Why some countries give away free electricity and even pay consumers to use it
In parts of Germany and Australia, a surprising thing is happening more and more often: households are being offered free electricity.
This is happening at times of day when there are high levels of energy being generated from solar or wind. It is caused because sometimes more electricity is being produced than people need. Only a limited amount of storage is available and most of it must be used immediately to keep the system stable.
As countries expand use of wind and solar power, these periods when people are not charged for the energy to run their washing machine or kettle will happen more often. When supply exceeds demand, electricity prices can fall sharply, and sometimes drop below zero. Negative electricity prices mean generators pay consumers to use excess electricity, and this has already started to happen in some European countries such as Germany and Spain. In 2024 alone, European power markets recorded over 1,000 hours of negative prices.
Renewable energy has grown rapidly in recent years. Solar power is driving most of this growth.
The Internationale Energy Agency expects solar capacity to more than double by 2030, making up almost 80% of new electricity worldwide. Renewables are also expected to meet over 90% of global electricity demand by 2030.
Recent data by energy think-tank Ember shows how quickly this shift is happening. In 2025, global low-carbon electricity generation rose by about 887 terawatt-hours, slightly more than the increase in demand. Solar met around 75% of this growth, while solar and wind together met almost all of it.
Paying consumers to use energy
In Australia, this is largely driven by rooftop solar, which produces large amounts of electricity in the middle of the day when household demand is low. In Germany, strong wind and solar output, especially at weekends, can create similar surpluses. These conditions are now occurring frequently enough to affect electricity prices.
The trend is spreading. In South Australia, negative electricity prices accounted for around a quarter of wholesale electricity in both 2023 and 2024. In California, the share of hours with negative pricing rose from about 4% in 2023 to 15% in 2024. Across Europe, countries such as Finland, Sweden, the UK and Germany are all starting to see similar patterns, although the UK is seeing the lowest level of hours with negative pricing compared to these other European nations.
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Data from 2025 shows that this trend is continuing. Negative electricity prices are becoming more common, reaching around 6% of hours in countries such as France, Germany and Spain. In Spain, this doubled in 2025, compared with 2024. In France, they rose by almost half, while Germany and the Netherlands saw increase by around a quarter.
These patterns point to a deeper issue: electricity systems are not yet flexible enough to respond to rapid changes in supply, so have to give away energy to be able to cope.
Evidence from Australia shows how this is beginning to change. Negative electricity prices are now common in the middle of the day, when solar output is highest, with prices falling to zero or below for around two to three hours each day on average. At the same time, extreme price spikes are becoming less frequent.
Negative prices occur in wholesale markets, where prices change frequently and can sometimes fall below zero when generation exceeds demand. Household bills, however, are based on retail prices that include network charges and taxes, meaning many consumers do not see these fluctuations directly.
But for those on flexible tariffs, electricity can become cheaper or “free” during these periods, and in some cases these lower prices may be reflected in reduced unit costs or small bill credits.
However, not everyone will benefit equally. Households with batteries or smart systems are better placed to take advantage of this trend, as they can store energy to use later in the day, particularly in the evenings when typically use is highest.
This reflects a system that is beginning to adapt. According to the Australian Energy Market Operator, large-scale batteries are playing a growing role by storing electricity when it is abundant and releasing it when demand rises. This helps to smooth price fluctuations and stabilise the system.
Together, these changes mark a shift in how electricity systems operate. Now, as renewable energy generation grows, supply is increasingly shaped by the weather. This means demand must become more flexible in response.
UK policy
This shift is already influencing policy in other countries such as the UK. According to the UK’s National Energy System Operator, from summer 2026 households and businesses will be encouraged to use more electricity during periods of excess supply more often, particularly when solar generation is high and demand is low. The aim is to actively shift when electricity is used, helping to absorb surplus energy and improve system stability.
The timing is not accidental. As part of a shift towards renewables, particularly solar, continues to grow in the UK, for instance, periods of excess supply are becoming more common.
Similar patterns were seen in countries such as Germany, where a rapid surge in solar generation urged a sudden need for greater system flexibility. In the UK, for instance, managing the grid during periods of low demand is becoming more complex, as electricity supply becomes increasingly driven by weather conditions rather than consumption patterns.
This is why flexibility is needed. In extreme cases, large imbalances between supply and demand can place significant strain on electricity systems. 2025’s blackout across Spain and Portugal, shows how quickly instability can happen if systems cannot respond effectively. In the UK, system operators stress that these conditions are actively managed.
Free electricity reflects a deeper shift in how the energy system works. As renewable power grows, excess supply is going to become even more common.
Salma Al Arefi does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.