Electricity retailers have poured cold water on hopes the Albanese government’s plan to force suppliers to offer free power in the middle of the day will slash household energy bills, warning of hidden costs in the scheme that will need to be recovered from customers.

Experts also cautioned that a requirement for retailers to offer three hours of zero-cost power at the height of the day could also just mean higher prices for electricity for those customers at other times of the day, limiting the benefit.