and interventions to ensure grid stability, Bowen said.

The offer will initially be available to households with a smart meter in New South Wales, southeast Queensland, and South Australia, and the government will consult with other states to potentially extend the program by 2027. Some utilities including AGL Energy Ltd. already provide free power during the day in some areas.

The initiative follows a A$2.3 billion ($1.5 billion) home battery program that was introduced by the government this year, which seeks to absorb excess renewable energy and curb price swings. The offer cuts upfront costs of installing a household battery, provided it’s connected to solar panels.

Although the reform is aimed at enhancing the stability of the power grid, its purpose also lies in alleviating the pressure on living costs. AGL Company stated in August that this year, an increasing number of Australians have failed to pay their electricity bills on time.