What actually changed
Australia's middle-of-the-day electricity has been dirt cheap for years, because that is when millions of rooftop solar systems flood the grid. The wholesale price crashes every sunny midday. Until now, that cheapness mostly never reached your bill.
From 1 July 2026, under the "Solar Sharer" rules, electricity retailers in NSW must offer households at least three hours of free electricity every day, between 11am and 2pm. You need a smart meter, and you need to opt in with your retailer. There is a generous daily cap (24 kWh, far more than hot water needs).
Why hot water is the perfect fit
Most appliances are hard to shift into a midday window. You cook dinner at dinner time. But a hot water tank does not care when it heats, it just needs to be full of hot water by the evening. That makes it the one big load almost any household can move.
A heat pump hot water system for a family of 3-4 needs roughly 2.5-3 kWh of electricity a day (it moves heat from the air instead of generating it, which is why the number is so small). On a timer set to run 11am-2pm, that entire load fits inside the free window with room to spare.
Run the numbers: a typical family currently paying $783-1,178 a year to heat water with an electric tank or gas could see the running cost fall to close to zero inside the free window. The system itself still costs money to buy and install (after rebates, typically $1,000-4,000 depending on the tier), so the honest question is payback, and that is what our calculator is for.
You do not need solar panels for this
This is the part most people miss. The free window comes from everyone else's solar, shared through the grid. Renters with a smart meter, apartment dwellers, shaded roofs: the 11am-2pm window works the same. A heat pump plus a $0 timer setting is the cheapest way into it.
If you do have your own solar, you can choose either path: soak your own export (worth only 3-5.5 cents if sold to the grid) or use the free window. Both land in the same place: hot water that costs almost nothing to run.
The honest caveats
- You must opt in. No retailer will move you automatically. Call yours or check their site for the free daytime plan.
- Some free-window plans carry higher supply charges or rates outside the window. Compare the whole plan, not the headline. If the rest of the plan is bad, the free hours can cost you more overall.
- You need a smart meter. Most NSW homes have one by now; if not, your retailer arranges it.
- The timer matters. A heat pump left on its default setting heats whenever the tank drops. Ask the installer to set the timer to the free window, it takes minutes.