Low-income and disadvantaged households should be priority for clean energy

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“Energy poverty” is not unique to developing countries. In Australia, it affects three million. But it’s a problem clean energy can easily solve.

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“Energy poverty” is a term most would associate developing countries. Yet there are three million Australians living below the poverty line who do not have access to affordable household energy.

While the rest of us may shudder when we open a power bill, these Australians simply cannot afford to turn on a heater or run a washing machine.

This week’s Smart Energy Expo in Sydney will focus on how the energy transition from a centralised fossil-fuel dominated energy system to a decentralised clean energy system will create opportunities and benefits for consumers.

More than 1.8 million households have already installed rooftop solar, slashing their power bills and reducing carbon pollution. Yet the transition has the potential to increase inequality.

Up to sixty six percent of households will generate some energy by 2050, according to the CSIRO and ENAs Electricity Network Transformation Roadmap.  This will save the average household $414.00 a year, but households with solar and batteries will be better off than those without.

It will likely be the three million people in Australia living below the poverty line and the millions in private rental or public housing, that is those who have less choice and control, who will miss out.

Without specific policies to address this inequality, ACOSS is concerned that the future energy market will create a two-tiered system – those who can access and afford and household solar and storage and those who cannot.

Governments, the energy sector and developers of emerging technologies must put the needs of the vulnerable and disadvantaged families at the centre of the energy transition.

This will not only relieve energy and financial stress but create benefits, it will have positive social, health, and economic outcomes for communities.

Emerging technologies that automate efficient energy use in the home, sell excess energy into the grid or provide it to those without access to solar, with little to no input needed from the household, could provide significant benefits to low-income and disadvantaged housholds.

There are some good examples of programs that are benefiting low-income and disadvantaged households.

The Queensland Government is piloting the installation of solar energy on public housing in three locations.

St George Community Housing have invested in building new and retrofitting older community houses to incorporate energy efficiency and solar PV with support from the Clean Energy Finance Corporation (CEFC) and NSW Government.   Residents are saving up to $570 dollars each year per property.

For private renters, landlords have no incentive to invest in energy saving measures, even when these measures are free. City councils including Darbin in Melbourne andthe City of Adelaide are providing programs to remove up-front costs of installing solar to landlords.

A community group in regional NSW has teamed up with the not-for-profit CORENA fund to give landlords interest-free loans to install solar on their rental properties.

Private enterprises like SunTenants and Matter are providing business models where tenants and landlords save money.

Tesla is proposing a “virtual power plant” in South Australia that prioritises Housing Trust and low income households, offering free installation of solar and battery storage and a 30 per cent discount on electricity usage.

However, without mandatory requirements for rented properties to meet minimum energy standards, landlords are unlikely to bother installing solar at the low end of the rental market.

In the future all new properties may have clean energy measures embedded as standard. The CEFC has recently partnered with Mirvac to embed clean energy measures in residential communities in Sydney and Brisbane that will meet 90% of household consumption.

Though still few and far between Indigenous communities are also benefiting from solar, helping to reduce energy bills, create jobs, grow communities, and care for the land.

They are being delivered by a mix of government funding such as the ARENA and Northern Territory Government project at Daily River and private investment such as the Indigenous Business Australia partnership with Indigenous corporation AllGrid Energy in the Barkly tablelands.

While these examples are heartening, we are not doing enough.  Initiatives to date have been small-scale, slow and piecemeal.

Those experiencing disadvantage have different needs and require different solutions.

ACOSS fears leaving the solutions purely up to the market and fragmented government policies will not be enough to reduce cost of living pressures and household power bills for all.

It is incumbent on governments, the energy sector and developers of emerging technology to priorities the removal of barriers and invest first in programs to deliver clean energy solutions to low-income and disadvantage households.

In its submission to the ACCC Electricity supply & prices inquiry, ACOSS has called for the establishment of a process – like the Gas Market Reform Group.

We need a dedicated process to lead the design, development and implementation of policies, programs and systematic reforms to that deliver distributive energy and inclusive and equitable and benefits to low-income and disadvantaged households.

Building in the needs of vulnerable households into new energy solutions and services will be critical to ensure our future energy system and society is inclusive and more equitable.

In the meantime more needs to be done now to relieve the pressure on those currently doing it tough.  That means retaining the energy supplement; increasing Newstart; shifting to fair percentage based energy concessions and implementing minimum energy efficiency standards for rental properties.

