From 1 July 2026, electricity retailers across New South Wales, South East Queensland and South Australia will begin offering new electricity plans that include up to three hours of free electricity during the middle of the day.
The initiative has generated plenty of headlines, with many Australians asking whether it changes the value of investing in solar panels and battery storage.
The short answer is no.
In fact, for many households, quality solar and battery systems remain one of the smartest long-term investments available.
What is the Three Hours of Free Power initiative?
The new initiative requires electricity retailers in participating states to offer at least one residential electricity plan that provides a three-hour window of free daytime electricity, subject to a daily usage cap.
The scheme has been introduced because Australia’s electricity grid now produces enormous amounts of solar energy during the middle of the day. At times, there is actually more renewable energy available than the grid can comfortably use.
Rather than wasting this clean energy, the initiative encourages households to shift more of their electricity consumption into these daylight hours.
Importantly, customers are not forced onto these plans. Retailers simply need to offer them as an option.
Is the electricity really free?
Not exactly.
While electricity used during the designated three-hour window may not incur a usage charge, retailers still need to recover their overall costs.
That generally means higher tariffs at other times of the day, increased supply charges, or higher peak electricity rates.
Like any electricity plan, the overall value depends on your household’s usage patterns and whether the tariff suits your lifestyle.
Who benefits the most?
Households that can shift their energy use into the free period are likely to see the biggest benefit.
This may include:
- Charging an electric vehicle during the middle of the day
- Running pool pumps
- Heating water
- Using washing machines and dryers
- Running dishwashers
- Operating air conditioning while the free period is available
The more energy that can be moved into that window, the greater the potential savings.
Why batteries become even more valuable
One of the biggest winners under this type of tariff structure could actually be battery owners.
A battery allows excess or low-cost daytime energy to be stored and used later in the evening when electricity prices are typically highest.
Instead of paying peak rates after sunset, homeowners can draw from stored energy, reducing their reliance on expensive grid electricity.
Battery storage also provides greater protection against future electricity price increases while offering backup power capabilities during outages when configured appropriately.
Does this reduce the value of solar?
Absolutely not.
There has been some discussion that “free daytime electricity” may discourage people from installing rooftop solar.
However, this overlooks one of solar’s biggest advantages – energy independence.
A household with solar generates its own electricity every day and is not dependent on a retailer’s tariff structure or changing government policies.
Solar owners also have greater flexibility to choose electricity plans that best suit their circumstances, rather than being tied to a single tariff offering.
Solar continues to reduce electricity bills every day of the year while adding long-term value to the home.
Solar and batteries still make financial sense
The Federal Battery Rebate continues to make battery storage more affordable than ever before.
When combined with quality solar panels, battery storage allows households to:
- Reduce electricity bills dramatically
- Store low-cost daytime energy for evening use
- Improve energy independence
- Protect against future power price increases
- Reduce reliance on the grid
- Increase resilience during blackouts
Rather than making batteries less attractive, initiatives such as the Three Hours of Free Power may actually increase the value of intelligent energy management within the home.
Book a free discovery call with the team at RESINC Solar & Batteries to find out how a tailored solar and battery solution could work for your home.