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Rooftop solar uptake still highest in low-income Australia

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Just in case we needed any more evidence to debunk the myth that rooftop solar was a plaything of the rich – or middle class welfare – a new and detailed analysis of solar installations in Australia has shown that lower income families and regional communities are the nation’s most likely to put solar systems on their roofs.

In a study measuring the uptake of solar panels and hot water systems by postcode and income, the REC Agents Association (RAA) has found that, of the top 10 solar suburbs in each Australian state and territory, almost all households had a lower income than the state average.

The analysis, released by the national industry body on Tuesday, also shows more than 40 per cent of solar installs are in rural and regional communities, despite these communities making up only 32 per cent of Australia’s housing stock.

“Installation of solar systems in the capital cities were typically characterised by postcodes in the outer metropolitan mortgage belt,” the RAA report says, pointing to an inverse relationship between average incomes and solar penetration levels; that is, as income levels increased, solar uptake declined.

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In the more populated states, the report notes, the suburbs with the most solar installations tended to be outside the capital cities. Of the top 10 postcodes in each state (80 in total across 8 states and territories) 45 per cent were in rural and regional areas, 45 per cent in capital cities and the remaining 10 per cent in other major urban centres.

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The findings are along the lines of data published last week by solar installer Energy Matters, showing that Australia’s top three spots for household solar penetration were Browns Plains in outer Brisbane (51%), Perth’s outer southern suburb of Mandurah (46%), and Salisbury – an unassuming suburb 25km north of Adelaide.

According to RAA, the five suburbs in Australia with the largest number of solar systems were the Bundaberg and Hervey Bay areas in Queensland, WA’s Mandurah and Weribee and Hopper’s Crossing in Victoria – all with below state average income levels.

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The report also notes that the factors driving rooftop solar uptake in these demographics were most likely to be: level of home ownership; building suitability; relative importance of energy bills; and level of new home and renovation activity.

Fiona O’Hehir, vice president of the RAA, said the results illustrated why Australia’s Renewable Energy Target should be left unchanged.

“RAA’s study reinforces the importance of the Renewable Energy Target to lower income families and people living in rural areas,” O’Hehir said. “Without the RET, lower income households would not be able to reduce their power bills. The RET helps families with the upfront cost of installing solar.”

 

The Coalition government’s controversial review of  the RET – which is widely expected to result in the target being reduced – made what has been described as a “farcial” start to its public deliberations last Wednesday, attracting new accusations of bias and of having a predetermined outcome.

In a discussion paper released early this month, the RET review panel included considerations to remove incentives for small scale renewable energy technologies – namely solar PV – and suggested, instead, a shift of focus to “non renewable” low emissions technologies, such as gas or carbon capture and storage.

   

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  • Professor Ray Wills

    A silent Gettysburg Address of solar?

    Energy of the people, by the people, for the people.

    (With kudos to U.S. President Abraham Lincoln)

  • madankerr

    “… more than 40 per cent of solar installs are in rural and regional
    communities, despite these communities making up only 32 per cent of
    Australia’s housing stock.”

    Did the analysis control for the proportion of houses vs apartments? If it didn’t, then the higher uptake in rural and regional communities is probably due to the type of housing stock — not so many apartments in these areas.

    Something like one-third of new housing in the Sydney metropolitan area is apartments — if cities are to have the same proportion of solar households as rural and regional areas, we’ll need to have policies that make it easy for strata titled apartments to install solar. Programs that help landlords to install solar would be good to.

    • Warwick

      You’ve highlighted the weakness in this analysis in that “correlation does not equal causation”. The data is average household income across a postcode and the proportion of solar systems across all dwellings including apartments, convents, universities boarding houses etc. Most importantly the data does not define the income of who actually buys the system. I note that the paper actually mentions that the “(i) level of home ownership, (ii) the suitability of buildings (number of detached and semi-detached dwellings” as important factors yet the headlines suggest that it is taking the form of assisting the less well off households. If you look at the line of best fit in their presentation, it is almost horizontal, giving a very low R2 value, therefore suggesting that there is in fact no correlation.

      Taking this “correlation” idea further, you could do a national survey to find where hipsters live and assuming the proportion is highest in inner city areas of Melbourne, Sydney and Brisbane propose a paper saying “Level of solar uptake inversely proportional to hipster proportion of population”.

      This has nothing to do with the merits of the RET or rooftop solar. It is certainly not true that solar is the preserve of the rich but the corollary is not true either.

      • Michael Doherty

        Missing the point. There is no claim that there low income households is causing higher uptake of Solar. But the fact their is a correlation is telling. If a suburb, characterised by low income and with little standard deviation in incomes, buys the same or slightly higher amount of Solar Panels than a richer suburb it stands to reason that income cannot be considered a driver of solar uptake. Which is the whole point of the article.

        • Warwick

          Really? Have you read the title “Rooftop solar uptake still highest in low-income Australia”. If this relationship were true, that there was indeed an inverse relationship between income and solar uptake, then the slope of the trend line should be down at around -45% yet it is almost horizontal. Essentially, the chart tells you that there is no relationship.

          It’s also curious that the number of systems is ranked by postcode which could just be showing that the postcodes with the most number of dwellings have the highest number of systems, which would be expected. Also both hot water and PV are counted which could artificially inflate the percentage uptake if many households have both…i.e. in a “poorer” postcode the “richer” homeowners in an area may have both technologies, which would create the illusion that a greater percentage of dwellings have solar.

