Victorian Midday Power Saver Offers Households Free Electricity Savings

The Victorian Labor government has clarified important aspects of its Midday Power Saver initiative, stating that the free electricity window will span from 11am to 2pm. This announcement comes alongside updated estimates of potential savings for consumers, following recent reductions to default electricity prices.

Back in March, Victoria had revealed its adaptation of the federal Labor’s Solar Sharer scheme, which will be available to residential customers via the Victorian Default Offer (VDO) starting on 1 October this year, just a couple of months ahead of the state elections.

Key Details of the Free Power Plan

This week, State Energy and Climate Minister Lily D’Ambrosio confirmed pivotal details of the free power plan, indicating that households that opt into the scheme could potentially decrease their energy bills by between $149 and $1,102 annually, depending on how effectively they shift their consumption to the midday hours.

The federal Solar Sharer was introduced last November as part of reforms to the Default Market Offer (DMO) and mandates that electricity providers grant free power for a minimum of three hours daily in DMO states, excluding Victoria. This initiative is set to commence on 1 July.

For the Solar Sharer programme, the free usage slots will be 11am to 2pm in NSW and South East Queensland and from 12pm to 3pm in South Australia, remaining unchanged during daylight savings.

Aiming to Reduce Energy Inequity

The rationale behind both free power initiatives is to address energy inequality by extending the benefits of rooftop solar to those unable to adopt it for various reasons. Furthermore, the plan seeks to incentivise households to alter their energy usage patterns towards midday to better utilise the surplus solar energy that regularly saturates the grid.

Additionally, it aims to reshape the political dialogue related to the transition to green energy, ensuring that the advantages are distributed more equitably.

The Australian Energy Regulator (AER), responsible for overseeing the DMO, reminded consumers this week that, starting in July, retailers must provide a default Solar Sharer Offer as an “opt-in energy plan” for customers with smart meters, rather than only for those within the DMO.

Opportunity for Savings

“The new Solar Sharer Offer presents a chance for households to cut costs by shifting some energy usage, such as running washing machines or charging electric vehicles, to midday,” AER chair Clare Savage commented on Tuesday.

She encouraged consumers to consult their retailers regarding how this new option functions, as it could significantly transform how they manage their electricity expenses.

Savage added that incorporating the Solar Sharer Offer into the DMO ensures that it is regulated, giving consumers confidence that they won’t face overcharges during non-free power hours.

The AER also pointed out that retailers must inform customers that the Solar Sharer may not suit everyone, and an opt-in agreement is necessary to switch to this scheme.

Price Adjustments for Electricity

Both the AER and Victoria’s Essential Services Commission (ESC) released their final determinations this week regarding default pricing for the various states and distribution networks, confirming price reductions generally, with the exception of South Australia.

In the DMO regions, the AER reported that the residential flat-rate standing offer would drop by between 3.4% and 5% in New South Wales and by 7.2% in South East Queensland compared to the previous year.

Conversely, South Australia is expected to see a slight increase in bills of 1.4% (about $33). However, customers on time-of-use plans will experience minor decreases, with residential rates falling by 1.1% ($25) and small business rates declining significantly by 12.1% ($673).

For Victorian customers, the ESC determined reductions for those on the VDO that range from a decrease of around $160 for AusNet users to $50 for those with United Energy, leading to an average drop of approximately 5% year-on-year.

Comparative Savings for Victorians

Small business annual prices on the VDO will fall by amounts between $502 (AusNet) and $151 (Powercor), translating to an average decrease of 6% compared to the last year, the ESC stated.

In a statement on Thursday, Minister D’Ambrosio highlighted that VDO customers enjoy better pricing than those in other states under the average DMO, indicating that the 2026–27 VDO would deliver savings of $444 for households and $1,299 for small businesses.

She asserted that the Midday Power Saver represents the most substantial offer in the nation, with all 2.6 million households fitted with smart meters in Victoria eligible, outpacing the 2.4 million combined in other states.

“Three hours of free energy daily will alleviate financial pressures on household bills, and lower prices outside those hours will enhance savings,” D’Ambrosio remarked.

“Victorians will experience the most advantageous free power arrangement in the country.”

Considerations and Customer Guidance

There are important caveats regarding the Victorian Midday Power Saver scheme; this includes notably that “electricity costs outside these hours may be somewhat elevated,” and actual savings will hinge on the customer’s ability to reduce use during peak hours in favour of the midday period.

Customers interested in joining the Midday Power Saver initiative are encouraged to contact their electricity retailer come October to ascertain if this offer aligns with their needs. These discussions will require retailers to:

• Advise customers about alternative plans that might be better suited based on relevant information about energy usage.
• Inform customers that the Midday Power Saver may not be ideal for all and is best for individuals who can shift their electricity use.
• Detail the financial impact of the new tariff structure, including estimates of possible costs.

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