In Australia, they provide free electricity because solar energy has gone from being the promise of the future to a present-day problem. There is so much sun, and so many panels, that the electric grid is faltering due to excess production.
During the middle hours of the day, millions of rooftops return electricity to the system, generating more energy than the grid can absorb without losing stability. At that moment, wholesale prices drop to zero and even to negative values.
The solution found by the Australian government is as simple as it is disruptive: free electricity for three hours a day.
The challenge of excess: free electricity
Australia has been living its particular energy paradox for years: the transition to renewables has advanced so quickly that the system is beginning to suffer its consequences. More than four million homes—one in three—have solar panels on their roofs. This distributed generation already produces more electricity than all the coal plants still active.
According to Reuters, the program, named “Solar Sharer“, will allow millions of households to access three hours of free electricity daily, even those without solar panels. “People who can shift their electricity consumption to the zero-cost period will benefit directly, whether they have solar panels or not, and whether they are owners or tenants,” explained the Minister of Energy, Chris Bowen.
Energy for all
The plan is not optional for electric companies: the Australian Government will require them to offer three hours of free electricity each day during the midday solar peak. The measure will start in 2026 in New South Wales, South Australia, and southeastern Queensland, and will be extended to the rest of the country if it works as expected.
To make it possible, the Executive will modify the Default Market Offer (DMO), the reference rate that limits what retailers can charge. From now on, that rate will include a daily zero-cost period, just when the grid is saturated with solar energy.
Households participating will need to have a smart meter and reorganize their consumption: doing laundry, charging the car, or turning on the air conditioning when the sun is at its peak.
A dual objective. On one hand, it seeks to relieve pressure on the grid and reduce emissions. According to Financial Times, the plan aims to use the excess solar capacity and rebalance the electric grid to reduce dependence on coal and gas.
Tim Buckley, director of the Climate Energy Finance study center, called it an “obvious” measure, as it will create a “demand group” during the middle hours of the day, helping to stabilize the system.
The Australian Government has long been committed to accelerating the energy transition. In 2022, Bowen set the goal of having 82% of electricity come from renewable sources by 2030, as detailed by Reuters. Initiatives like the Solar Sharer are added to the subsidy of domestic batteries, which will allow storing part of that free energy for nighttime use.
Not everyone is happy. From the Australian Energy Council (AEC), the consortium that brings together the main electric companies, they criticized the Government for not consulting the sector before the announcement. Its executive director, Louise Kinnear, warned that “the lack of consultation risks damaging the sector’s confidence and generating unintended consequences“.
Moreover, some companies fear that the plan will increase grid costs and force smaller retailers to leave the market. According to FT, the industry fears that the measure will distort competition, although supporters of the plan argue that the real risk is not acting in the face of a saturated grid.
Despite this, major players like AGL Energy and Ovo Energy have shown willingness to collaborate with the Government to define the technical details.
From Australia to Spain. The Australian proposal has sparked interest in other sunny countries, especially in southern Europe, where solar energy has also grown explosively. Hence the inevitable question arises: can we replicate it in Spain? Being one of the largest photovoltaic powers in Europe and with episodes of negative prices in the electric market, it is logical to consider this possibility.
However, the Spanish electric system is going through a phase of instability: while the southern peninsula produces more solar energy than it consumes, the north still depends on gas plants, the only ones capable of providing the necessary “inertia” to stabilize the grid.
Although the hourly tariff system and smart meters would technically allow replicating the Australian measure, the European framework prevents offering free electricity directly. The price is set in the wholesale market, managed by OMIE, and the State cannot intervene except through subsidies or discounts.
In summary: Spain has the sun and the technology, but not the regulatory flexibility. As analyst Joaquín Coronado pointed out, “we have the generation of the future, but we are still using the crutches of the past”.
The global experiment. Giving away electricity to avoid a grid collapse may seem contradictory, but it holds a lesson about the energy transition: the problem of the 21st century will not be producing energy, but managing it.
While Europe debates how to lower the bill, Australia has opted to share its excess. If the plan works, it could become a reference for other countries with strong solar penetration, like Spain or Italy.
In the words of Minister Chris Bowen, “the more people take advantage of the offer and shift their consumption, the greater the benefits for everyone”. Perhaps the future of energy is not just about paying less, but about using electricity when the sun gives it for free.
