Australia mandates free power in world first to soak up solar, reduce living costs

[SYDNEY] Australia will mandate utilities to provide free power to some households during parts of the day in a bid to soak up excess solar generation, reduce power bills and improve grid stability.

The so-called Solar Sharer programme will require retailers to offer free power to households for at least three hours in the middle of the day when generation is at its peak, according to a statement from Climate and Energy Minister Chris Bowen on Tuesday (Nov 4). The initiative is scheduled to start in July.

Australia has more than four million rooftop solar panels, which can generate so much power during the day that wholesale prices drop below zero. The programme 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 metre in New South Wales, southeast Queensland, and South Australia, and the government will consult with other states to potentially extend the programme by 2027. Some utilities including AGL Energy already provide free power during the day in some areas.

The initiative follows a A$2.3 billion (S$1.9 billion) home battery programme 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.

While reforms seek to improve grid stability, they are also designed to address cost-of-living pressures. More Australian have fallen behind on their power bills this year, AGL said in August. BLOOMBERG