Negative Electricity Prices in Australia: What They Mean for Solar and Battery Owners

Negative electricity prices in Australia are no longer a rare event. In Q4 2025, South Australia saw wholesale electricity prices drop below zero in 48 per cent of all dispatch intervals (AEMO Quarterly Energy Dynamics, Q4 2025). Victoria was close behind at 43 per cent. Across the entire NEM, negative prices hit a record 31 per cent of intervals that quarter, up from just 3.5 per cent in 2020.

For most households on a standard retail plan, none of this matters directly. Your electricity rate stays the same whether wholesale is negative or positive. But if you have solar panels, a home battery or you are considering either, negative prices are reshaping the economics of home energy in ways that affect your payback period, your feed-in tariff and how much a battery is actually worth.

Here is what is happening, why it matters, and what you can do about it. For more on electricity plans designed around these price swings, see our Amber Electric review.

What Are Negative Electricity Prices?

Australia’s wholesale electricity market, the National Electricity Market (NEM), operates as a real-time auction. Every five minutes, generators bid the price at which they are willing to supply power. The Australian Energy Market Operator (AEMO) dispatches the cheapest generators first and sets the wholesale price at the bid of the last generator needed to meet demand.

When supply exceeds demand, generators bid negative prices. They would rather pay to keep running than shut down and face the cost of restarting later. Coal plants are the worst offenders here because their restart costs are enormous. Wind farms with renewable energy certificates to earn also bid negative to stay dispatched.

The result: during the middle of a sunny, mild day, wholesale prices in some states regularly drop to minus $50 to minus $1,000 per megawatt-hour. That translates to minus 5 to minus 100 cents per kilowatt-hour in household terms.

This is not theoretical. AEMO data shows these events have tripled since 2022 across the NEM.

How Often Do Negative Prices Happen by State?

Not every state is affected equally. The frequency depends on renewable generation capacity, local demand, and how well the state is connected to its neighbours.

State	Negative Price Frequency (Q4 2025)	Primary Cause
South Australia	48.4% of intervals	Highest wind and solar penetration, constrained link to VIC
Victoria	43.1% of intervals	Massive rooftop solar growth, wind farms in western VIC
Queensland	30.2% of intervals	Large-scale solar farms in central QLD
NSW	26.7% of intervals	More diverse generation mix, better interconnection

Source: AEMO Quarterly Energy Dynamics, Q4 2025 (record quarter)

Q4 2025 was the record quarter for negative pricing across the NEM. Q1 2026 saw lower numbers (seasonal), but the structural trend is clear: negative pricing grew from 3.5 per cent of NEM-wide intervals in 2020 to 15 per cent in 2024 to 31 per cent in Q4 2025.

South Australia is the most affected because it combines the highest per-capita renewable generation with constrained transmission. Two thirds of SA’s negative pricing events are caused by bottlenecks on the Heywood interconnector, the main link to Victoria. When that link hits capacity, SA’s excess solar and wind has nowhere to go, and prices collapse. During daytime hours (9 am to 5 pm) in Q1 2026, SA still saw negative prices in 60 per cent of intervals (AEMO QED, Q1 2026).

Victoria’s situation worsened through 2025. Rooftop solar sent Victorian wholesale prices to zero or below every single day for two consecutive months during spring 2025 (RenewEconomy). The pattern is spreading east as solar installations keep growing. Australia now has 4.3 million homes with rooftop solar generating 26.8 GW of capacity (Clean Energy Council, 2025).

What Negative Prices Mean for Solar-Only Households

If you have solar panels but no battery, negative wholesale prices are eating into the value of your system in two ways.

Your feed-in tariff is falling. Feed-in tariffs are ultimately tied to wholesale electricity value. As midday wholesale prices crater, retailers offer less for your exports. NSW feed-in tariffs for 2026-27 sit at 3.4 to 6.5 cents per kilowatt-hour during the day, down from 4.8 to 7.3 cents the year before (IPART, May 2026). SA feed-in rates have dropped to 3 to 6 cents. Victoria’s Essential Services Commission estimated the wholesale value of daytime solar exports at negative 2.4 cents per kilowatt-hour, and from July 2025 stopped setting a minimum FiT altogether (ESC Victoria, 2025). Five years ago, many households were earning 12 to 20 cents.

On wholesale plans, you can lose money exporting. If you use Amber Electric’s wholesale pass-through pricing, negative wholesale prices mean you are charged for every kilowatt-hour your panels export during those periods. Amber’s Solar Curtailment feature can automatically throttle your inverter to avoid this. But if you are on a fixed-rate feed-in plan, your rate stays positive regardless of wholesale movements. You just get less of it each year.

The gap between what you earn exporting and what you pay importing has widened dramatically. Exporting solar at 5 cents per kilowatt-hour while buying grid power at 35 cents per kilowatt-hour in the evening means every kilowatt-hour you store instead of export saves you 30 cents.

That gap is why batteries are now paying back faster than at any point in Australia’s solar history.

