Victorian households will be offered up to three hours of free daytime electricity from October under a state government plan aimed at easing cost-of-living pressures and reshaping energy use patterns.
The scheme is expected to deliver savings of up to $300 a year for the average family by providing free power during off-peak daytime hours, seven days a week. Households will need to opt in through their energy retailer, with around 2.6 million homes eligible.
The initiative is designed to encourage consumers to shift energy use—such as running washing machines and dishwashers—into the middle of the day, when solar generation is at its highest and demand is typically lower.
Retailers will be required to offer a discounted daytime tariff, with the exact free electricity window to be confirmed in May ahead of a planned October 1 launch.
The policy also aligns with the government’s broader push to support flexible work arrangements.
“It’s another reason why working from home can save you time and money,” Premier Jacinta Allan said.
The plan has drawn mixed reactions from the energy sector and policy experts, who warn the headline savings may be offset elsewhere on household bills.
Electricity retailers say there are hidden costs in the federal scheme that will need to be recovered from customers.
Tony Wood, senior fellow of the energy program at Grattan Institute, says the scheme in principle sounded sensible given the oversupply of rooftop solar power during the day.
However, it was unclear whether network charges – which make up 30 to 40 per cent of a household power bill – would be waived or whether retailers will need to recoup it from households during other times of the day.
“If you think about the bill you pay, it includes the cost of the actual electricity itself, it includes the cost of transporting that electricity through poles and wires, and it includes things like retail,” said Wood.
“If you’re going to provide free electricity, it means the network component and the other retail component are going to have to be recovered at other times of the day and add to other network charges during the rest of the day.” he said.
Further uncertainty surrounds how the policy will be implemented within existing pricing frameworks.
While details of the so-called Solar Sharer scheme emerged alongside the Australian Energy Regulator’s draft Default Market Offer, Victoria’s Essential Services Commission has not yet incorporated a zero-cost daytime tariff into its pricing determinations.
The timing of the announcement—months out from a state election—has also raised political questions.
Wood also noted that with Victorians heading to the polls in November, it would have been difficult for the Allan government not to respond to similar proposals emerging elsewhere.
Energy companies have also flagged operational concerns. In a submission to the Essential Services Commission, AGL argued that mandating a fixed free electricity window could create unintended consequences by concentrating demand into a narrow period.
“By design, a fixed three-hour free window moves a large share of discretionary electricity usage into the same time interval,” AGL said.
Social policy advocates have cautiously welcomed the initiative but warned it may disproportionately benefit higher-income households.
According to the Victorian Council of Social Services many lower-income families may struggle to shift energy usage away from peak evening periods, limiting their ability to take advantage of the scheme.
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