The Evening Peak Trap: Why Cheap Daytime Solar Isn't Fixing Your Power Bill

A thread on r/australia recently pulled in nearly 300 upvotes and 78 comments asking the question that's been eating at half the country: “Daytime power prices have never been lower. So why are bills rising?”

The frustration is real. You see the headlines about solar smashing records, wholesale prices going negative at lunch, and then you open your electricity bill and it's somehow higher than last quarter.

But the answer isn't that solar has failed or that the system is broken. The answer is simpler and more frustrating: your bill isn't set by what electricity costs at midday. It's set by what it costs at dinner.

And at dinner, gas runs the show.

Most Australians have no idea how electricity pricing actually works. That's not a dig, why would you? You flip the switch, the light comes on, you get a bill. But once you understand the mechanism, the “cheap solar, expensive bill” contradiction makes perfect sense.

The National Electricity Market (NEM) is managed by AEMO, and it works like a rolling auction. Every five minutes, AEMO figures out how much electricity the grid needs. Generators (solar farms, wind, coal, gas, hydro, batteries) bid in with their price and capacity. The bids get stacked from cheapest to most expensive until there's enough capacity to meet demand.

Here's the part that makes people's heads explode. As one Redditor explained with 83 upvotes:

Read that last sentence again. Every accepted generator gets paid the price of the most expensive one. This is called marginal pricing. It's how wholesale electricity markets work across the world, not just in Australia.

And it creates a bizarre situation. At midday, when solar is flooding the grid, the “most expensive accepted bid” is basically nothing. Sometimes it's literally negative. Solar and wind bid at zero (no fuel cost), and there's so much of it that coal plants have to pay the grid to keep running.

But at 7pm on a hot Tuesday, the sun's gone, everyone's home cranking the aircon and cooking dinner, and the most expensive generator needed to keep the lights on is a gas peaking plant. Gas doesn't come cheap. And because of marginal pricing, everything gets paid the gas price.

To appreciate how wild this gets, here's what a typical summer day looks like on the NEM wholesale market:

That swing, from negative at lunch to potentially $17,500/MWh at dinner, is the core of the problem. Your solar panels absolutely smashed it during the day. But by the time you get home, start cooking, flip on the aircon and sit down to watch telly, you're buying electricity priced by gas plants. And gas plants are the most expensive generators on the grid.

As one commenter put it: “Prices might be low during the day, but they spike up over a hundred when the gas plants fire up.”

1. Gas sets the price when it matters most

The marginal pricing mechanism means cheap daytime solar only helps when you're using power during the day. The moment the sun drops and gas plants get called in, the wholesale price jumps. And for most households, evening is when you use the most electricity: cooking, heating or cooling, hot water, entertainment.

Your retailer averages out those extreme price swings into a flat rate. But the average is dragged up by the evening peaks, not down by the midday lows. A few $10,000/MWh spike events in a quarter can shift the whole average significantly.

2. Wholesale generation is only 30% of your bill

Even if wholesale prices dropped to zero around the clock, your bill wouldn't. Because generation makes up roughly 30 cents of every dollar you pay for electricity. The rest is:

That 70% of your bill, the poles, wires, and retail costs, doesn't budge no matter how cheap solar makes the wholesale price. It's a fixed tax for being connected to the grid. And it keeps going up because maintaining ageing infrastructure is expensive.

3. Retailers aren't in a rush to share the savings

One of the most-upvoted takes in the Reddit thread was blunt: “I highly doubt retailers will pass the savings onto the consumer. They are private businesses and their goal is maximising profits.”

It's not entirely cynical. Wholesale costs dropping means the retailer's margin on each kilowatt-hour gets fatter. They might not raise your rate, but they're under no real pressure to lower it either. Prices tend to be sticky on the way down and responsive on the way up. Competition should theoretically fix this, but when every major retailer is playing the same game, the downward pressure is weak.

The bottom line: waiting for retailers to pass through the daytime solar savings is a bit like waiting for petrol stations to drop their prices the same day the crude oil price falls. It's technically supposed to happen. In practice, good luck.

Every few weeks, a headline pops up: “Electricity prices go negative in South Australia!” And it sounds brilliant. Free power. Solar is winning. Problem solved.

But as one Redditor correctly pointed out: “Negative spot prices are not a good thing. They're actually an indication that there's a severe mismatch between generation and consumption/storage.”

Negative prices mean we're generating far more solar than the grid can use or store. Coal plants are paying the grid to keep taking their power because it's cheaper than shutting down. And all that dirt-cheap energy is going to waste because there aren't enough batteries to soak it up and shift it to the evening.

