Tariff Caps & “Free Solar Power” Offers: What Businesses Need to Know 

There’s been increasing media buzz around “free electricity in the middle of the day” and new proposals to change how energy prices are regulated in Australia. While much of the conversation is geared toward households, these developments reflect broader structural shifts in energy generation, pricing, and market behaviour — and businesses will inevitably feel the ripple effects. 

At Leading Edge Energy, we closely monitor regulatory changes so our commercial clients can anticipate market shifts, optimise contract timing, and stay ahead of rising volatility.

What’s Changing in the Energy Market

1. AER proposal: Moving from a single price cap to tariff-based caps 

The Australian Energy Regulator (AER) has proposed transitioning the Default Market Offer (DMO) away from a flat annual cap toward tariff-specific caps. 

This reform would: 

• Separate fixed daily supply charges from variable usage charges 

• Allow more accurate price signals based on how and when energy is consumed 

• Encourage households and businesses to shift usage to periods of lower demand or higher renewable output 

This marks a significant shift toward more dynamic, consumption-aligned pricing. 

2. The “Solar Sharer” initiative: Midday “free electricity” offers 

The Federal Government has also introduced a proposal — known as the Solar Sharer initiative — championed by Minister Chris Bowen. 

Under this plan, electricity retailers in Queensland, South Australia, and New South Wales would be required to offer three hours of free electricity in the middle of the day. 

The goal is to: 

• Soak up surplus rooftop solar generation 

• Shift household consumption into the solar-rich midday window 

• Reduce evening and late-afternoon demand peaks 

Although this policy targets households, it reflects an evolving energy market incentivising flexibility and smarter load shifting.

What This Means for Businesses

These changes hint at a longer-term transition in how energy will be priced and consumed — and businesses need to stay ahead. 

Even if these reforms currently apply to households, they reveal trends that will impact business energy contracts over time. 

Key Considerations for Business Operators 

✔ Understand your usage profile 
As pricing becomes more time-sensitive, knowing when your business consumes energy is critical. 

✔ Review both network and retail tariffs regularly 
Tariff reforms and shifting wholesale dynamics make it essential to stay on competitive rates. 

✔ Prepare for continued market volatility 
As renewable generation grows, pricing structures will evolve to better align with supply and demand patterns. 

✔ Anticipate future contract changes 
Retailers may increasingly introduce midday incentives, time-flexible pricing models, and tariff innovation. 

Staying proactive — not reactive — can make a meaningful difference to long-term cost control.

How Leading Edge Energy Can Help

Our team continually tracks regulatory, policy, and wholesale market movements to ensure your energy strategy remains competitive and future-focused. 

We can help you: 

• Analyse your current contract and load profile 

• Identify opportunities to reduce costs under emerging tariff structures 

• Evaluate whether your usage aligns with upcoming pricing reforms 

• Plan ahead to mitigate risk from market volatility

Many businesses have not reviewed their energy setup in years — and with the market shifting rapidly, now is the ideal time to reassess.

Book Your Free Energy Health Check Today

Get clarity on how tariff caps, free solar power initiatives, and broader market reforms may affect your future costs. 
We’ll analyse your usage, review your contract, and help you stay ahead of change.