The Lure of ‘Free’ Power: How It Really Works
Several Australian energy retailers, including AGL, Origin and others, offer plans that provide a window of ‘free’ electricity, typically for three to four hours in the middle of the day. These offers, such as AGL’s Solar Savers, are designed to incentivise households to shift their energy consumption to periods when solar generation is high and wholesale electricity prices are low.
However, this benefit isn’t a simple giveaway. To access these plans, you almost always need a compatible home battery, such as a Tesla Powerwall 3 or SonnenBatterie Evo. By signing up, you are effectively enrolling your battery into the retailer’s Virtual Power Plant (VPP). The retailer gains the ability to control your battery, discharging its stored energy to support the grid during peak demand periods. In exchange for granting this control, they reward you with a daily window of free electricity consumption.
This arrangement means the ‘free’ power is a trade: you give up some of your energy independence for a simplified, predictable benefit. It’s crucial to understand that the electricity used during this window is free, but the rates and charges outside this period are often higher than on standard plans.
The Fine Print: What’s the Catch with Free Power Plans?
Before signing up for a ‘free electricity’ offer in 2026, a close look at the plan’s rates and conditions is essential. The value of the free period can be quickly eroded by higher costs elsewhere in your bill.
Key factors to scrutinise include:
- Higher Daily Supply Charges: These plans often feature a daily supply charge that is 10-20% higher than the benchmark Default Market Offer (DMO). This fixed cost is charged every day, regardless of how much power you use.
- Inflated Usage Rates: The per-kilowatt-hour (kWh) cost of electricity outside the free window is typically higher. If you have significant energy needs in the morning or evening, these elevated peak rates can outweigh the savings from the free period.
- Lower Solar Feed-in Tariffs (FiT): To compensate for the ‘free’ energy, retailers often provide a lower-than-average FiT for the solar power you export to the grid. In 2026, competitive FiTs range from 5-8c/kWh, but these plans may offer as little as 1-3c/kWh.
- Loss of Battery Control: The retailer can discharge your battery to serve the grid, which may not always align with your personal goal of maximising self-consumption. While most VPPs maintain a minimum reserve for blackouts (e.g., 20%), the primary control rests with the retailer.
According to the Australian Energy Regulator (AER), the average residential DMO price for 2026-27 in NSW will fall by 3.4% to 5.0%, setting a clear benchmark against which to compare these specialised offers.
Cost Comparison: Solar Savers vs. Standard Plan in 2026
To determine the real-world value, let’s analyse a typical Sydney household using 20 kWh per day with a 6.6kW solar system and a 13.5kWh Tesla Powerwall 3. We’ll compare AGL’s Solar Savers plan against a standard market offer aligned with the AER’s 2026-27 DMO.
| Feature | AGL Solar Savers (Typical) | Standard Market Offer (DMO Aligned) |
|---|---|---|
| Daily Supply Charge | 125 c/day | 110 c/day |
| Peak Usage Rate (c/kWh) | 48 c/kWh | 38 c/kWh |
| Off-Peak Usage Rate (c/kWh) | 25 c/kWh | 22 c/kWh |
| ‘Free’ Window | 11am - 2pm | N/A |
| Solar Feed-in Tariff (FiT) | 5 c/kWh | 8 c/kWh |
| VPP Participation | Mandatory | Optional (e.g., Origin Loop, Tesla VPP) |
| Estimated Annual Bill* | ~$1,950 | ~$1,800 |
Assumes 30% of daily usage (6 kWh) is shifted to the free window. Bill calculation excludes VPP credits from the standard offer.
As the table shows, a household that can strategically shift significant loads into the free window can make the plan work. However, for many, the higher fixed and variable costs mean a standard plan, potentially combined with a more lucrative VPP, offers greater savings. For a detailed breakdown of system costs, see our guide: [6.6kW Solar & 10kWh Battery Cost Australia 2026: Full Payback Analysis](/articles/6-6kw-solar-10kwh-battery-cost-australia-2026-payback-guide).
Who Is This Plan Best For? (And Who Should Avoid It?)
‘Free power’ plans are not a one-size-fits-all solution. They are best suited for households with specific consumption patterns.
This plan is likely a good fit if you:
- Can shift high-energy tasks: You consistently run appliances like washing machines, dryers, pool pumps, or charge your electric vehicle during the 11am-2pm window. This is especially relevant for EV owners, as detailed in our guide on how to
[Charge Your EV for Under $5: Best Times in Australia 2026 with Solar & Smart Tariffs](/articles/best-time-charge-ev-australia-2026-solar-smart-tariffs). - Value simplicity: You prefer a straightforward ‘set-and-forget’ benefit over actively managing your battery in a more complex VPP that pays variable, market-based rates.
- Have high daytime usage: You work from home or have an electric hot water system timed to heat during the middle of the day.
You should probably avoid this plan if you:
- Have low daytime consumption: Your energy usage is concentrated in the morning and evening peaks, where you’ll be paying higher-than-average rates.
- Want to maximise VPP earnings: Savvy battery owners can often earn more by joining a dedicated VPP that offers higher credits for grid support. Explore your options in our guide to
[Join a VPP in 2026: Earn Up To $1,500 Annually & Boost Grid Stability](/articles/how-to-join-virtual-power-plant-australia-2026-guide). - Prioritise a high solar feed-in tariff: If you have a large solar system and export a significant amount of energy, a plan with a higher FiT will likely be more financially beneficial.
Bottom Line
The ‘3 hours of free electricity’ offer is a compelling marketing proposition that provides real value for a specific type of energy user in 2026. For households that can align their heaviest consumption with the free daily window, particularly for EV charging, the savings can be substantial.
However, it is not a universally superior deal. The ‘free’ electricity is paid for through higher daily supply charges, more expensive peak rates, and lower solar feed-in tariffs. For the average solar and battery owner, a standard competitive market offer combined with a high-performing VPP program will often deliver greater overall financial benefits and more control over your home’s energy assets.