          • Michael Doherty

            Solar installation quantities, as a proportion of total houses, are indeed highest in low-income suburbs. So the statement ‘Rooftop solar uptake still highest in low-income Australia’ is in fact an observational accuracy. What would not be correct is to say ‘low income families buy more solar’. This is not what is said.

            The fact remains – and the point of the whole analysis – that suburbs with low income thresholds are not excluded from having solar installations. But nor are they a driver of installations. Indeed, with suburbs with low incomes and low standard deviation (or spread of incomes – meaning poor suburbs are almost entirely and exclusively of low income) you could say that low income doesn’t exclude those households from the market.

            The thesis of the whole analysis is that these households are not excluded from accessing solar. The analysis shows this. Job well done.

          • Warwick

            I suggest you get a better understanding of what correlation means and the fact that a flat trendline means an r value close to zero (http://statistics.about.com/od/Descriptive-Statistics/a/Slope-Of-Regression-Line-And-Correlation-Coefficient.htm) which means that the hypothesis is void.

          • Michael Doherty

            Oh dear. As a graduate of statistics I understand what a correlation is. i understand that 0 is a poor r2 value and represents no correlation, and an r2 of 1 being the perfect correlation. I am simply saying the title states an observation which is observed to be accurate. It doesn’t state a correlation. You made that up.

          • Warwick

            Let me quote you..”But the fact their is a correlation is telling. “.

            I also note from the chart that there are postcodes that have between 60 and 70% penetration which is far in excess of the 38% mentioned in the second table, yet these are in the higher income percentiles. So you can cherrypick postcodes to give an alternative answer.

            I’d stick by the trendline which shows no meaningful correlation. Unless you separate the housing stock by dwelling type you can’t make any meaningful conclusion from this data. QED

  • madankerr

    Of course, Fiona O’Hehir, vice president of the RAA, wants the RET to continue giving a subsidy for every solar system sold – it’s good for business. She uses this data as evidence that the RET is effective at assisting lower-income households. It might be effective, but it isn’t an efficient use of the money spent.

    Assistance to lower-income households is MUCH more efficient when it is means-tested so that middle and upper income people don’t get a share of the pie.

    What if the SRES were scrapped and replaced by a means-tested subsidy? What if someone held Abbott to his promise of 1 million new solar homes – targeted to those in most need of subsidy. Instead of subsidising every new solar system, we should target the same money to those who really need it.

    If the same amount of money is spent on subsidies, installers would continue to get the same amount of business. The only difference would be which roofs the PV sprouts on.

    What are your thoughts? This is a new idea for me.

  • Gramus

    While it is true that middle income home owners (rather than the rich) have been the largest beneficiaries of residential PV support schemes, it doesn’t change the fact that renters and low income Australians are bearing costs via higher electricity prices while not being in the position to benefits. There are still distributional issues here.

    • JeffJL

      Justify your allegation that residential PV is increasing the price of electricity. Time and time again it is shown to reduce the wholesale cost of electricity.

      • Gramus

        Follow the link for the most recent IPART retail electricity price determination. RET compliance costs are recovered via your electricity bill. The average household pays $294 a year in green scheme costs via their electricity bill.
        Also…
        Given that retail electricity prices in NSW are regulated on the basis of a theoretical benchmark efficient utility (and NOT the actual wholesale price of electricity) consumers on regulated retail prices do not benefit from lower wholesale electricity prices one little bit.

        http://www.ipart.nsw.gov.au/Home/Industries/Electricity/Reviews/Retail_Pricing/Review_of_regulated_electricity_retail_prices_2013_to_2016

        • JeffJL

          Cheers Gramus. Just reading that link. Note that in figure 2.1 on page 18 gives a figure of $294/year for the carbon price and other green initiatives. Close enough to your figure of $332 to not quibble over.

          I will quibble over your use of the figure for all green schemes to try to justify your allegation that residential PV support schemes are causing higher prices. The ~$300 figure includes all green initiatives.

          A look at the IPART reports terms of reference clearly shows it is only looking at costs, not benefits. Household PV schemes reduce costs on retailers in several ways. Reducing and moving the peak load thus meaning less upgrading of the network (how much extra would the bills be now had suppliers had to spend extra money to provide the power for the peak if household PV was not there) and providing cheap on sell-able power (I believe the tariff in NSW has been reduced to about 6c/kWh) which is generally on sold to neighbors during peak periods at a margin of about 300%.

          To your question “Is that ‘justified’ enough for you?”. No.

  • wideEyedPupil

    So Gillard was 100% wrong to call solar a rich persons play thing subsidised by poor “working family” people (ALP code for what was once working class). I guess you could say home owners are being subsidised by renters, but the payback is it reduces power bills for everyone with solar curtailing peak demand and bringing affordable utility scale solar a step closer. And then there’s the safe Climate thing too.

  • John Silvester

    This post and comment thread is an excellent example of wedge politics.

    The RAA releases its spin into the public debate to counter the spin by those wanting to weaken the RET.

    I feel the issue is what is motivating those pushing the “non-solar customers subsidizing solar owning customers”. It is portrayed as a social justice issue yet they fail to apply the same logic to non- air-conditioning owning customers subsidizing air-conditioning owning customers. Most of the large increase in peoples electricity bills is a result of large investment in grid infrastructure to cover summer peak load (air-conditioning).

    Where are the calls for additional fixed charges for air-conditioning owners.

    Discussing the merits and weaknesses of each sides spin is useful but it must be made clear that the issue is not being driven by social justice. Air conditioners fit in with utilities business model, ever increasing grid demand, so lets not look at any social justice implications. Solar runs counter to ever increasing grid demand. So now and only in relation to solar they are champions of social justice.
    The hypocrisy is breath taking.