If we take bold steps now, Australia’s smart energy revolution will address inequality, not further entrench it.

Author: Kellie Caught is senior advisor, Climate and Energy, Australian Council of Social Service (ACOSS)

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31 Comments
  1. George Darroch 8 months ago

    Australians are very poorly served by their housing, and this is especially so if you’re poor.

    Shivvering all through the winter and enduring chronic sickness are frequent occurrences. Most of us in cold houses just turn on the heaters and suck up the huge power bills we face from April through September. The poor don’t have that option, because our state and federal governments refuse to get in behind renters and demand that they’re warm and dry year round.

    • Joe 8 months ago

      When you turn on the nightly news or open up the newspaper the ‘Housing’ story is always about housing prices and which ‘celebrity’ has just splashed out on the latest addition to their real estate portfolio. The struggles of First Home Buyers get the occassional run. But as you rightly point out George the quality of housing gets no attention at all. Urban planning in Australia is a disaster, its been like that for ages but Governments are really interested. As long as the housing boom gets rolling on….more and more moolah for the Treasury coffers.

  2. Barri Mundee 8 months ago

    The challenge will be to improve energy efficiency in existing apartment blocks and install solar and perhaps batteries.

  3. Hettie 8 months ago

    Here’s a thought, that may solve two problems with one measure.
    Nation wide legislation that requires landlords to bring rental properties up to 6 star standard AND install 5kW solar before a new tenant can move in.
    At the same time, end negative gearing and the capital gains tax concessions. Except for money spent on such upgrades.
    My bet is that huge numbers will just sell, releasing a flood of low cost houses onto the market.
    Suddenly, housing becomes affordable.
    Low interest loans to the new buyers to upgrade and install the solar too. Perhaps supported by arena.
    Comments please.

    • Paul Surguy 8 months ago

      You have hit the nail right on the head Hettie

    • Mike Westerman 8 months ago

      SImilar thinking Hettie. We have an ill-directed incentive pushing up housing prices in the form of the capital gains tax discount. It would be great to see Labor as part of their tax reform allow landlords to opt for an investment incentive to put solar on their roof now in exchange for retention of a multiplier of that amount as a CGT discount later, with the stick being a plan to phase the discount out for all owners in the longer term.

      • Hettie 8 months ago

        Thanks, but doesn’t energy efficiency have to come first?
        A 5kW solar system won’t do much for an uninsulated, drafty, timber floored house with 3mm glass in the west facing , unshaded windows, will it.
        Like trying to aircondition a tent.

        • Mike Westerman 8 months ago

          Much as I support energy efficiency, many Queenslanders are drafty, timber floored with 3mm glass! Careful planting and shades, and high ceilings make them comfortable, except in winter. Fortunately many tenancies were insulated during the pink batts program (an excellent program in the circumstances despite the shit sprouted about it). LEDs cut nighttime use.

          But the 5kW solar on the roof is making cheap hot water, slow cooker and rice cooker a good meal, and excess power sold cuts power bills!

          • Hettie 8 months ago

            I do take your point, and am well aware that energy efficiency measures must be appropriate to the local climate. That said, the Queenslander design type evolved do the local needs, and for most of the year functions well. The verandas and lattice panels do an excellent job of shading the windows.
            High thermal mass and heavy insulation would be a disaster, BUT, part of the Qld’er pattern is excellent cross ventilation. Therefore, insulation of floor and ceiling, weatherstripping of doors and windows, would enable retention of warmth when it is needed, the lightweight construction prevents buildup of heat in summer, and the cross ventilation when doors and windows are opened allows rapid purging of hot air in the evenings.
            Installation of a well placed, closable hot air chimney would also help.
            The insulation would reduce heat build up during the day from direct radiation on the roof.
            So I still think that insulation and draft exclusion would reduce the energy load, and should come before solar. Not instead of, as well as, and before.

        • solarguy 8 months ago

          I for one wouldn’t upgrade a tent if it wasn’t cost effective. Either doze it and rebuild or sell.

    • Catprog 8 months ago

      What happens to places that don’t have the roof for 5KW?

      • Hettie 8 months ago

        20 panels not that big a deal, but answering that is above my pay grade. There are usually sheds or garages…

        • Catprog 8 months ago

          I am thinking apartments or shadows of trees

          • Hettie 8 months ago

            Still above my pay grade, but I beleive there are some schemes that tackle this.

