There’s been a bit of talk in the press lately about whether or not the Solar Sharer Offer (SSO) is a good deal for consumers. For the most part, concerns have centred around higher charges outside of the “free” window in the middle of the day, and whether that was a fair outcome given the abundance of excess solar when the sun is shining.
The questions around whether the SSO is benefiting consumers are not unreasonable. In announcing the offer in November 2025, the Government stated that “a new regulated electricity offer, Solar Sharer, will be introduced next year through the Default Market Offer (DMO), requiring retailers to offer free electricity to households for at least three hours in the middle of the day when solar generation is at its peak.”
But the SSO is an offer that competes not only with the regulated DMO, but needs to be compared against often cheaper market offers. The impact is a more complex decision for customers, with households needing to shift a material portion of their usage from the peak to free windows to benefit against the cheapest offers in the market.
So what does the Solar Sharer Offer (SSO) look like now that it has been introduced in NSW, South Australia, and South-East Queensland? Are customers opting into the offer? We take a look.
How does the Solar Sharer Offer work in practice?
Back in November, I wrote about the SSO and highlighted the not insignificant costs that a retailer would incur, should they be required to provide free electricity in the middle of the day to all customers year round. It is true that when the sun is shining there are increasingly long periods in the middle of the day when the spot price hovers around $0. But there are many periods (particularly still, cloudy days in winter) when retailers are required to pay a spot price that is materially higher. Retailers also incur network costs during the free period, with only Energex in South-East Queensland offering a tariff at virtually no cost to retailers in the middle of the day.
In designing the SSO the federal government tasked the Australian Energy Regulator (AER) with setting the price, balancing the new offer against the cost of the DMO. But the introduction of the SSO was not the only change to the DMO this year. The Government changed the Electricity Industry Code regulations in March, requiring the AER to change its approach to setting the standard DMO tariff. The AER was tasked with setting a specific tariff, rather than allowing retailers to set their own tariff structures underneath an annual price cap.
As a result, the AER set a higher daily fixed charge and lower variable rate than those adopted by many retailers under the DMO in previous years. Importantly, the changed regulations means retailers are unable to deviate from the regulated tariff structure.
The DMO has never been intended to be the cheapest offer in the market. Its objective is to provide a fair, trusted, and reasonably priced electricity option that reflects the costs of supplying customers with an essential service. Even with changes this year to reduce retailer margins and lower the overall DMO, it is not one of the cheaper retail offerings available to those who shop around.
As noted above, the SSO is priced against the DMO, not market offers. As such, it too includes a higher daily fixed charge than is found in many market offers. The tariff the AER sets also, necessarily, includes higher variable charges in peak periods to offset the costs retailers incur in delivering power during the free window. Again, this is the design of the offer – to encourage customers to shift load from more expensive periods where the grid is congested and electricity often more expensive, into periods where energy is abundant.
Whilst this has been pitched by some as retailers choosing to profiteer on the offer, it is a decision of the AER, based on a requirement by government, to price the offer as such. As a regulated tariff, retailers are required to offer it to customers.
So who is the SSO benefiting today?
The AEC has undertaken some informal analysis of the SSO, and found that about 10,000 customers across NSW, South Australia, and South-East Queensland have opted into the offer. Most of these customers switched to the new tariff in July, with customers opting in at a much slower rate in August and the first weeks of September.
Many of these customers have solar and battery systems at home, with the ‘free’ window allowing them to ensure their battery is topped up for use in the higher priced evening peaks. This is a positive thing for the system, and as described by the government when the offer was announced, if enough customers can shift their load away from the evening peaks, the costs for all consumers should reduce.
Interestingly, some retailers are finding that it’s not only battery customers who are opting into the offer. The benefits for customers without Consumer Energy Resources at home will be dependent on their ability to shift enough load from the more expensive evening peaks into the free window to offset the higher usage rate, and often higher daily fixed charge, of the SSO as compared to other market offers.
The AER noted in its final decision on the DMO in May that the SSO was priced so that a customer with an average usage profile customer would see identical bill outcomes irrespective of whether they were on a standard DMO or the SSO. Compared to the DMO, if a customer on the SSO could shift one kWh from the peak to the free window they would come out on top.
