Around 1pm on a clear day last week, the wholesale price in South Australia dropped to minus $60 a megawatt-hour. Not a blip — it sat below zero for the better part of four hours. If you’d asked me a decade ago whether generators would ever pay the grid to take their electricity, I’d have laughed. Now it’s Tuesday.
Negative electricity prices in the middle of the day have gone from curiosity to routine feature of the National Electricity Market, and AEMO’s own market data shows the trend hardening every summer. For households with solar on the roof, and for the installers fitting new systems right now, understanding what’s actually happening — and who’s paying for it — matters more than the glossy payback slide in a sales brochure.
What a negative price actually means on the ground #
Here’s the plain version. Electricity has to be used the instant it’s made — there’s no shelf, no back room to stack it in like tinned tomatoes. When the sun is out across three states at once and every rooftop system and every big solar farm is pushing into the grid at the same time, supply can outrun demand. Someone has to back off. Coal units don’t like being throttled up and down, so instead the market pays anyone willing to shut down or, in some cases, effectively charges generators to keep running. That’s a negative price: the generator is paying to offload power nobody currently wants.
Think of it like a footy carpark on grand final day with three entrances and everyone arriving at 11am sharp. The ground can only hold so many cars. Somebody has to be turned away or paid to park somewhere else — the timing is the whole problem, not the total number of cars over the day.
Why the middle of the day specifically #
Rooftop solar is the biggest single driver. The Clean Energy Regulator’s small-scale technology data has Australia’s rooftop fleet sitting well past 4 million installations nationally, and on a mild sunny weekend day in states like South Australia and Victoria, rooftop solar alone can meet close to all — sometimes momentarily all — of underlying demand. Add utility-scale solar farms exporting into the same window and grid-scale wind running hard, and minimum demand troughs get deeper every year. AEMO has flagged this in its published forecasts for years now: the problem isn’t a shortage of renewable generation, it’s a lack of anything to do with it between about 10am and 3pm.
I’ve written before about why wholesale prices swing so violently across a single day — the pattern is the same mechanism, just at the sharp end. Negative midday prices and the evening price spikes that follow at 6pm are two symptoms of the one underlying issue: the grid has a shape problem, not a volume problem.
Does this actually save households money? #
Here’s where I get sceptical of the way this gets spruiked. A negative wholesale price does not mean your power is free at 1pm, and anyone telling you it does is skipping the middle part of the supply chain. Retailers still charge network tariffs, environmental scheme costs and their own margin, and most residential tariffs in the NEM are flat or time-of-use with a peak window that isn’t midday. A handful of retailers now offer genuine free or negative-priced windows tied to wholesale conditions — Amber Electric’s wholesale pass-through product is the clearest example — but for the bulk of households still on a standard plan, negative wholesale prices mostly show up as lower retail costs at the margin over a full year, not a free lunch on any given Tuesday.
The Australian Energy Regulator’s Default Market Offer, reset annually, still bakes in an assumption of positive wholesale costs averaged across the year. I’ve covered that mechanism before and it’s worth reading if you want to understand why your bill doesn’t track the spot price minute to minute.
What it means for your solar export, right now #
This is the bit installers actually deal with on the switchboard. When wholesale prices go negative, some retailers pass that through to solar exporters via time-varying feed-in tariffs — meaning your export payment can go to zero, or occasionally negative, for the sunniest hours of the day. A few networks have also moved to two-way tariffs where exporting during the solar trough can attract a small charge rather than a credit, while exporting in the evening peak earns more.
Practically, that changes how I’d size a system for a client now versus five years ago. Back then the advice was simple: max out the string, export everything, the feed-in tariff pays for itself. Now I’m telling people to think about what they can use themselves — a pool pump, a hot water diverter, an EV charger timed to run at 1pm — because self-consumption is worth more than a shrinking or occasionally negative export credit. Export limits set by the local network, often 5kW single-phase per household unless you’ve applied for a higher limit or fitted an approved inverter with dynamic export control, are increasingly there to manage exactly this midday glut, not just historical network capacity constraints.
Batteries are the obvious answer, with a catch #
A home battery charging off cheap or negative midday solar and discharging into the evening peak is the neatest fix at household scale, and it’s why the batteries have become the conversation every quote turns into. The federal Cheaper Home Batteries rebate that landed in mid-2025 has pushed uptake hard, and installers I talk to are flat out. But the economics still depend on your retailer’s export tariff structure and whether your inverter and battery combination is on the approved list for your state’s rebate scheme. Get the string sizing wrong, or oversize a battery against a modest evening load, and the payback period stretches out well past what the brochure promised.
At grid scale it’s the same logic playing out with big batteries — I’ve covered how outfits like Akaysha Energy are positioning large-scale storage specifically to arbitrage this midday trough against the evening peak, which is really the same trade as a home battery, just financed by BlackRock instead of a mortgage redraw.
The bigger structural question nobody’s fully answered #
My honestly-held view, and I’ll cop pushback on this: negative pricing is a feature of a grid that’s decarbonising faster than the demand side and the network tariffs have caught up with. It’s not a market failure, it’s a market working exactly as designed — telling everyone, loudly, that the middle of the day is now the cheapest time to run a load and the network needs more flexible demand, not more curtailment of solar farms. The AEMC and AEMO have both flagged demand flexibility and better price signals as the fix, and the Consumer Energy Resources roadmap released for coordinating rooftop solar, batteries and EVs at scale is the policy attempt to actually get there. Whether retailers pass the signal through cleanly to households, rather than just pocketing the spread, is the part I’m watching most closely.
My tomatoes get more predictable sun than the grid does most Februarys — I’ve killed enough seedlings on cloudy runs to know variability is the whole game, not the exception. The grid’s learning that lesson at a much bigger scale, and negative midday prices are just the bill for the learning curve.
For now, if you’re getting solar quoted, ask the installer specifically what your retailer’s feed-in tariff structure looks like in the middle of the day, not just the headline annual figure. And if you’ve had solar for years and haven’t looked at your export tariff since installation, it’s worth a call — the deal you signed up for in 2019 or 2020 almost certainly doesn’t reflect how the market behaves now.
— Priya Nair, Solar & Distributed Energy Correspondent
Photo by Jeroen van de Water on Unsplash