Electricity retailers warn new rules requiring them to offer three free hours of power every day could bankrupt smaller providers or force them to hike rates at other times, unless the federal government urgently reforms network tariffs as well.

The energy regulator is set to begin consultations with power companies after Climate and Energy Minister Chris Bowen last week unveiled the government’s so-called Solar Sharer scheme, a policy that will require retailers to offer free electricity to households for three hours in the middle of the day when sunshine typically floods the grid with more power than it needs and causes wholesale prices to crater.

Retailers indicated they supported the intent of the reform: encouraging more people to use power when cheap renewable energy is most abun

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