But market offers are often below the DMO, so customers who are shopping around are better off comparing the SSO with all offers from retailers if they want to save money. The outcome here is that customers will need to shift more load to benefit from the SSO.
Some retailers are tracking customer outcomes for customers who have made the switch, with about half of customers who switch to the SSO better off than they would have been on the retailers’ best offer.
Anecdotal evidence from all retailers is that customers are interested in the idea of ‘free power’ in the middle of the day, but ensuring customers are aware of the pros and cons of the offer to make an informed choice can be a tricky customer service call. Call times are longer than other interactions, and retailers are finding the complexity of the bill comparison is turning some customers off.
So what have we learnt?
The AEC has long argued that standardised, regulated offers should be limited to supporting customers who are unable to engage in the market and make choices to opt into a market offer better suited to their needs. The original DMO acted as a backstop rather than an offer that a customer would want to opt in to, and as a result, most customers remain on market offers, often to their benefit.
But the SSO requires customers to actively choose the new tariff structure and price, and unless they are a large user, many customers have found their existing market offer delivers cheaper overall bills, even factoring in the free window in the middle of the day.
It’s important to note that some retailers were already offering versions of the SSO to their customers prior to the regulated offer coming into place. These offers, such as GloBird’s “FOUR4FREE” and OVO Energy’s “Free 4” remain popular options for customers looking to benefit from shifting their load. Red Energy has recently announced its own “Red Power 5” offer to its customers.
For governments, it will be important that the SSO, and the soon to be available Midday Power Saver in Victoria, is not pitched to consumers as a solution to energy affordability for many, but rather, highlighted as an opportunity for those most able to shift load to participate in the transition.
Complementary messaging encouraging customers to use the opportunity to shop around and find a market offer that will deliver the lowest possible bill will also help increase trust in the market. Messaging that infers retailers cannot be trusted or that only governments can regulate good offers is not borne out by evidence, and is likely to see more and more customers paying more than they need to for energy.
Improving the SSO?
It could be said that the SSO is working as intended. Electricity delivered in the middle of the day is not free, but it is often plentiful, so encouraging usage when the sun is shining and minimum system load remains a problem is a good thing, and a great option for those with large shiftable loads.
Other complementary reforms could also increase the opportunity for retailers to develop market offers that deliver the same benefit on a much larger scale. The AEC continues to call for changes to the network regulatory regime to require network businesses to reduce barriers that inhibit retailers’ ability to share the value of shifting load with their customers. Whilst the AEMC has kicked off its longer-term Electricity Network Regulation Review which will consider these questions, an interim mechanism might look to reduce network costs during the middle of the day to close to zero, aligning lower price periods to those where solar is prevalent.
There is also a need for more consumer education about changing tariff structures, and the impact on overall bills. While most of the media attention around price changes this year focused on higher daily fixed charges, there was little about reductions in the variable electricity component of bills. With more and more solar and wind coming into the grid, there will be long periods of the day where electricity is abundant, and there is an opportunity for electrifying customers to leverage well designed tariffs to use electricity when its cheap and reduce their overall costs.
But these well-designed tariffs can only come from retailers incentivised to develop tariffs that align with the needs of their customers. Retailers are exposed to the cost drivers of the system, and understand the usage profiles and engagement characteristics of their customers. Allowing retailers the opportunity to work with their customers to develop products that benefit them will deliver system benefits, and support affordability for those able to participate.
Governments and regulators should focus on setting minimum protections for customers, not trying to replicate the role of a competitive market. When regulated offers such as the SSO go beyond that purpose, there is a risk of reducing customer choice and value.
As the system continues to transform, and opportunities for consumers to participate and benefit increase, there will be calls for governments across the political spectrum to do more. While it is early days, it’s looking like the lesson from Solar Sharer is that we should leave it to retailers to develop customer facing offerings, and focus collective efforts on reducing cost pressures in the system, and enabling opportunities for the value of participation to be shared with consumers, with regulation acting as a backstop, supporting those who need it.