    • rob 8 months ago

      Hettie thank you for not blocking me as of yet……… I won’t mention whats his name again! promise! I so enjoy your comments but in my own defense he really rip me a new hole……..and for someone who suffers from mental illness I find it very difficult to forgive and forget. Cheers rob

    • solarguy 8 months ago

      Only one problem, those who rent those homes that get sold will be looking for new digs. Less rental supply, higher rents.

      Labor’s policy is to reduce negative gearing to owning 1-3 houses only apart from the family home and that’s fair. That will be a better balance of more affordable home ownership and keeping rents affordable. But tax concessions for upgrading is a good idea.

      • Hettie 8 months ago

        More housing on the market, lower prices.
        There are some obvious tweaks. Such properties may be purchased only by owner occupiers. The tenant must have first refusal.
        It is surely not beyond human wit to devise a system that will facilitate transition from renting to owning, and support energy efficiency upgrades as well.

    • My_Oath 8 months ago

      Problem with huge amounts selling is the downward pressure that has on prices and the negative impact that has on people’s bottom line. And by that I mean more people are put in a position of financial distress as they then owe more than they own.

      The way to combat that is a gradual phase out of those schemes, over, say, a decade so it isn’t a one off market shaking hit.

      I really want to see ideas like Power Ledger progress so that owners can become generators that sell to their tenants. This provides additional revenue (that should be able to offset the reductions in the other schemes should it come to that). Even if negative gearing and tax concessions remain, the revenue from the solar they can sell should/would make the installation of solar on rentals a compelling case.

  4. Ian 8 months ago

    Inequality is the wrong concept regarding distributed solar. This implies that solar households are disadvantaging other households. We already know that distributed solar has actually saved further network investment and has reduced wholesale prices of electricity. Distributed solar has helped to kickstart renewables of all kinds and has initiated the unstoppable move to decarbonising our civilisation. The (perhaps selfish) efforts of the ‘advantaged’ have given everyone, including the disadvantaged or procoal lobby a fighting chance at future survival. Large industries have been parasitic on the electricity grid enjoying low electricity prices to the disadvantage of all households rich and poor. Retailers enjoy wide margins between average wholesale prices and retail tariffs. Maybe attention should be paid to these factors before implying a vilification of owners of solar rooftops.Many pensioners have already installed solar and have helped contribute to the benefits of solar. Ways of helping renters and public housing recipients to participate in distributed solar directly are very good . But in a sense these groups of people are already benefitting from this solar revolution.

    • Hettie 8 months ago

      Will inequality still be the wrong concept when the only customers still on the grid are renters and those with no suitable roof space? The very people who most need relief from energy poverty?
      The time to consider their plight is now, before there is such wide scale grid defection that those still connected are paying $10 daily charge.
      Try doing that on Newstart of $270 a week.

    • Diana 8 months ago

      I can tell you right now, Ian, no person living in deepening poverty has any time for your treatise. They need help to endure now, not an implication they are being helped to endure…some kind of life [then].

      • Hettie 8 months ago

        Well said, Diana.

      • Ian 8 months ago

        Lots of shades of opinion to be sure. I for one don’t like to see people in poverty probably as much as you don’t. People installing solar on their rooftops are not leading to worsening poverty . Or are you saying that that they are?

        • Hettie 8 months ago

          Ian, it’s not installing rooftop solar that has the potential to worsen energy poverty, but wholesale defection from the grid.
          One assumes that grid costs are more or less fixed. Supplying fewer premises will not reduce the overall cost, but it will reduce the number of customers to pay those costs.
          It is obvious that networks will then be tempted to increase the daily charge to the remaining customers.
          It is equally obvious that doing so will increase the numbers deciding to leave the grid. A vicious cycle ensues, leaving those who can’t afford their own independent power generation as the only grid customers, and stranding all commercial generators with an ever decreasing customer base.
          Attempts by networks and generators to maintain their profits in the face of a declining market inevitably mean that those who can least afford to pay will be faced with ballooning power bills, forcing them deeper into poverty.
          The obvious way to keep customers connected is to reduce the daily charge AND increase FIT.
          The incentive to leave the grid is reduced, and that to stay is increased, so the customers are far more likely to stay.