What Negative Prices Mean for Battery Owners

Negative wholesale prices are a gift for battery owners. The wider the price swing between midday and evening, the more your battery earns.

Here is the basic arbitrage: charge your battery during negative or near-zero pricing windows (typically 10 am to 2 pm), then discharge it during the 5 to 9 pm peak when wholesale prices spike. On Amber Electric, the spread between a negative buy price and a peak sell price can exceed 50 cents per kilowatt-hour on volatile days. Even on calmer days, a 20 to 30 cent spread is common in SA and VIC.

A 10 kWh battery cycling once daily at an average spread of 25 cents saves $912 per year from arbitrage alone. In SA, where spreads average higher, that figure can reach $1,200 to $1,500 per year.

VPP programs amplify this further. Amber SmartShift automates the charge and discharge cycle based on real-time wholesale pricing and is the only VPP that passes the full wholesale value to the household. Traditional VPPs like AGL or Origin typically offer fixed per-kilowatt-hour credits that do not capture the full upside of extreme price spikes.

For an overview of every VPP operating in Australia, see our best VPP plans guide.

The Solar Sharer Offer: Free Midday Power From July 2026

The federal government’s response to the negative pricing problem is the Solar Sharer offer, which took effect on 1 July 2026. Retailers in NSW, South East Queensland and SA must now offer at least one plan that includes three hours of free electricity in the middle of the day, capped at 24 kWh.

The free windows are 11 am to 2 pm in NSW and SEQ, and midday to 3 pm in SA. The logic: shift demand into the hours when wholesale prices are lowest or negative, reducing the oversupply problem.

Participating retailers include Engie, Red Energy, Origin, Dodo, OVO and Sumo. You need a smart meter to access the offer, and you must actively opt in. The free power does not apply to your whole bill, only usage during the window. One caveat: some retailers have offset the free-power discount with higher daily supply charges, with increases of 85 per cent or more reported on some plans (RenewEconomy, July 2026). Compare the total annual cost, not just the free window.

For battery owners, the Solar Sharer window creates an obvious strategy: charge your battery for free during the three-hour block, then use that stored energy during peak pricing. On a standard 13 kWh battery, three hours at 4 to 7 kW charging speed would capture 12 to 21 kWh of free energy per day.

For more on the Solar Sharer offer and whether it suits your setup, see our dedicated guide.

What Solar Households Should Do About Negative Electricity Prices

The strategies depend on whether you have a battery, what plan you are on, and how much solar you generate.

If you have solar only (no battery):

1. Shift loads to midday. Run your dishwasher, washing machine, dryer and pool pump during peak solar hours. Every kilowatt-hour you use directly is worth 30 to 40 cents saved vs buying from the grid at night.

2. Consider the Solar Sharer plan. If you do not have solar but want to benefit from the oversupply, the three-hour free window can save $300 to $600 per year on a typical household bill.

3. Add a battery. The federal Cheaper Home Batteries rebate provides approximately $300 per usable kilowatt-hour as an upfront discount at point of sale (DCCEEW). A 10 kWh battery post-rebate costs roughly $5,200 to $8,300 installed (Clean Energy Council, 2025). With current price spreads, payback is 5 to 7 years in SA and VIC.

4. Check your feed-in tariff. If you are still on a legacy high feed-in tariff, stay on it. If you are on a standard rate below 7 cents, the value of exporting is minimal. Focus on self-consumption.

If you have solar and a battery:

1. Join a VPP. Amber SmartShift, AGL VPP, Origin Loop or Diamond Energy WATTBANK can all automate arbitrage. The right choice depends on your state, battery brand and whether you want wholesale exposure or fixed credits.

2. Set your battery to charge from solar first. This is default behaviour on most systems, but verify it. Every kilowatt-hour charged from your own panels costs you nothing. Exporting it earns 3 to 7 cents. Using it in the evening avoids 30 to 40 cents of grid cost.

3. Enable Solar Curtailment if on Amber. This prevents your system from exporting during negative price windows, protecting you from paying to export.

4. Time your EV charging. If you charge an EV at home, plug in during peak solar or during the Solar Sharer free window. A 7 kW charger running for 3 hours captures 21 kWh of energy, enough for roughly 140 km of driving.

The Bigger Picture: Why Negative Prices Will Keep Growing

Negative pricing events are not going away. They will increase as more solar capacity is installed and before enough battery storage is built to absorb the midday surplus.

AEMO’s 2024 Integrated System Plan projects that by 2030, the NEM will need 46 GW of utility-scale storage and distributed batteries to manage the duck curve. Australia currently has about 5 GW of grid-scale battery capacity and 2.7 GW of residential batteries installed. The gap between where we are and where we need to be means midday oversupply will worsen before it improves.

For homeowners, this is actually an opportunity with a limited window. The bigger the midday-to-evening price spread, the faster a battery pays back. As grid-scale storage catches up and flattens the wholesale curve, the arbitrage opportunity will shrink. The economics favour acting now rather than waiting.

For the latest on battery costs, the federal rebate and payback periods, see our solar battery cost guide and understanding your electricity bill.

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