By Adam Domenighini, B.Eng (Hons) – Electrical Engineer at AC Solar Warehouse
With Australia becoming one of the leading nations in rooftop solar uptake, the electricity market has begun to observe low grid consumption periods of the day where electricity wholesale prices are extremely low or even negative.
Consumer’s with smart meters, already have the ability to benefit from these off-peak consumption hours, through the dynamic pricing offered with time of use (TOU) tariffs. The Australian Government plans to take this a step further with the implementation of a new requirement for retailers – the Solar Sharer Offer.
What is the Solar Sharer Offer (SSO)
The current proposed SSO is a requirement for electricity retailers that will be implemented through the Electricity Retail Code and DMO framework requiring retailers to offer a zero-cost energy consumption period for residential customers, with potential exemptions for small retailers.
Retailers will be required to offer a Solar Sharer Offer tariff, providing a minimum 3-hour period of $0/kWh electricity to consumers. This period will align with the time of day where wholesale prices are the lowest, commonly 11am – 2pm.
The offer aims to promote equal access to Australia’s extensive solar generation allowing those without any rooftop solar or batteries to benefit from the free electricity period as well. With a focus on improving the affordability of electricity for all Australians.
Who will have access to it
The current trajectory is for the SSO to become available from July 2026 for households in DMO-regulated states – this consists of NSW, South-East Queensland, and South Australia. With plans to consult other state regulators to make the SSO available nationally. To be eligible to switch to the tariff you will need a smart meter installed – which can be arranged by contacting your retailer.
What are the benefits
The most immediate benefit is the free period itself and how customers can utilise this without any further action. This can be achieved through aligning any manageable household appliances such as EV Charging, hot water system, pool pump etc. to operate during the free period.
A wider benefit that comes from encouraging households to shift their energy consumption to the free period is a lower evening peak demand on the network. This provides overall grid stability, smoothing out the load profile of the network - relieving the need for distribution networks to implement peak-demand driven infrastructure. This will reduce future costs for network investment and minimise the peak electricity demands, ideally reflected in a reduction of peak electricity costs for all Australians.
How can you make the most benefit
Since not everything in your household can be shifted to operate during the free period – nor is it realistic. You can utilise batteries to charge during this free period and discharge during the peak-cost periods. For households with rooftop PV and batteries this provides a reliable way to charge your batteries – especially on bad weather days. Further, this introduces the opportunity for households without rooftop solar to start considering installing batteries to benefit from the abundance of rooftop solar in Australia.
The optimal battery setup
When sizing the optimal battery setup there are a few considerations. If you currently have no rooftop solar or batteries, to make the most of the SSO free period you would size the battery capacity to your average daily usage with an inverter sufficient to charge the batteries within the free electricity period and with an output to meet the peak demand of your home. If you currently have rooftop solar, sizing the optimal battery system will require a greater analysis of your household consumption throughout the day.
For example, a household without any solar or batteries with an average power consumption of 24 kWh/day (high, 4-5+ person household) wanting to fully utilise the SSO free period (assuming 3 hours). The energy storage system must be capable of delivering 24kWh of energy to the household and be charged within the limited time window. An important factor in sizing these systems is the round-trip efficiency (RTE) of your energy storage system, modern Lithium-ion energy storage systems RTE’s can range from 80-95%. Consequently, to achieve a true 24kWh of energy delivery to your household your battery capacity and inverter output will have to compensate for this RTE. Sizing an energy storage system for 24kWh/day with a 90% RTE would require a battery capacity of 27kWh and an inverter charging capacity of at least 9kW. Sizing the battery must consider the RTE of your energy storage system, while the inverter must consider two factors: the duration of the charging window and the round-trip efficiency (RTE). To elaborate, If the free period window were for 5 hours, a system with a 5kW charging capacity would be sufficient to fully charge ~22kWh of batteries, but a system with a 5kW charging capacity for a 3-hour free charging window would only ever achieve ~13kWh of the battery charge.
For a 4-5+ person household their consumption during peak tariffs is around 10kW – supplied from the grid at $0.29/kW this alone would cost them $1,050 on their electricity bill per year on a flat rate tariff. Installing a suitable, competitively priced, popular battery system and charging it during the free period would save the entire $1,050 per year and pay the system off within a few years, along with savings from lower shoulder rates.
How does this affect your Batteries ROI?
The SSO introduces significant potential savings for battery owners and those looking to install a new battery energy storage system. The savings presented by the benefits of the SSO alone can reduce the payback period of battery systems by up to 2 years.
Concerns
If you are considering installing a battery energy storage system with the intention of utilising the SSO it should be noted that this carries its own risks. The SSO tariff will follow a price model similar to existing TOU tariffs – for which the peak usage rates are around ~$0.60 per kWh. In the event of a fault in the energy storage system resulting in the household being supplied from the grid during those peak rate hours can impose significant costs above current flat rate tariffs. For this reason, it is important to consider higher quality battery and inverter energy storage systems. As cheaper batteries are commonly more prone to faults, feature lower round-trip efficiencies and shorter life spans.
The SSO will be a new tariff offered to residential customers – therefore it can’t be assumed that the daily supply charge and rates for existing TOU tariffs will be the same for the SSO tariff. While the Australian Energy Regulator ensures that customers will get a fair deal outside of the free power period, until further details are released the exact savings and how it will accelerate the payback period of batteries beyond the savings already available cannot be determined. This may also mean for households that already have sufficient rooftop solar and battery systems looking to use the SSO tariff for supplementary charging may not see any benefits cost wise over currently offered TOU tariffs.
Source Material & Technical Papers:
Examples for Understanding the Optimal Battery Setup
Please note: These scenarios are simplified examples for illustrative purposes only to demonstrate how battery sizing and inverter capacity relate to the SSO free period and tariff structures. Actual optimal setups will vary based on individual household energy profiles, specific equipment specs, and local market prices.
Feature | Example 1: No Existing Solar/Battery, High Consumption | Example 2: Existing Flat Rate Tariff, High Consumption |
Household Type | 4-5+ Person Household | 2+ Person Household |
Average Daily Usage | 24 kWh/day | Varied |
Goal | Fully utilise the 3-hour SSO free period for 24h usage | Minimise costs by covering peak consumption hours |
Recommended Battery Capacity | 27 kWh (Sized to match daily usage with RTE considerations) | Sized for peak hours - roughly 40-50% of average daily usage (e.g., 12 kWh for peak window) |
Recommended Inverter Output | 9 kW (Required to store sufficient energy within 3-hour window compensating for RTE) | Sized by battery capacity divided by number of free hours. (e.g., for 3 free hours with a 12kWh battery, Inverter would require minimum 4kW output) |
Why this setup? | The 9kW inverter output is crucial to store sufficient energy within the limited 3-hour free window. The usable energy stored within the 3-hour window is equal to the inverter output * RTE * 3. | The primary focus is covering the high-cost peak consumption (~10kWh). Charging this amount during the free period eliminates the peak grid cost. Enabling massive savings on a Time-of-use (TOU) tariff. |
Potential Savings Impact | Maximises use of free electricity for the entire day's consumption. | Can eliminate approx. $1,050/year in peak period costs (10kW @ ~$0.29/kW on flat rate), leading to a system payback within a few years. |