It's like growing mountains of tomatoes with no cold room. You end up giving them away at lunch because they'll rot otherwise, and then everyone's paying top dollar for tinned tomatoes at dinner. The production isn't the problem. The storage is. For a deeper look at what negative pricing actually means and how to profit from it, read our full explainer on negative electricity prices.

Here's where the Reddit thread got genuinely hopeful. Australia currently has around 11 GWh of grid-scale network batteries installed. Another 14 GW is under construction and expected to hit the market in the next 12 to 24 months. Total pipeline: roughly 17 GW of battery capacity online or on its way.

For context, typical NEM demand is 22-24 GW. That's an enormous amount of storage coming. One commenter cited 30-50 GWh of additional network batteries in the pipeline over two years.

These grid batteries do exactly what you'd want them to do: charge on cheap daytime solar, then discharge during the evening peak, muscling out gas plants and driving down the price that sets the marginal rate. Less gas called in means lower peak prices. Lower peak prices means lower average wholesale costs. Which should, in theory, mean lower bills.

Two problems with the “should, in theory” part:

Grid-scale batteries are the right long-term fix for the system. But if you're waiting for them to flow through to your bill, you're in for a few more expensive quarters yet. For a full breakdown of how the grid battery buildout affects home battery decisions, read our analysis on 14 GW of grid batteries and what it means for your home battery ROI.

This is the part where the maths gets interesting. If the evening peak is where your bill blows out, and grid batteries won't fix it for a while, and retailers aren't going to voluntarily cut their margins... the fastest way out is to stop buying electricity during the evening peak.

A home battery does exactly that. It stores your dirt-cheap daytime solar and powers your home from 5pm to 9pm instead of drawing from the grid. You're effectively doing at home what those 14 GW of grid batteries will do at scale, but you're doing it right now, for yourself, without waiting for anyone.

One Redditor who'd already added a battery summed it up in a line that stuck with me: “Now I pay supply charge and that's it.”

The numbers back it up. A typical 10kWh battery stores enough to cover most households from 5pm to midnight. That's roughly 8-10kWh of grid electricity you're not buying every day at 30-50c/kWh. Over a year, that's $900-$1,800 in avoided grid purchases. Against a post-subsidy battery cost of $5,000-$8,000, payback sits around 3 years. On a system warranted for 10+.

A home battery dodging the evening peak is already powerful. Choosing the right battery matters, so compare your options carefully. But you can stack three strategies to make the economics even stronger.

1. Join a Virtual Power Plant (VPP)

Instead of just avoiding peak prices, you can earn from them. A VPP program lets your battery discharge to the grid during those $10,000/MWh spike events. You get paid 15-25c/kWh during normal peaks, and sometimes over $1/kWh during extreme events. The same evening pricing that makes everyone else's bill expensive becomes your income stream.

2. Switch to a wholesale spot-price plan

With a battery backing you up, a spot-price retailer like Amber Electric passes the raw wholesale price through. Our battery arbitrage guide walks through this strategy in detail. You charge your battery when it's negative or near-zero during the day, and never touch the grid during evening spikes. One Redditor shared: “My bill went from $140 with Sumo to $50 with Amber including their $25 monthly fee.” Without a battery, spot pricing is risky. With one, it's a cheat code.

3. Load-shift the heavy stuff to daytime

Run your dishwasher, washing machine, pool pump, and EV charger during the day when your panels are producing. Every kWh used directly from solar is a kWh your battery doesn't need to store for the evening. Timers and delay-start functions make this easy even when you're not home.

The upcoming Solar Sharer program launching mid-2026 will offer free daytime electricity for smart-meter homes in NSW, SE Queensland and SA, making daytime usage even more attractive.

The frustration in that Reddit thread was real and justified. Solar panels have done their job. Daytime electricity is cheaper than it's ever been. But daytime was never where your bill really hurt. The evening peak was always the expensive part, and it still is, because gas plants still set the price every night.

The grid-scale fix is on the way. Seventeen gigawatts of batteries are going to reshape the market over the next two years. But you don't have to wait for that to show up on your bill. A home battery lets you store your free daytime solar, dodge the evening peak entirely, earn from VPP programs during price spikes, and stop relying on your retailer to pass savings through. Just make sure your battery is installed somewhere cool, as Australian heat can silently eat your battery's capacity.

The people who've already done it are paying supply charge and that's about it. Everyone else is still subsidising gas plants every evening and waiting for the system to sort itself out.

Use the payback calculator to see what a battery saves in your situation, or take the 30-second rebate quiz to check what government incentives you qualify for. With subsidies covering up to 50% of the cost and payback periods sitting around 3 years, the maths has already shifted. It's just a question of whether you shift with it.