          • Ian 8 months ago

            Hettie, you do produce some good writing when you are riled 😉 . Here’s a thought about grid defection. To the solar roof owner the grid is a virtual battery and an electricity export conduit/marketplace. Addressing the virtual grid battery (vgb) concept: the advantages of the vgb are
            1. Cost $1.50/day ( connection fee)
            2. Size practically infinite kWh
            3. Current draw approximately 100amps on a single phase line
            4. Reliability pretty good actually unless the old coalers conkout.
            5. Standby status unlimited number of days electricity supply available
            Disadvantages of vgb:
            1. ‘Charging’ limits 5kW
            2. Virtual (in financial terms) Round trip efficiency 45%( convert export kWh to money and the same money into import kWh) 1kWh exported buys you 540Wh imported.
            Home battery advantages:
            1. RTE about 95%
            2. Reliability not dependent on grid factors
            3. No upper limit to charging kW choose a battery to suit the solar array.
            Disadvantages:
            1. Expense: about $800 to 1000/kWh installed
            2. Size: very limited by expense
            3. Very expensive use of battery capacity for extended standby functions
            4. Discharge current limits?

            As you can see, the advantages of the gvb ( grid connection) outweigh those of the behind the meter battery, so grid defection is not really a practical proposition.

          • Hettie 8 months ago

            Thank you.
            Your argument for staying connected is compelling, to me, but biggish battery and disconnection appear to be seen as cool, trendy, forward thinking.
            While I can see the merits of a battery that provides dark hours cover and blackout backup, the grid is now so reliable, barring loss of interconnecters in extreme weather, or possum arc-over, the cost-benefit is very poor.

          • solarguy 8 months ago

            Ian, At this stage I won’t go into any depth about defecting from the grid, but I will say that if anyone is considering doing it with some of the Hybrid gear on the market they will be disappointed.

            A system that provides enough battery for at least 3 days autonomy is needed, plus a genset for when things go tits up.

            Anyone who is in the starting phase of designing a house now has a golden opportunity to get things right, re: Passive design, energy efficientcy of appliances and plenty of North and West facing roof area for PV and SHW.

            Such a home could keep a family of 4 very comfortable for all seasons, consuming as little as 10kwh/day on average.

            But hell why defect if you have the grid and can sell excess PV production to the grid. If things change because the greedy bastards make it too expensive, then the above scenario will come in very handy and not that expensive at all to say goodbye suckers.

            As Hettie has said below the poor will be totally f%#ked over if defection happens in droves!

          • Hettie 8 months ago

            Is it my imagination or is Ian doing some heavy duty hepeating?
            That is, a man repeating what a woman has said because hey, no one takes any notice of women.
            And the more I think about it, the more I realise how bloody patronising his comment about my writing really is.
            Ian, I do not need you to either endorse my writing skills or to explain to me what I have just said.
            Please don’t do it again.

          • solarguy 8 months ago

            Hettie I don’t think so, patronising perhaps…………..um. The problem with the written word is that it doesn’t easily convey some thoughts or contrivences.

            The main thing is he ignored how to look after the poor in this shitty mess of greed.

            Talking of taking notice of women, I have to go now and p/up she who must be obeyed from work. Perhaps more on this subject later.

          • Ian 7 months ago

            Hettie, you do get riled, look at you pulling the woman/patronising card from your deck. That really is very sweet of you! The “what about the poor” argument has never been about the poor but just a cheap shot to slight any other person’s position. Rooftop solar is not about to raise electricity costs . That is the whole point, it has put downward pressure on wholesale prices. Up to now the death spiral idea of fewer and fewer people paying for more and more of the grid has been utter BS. The generators and networks have thoroughly gamed the system as you well know. Even you have a nice solar setup on your roof and you , by your own argument don’t give a rats ar-e about the (other) poor.

          • Hettie 7 months ago

            Ian, I *am* the poor. Yes, I own my home, but my only income is the age pension, and a very little extra from occasional AirBnB guests.
            It was reading this newsletter, talkING about how much solar costs have come down, thet spurred me to investigate, could I, after wanting them for 20 years, get the solar panels I had designed the new house to have. But I ran out of money.
            Turns out I could afford them after all.
            My concern is for renters, those without a suitable roof, all the people who simply cannot get a solar system.
            I have no battery, but my system is producing so much more than I had budgeted for, that it makes sense for me to regard the grid as my battery.
            It does worry me that if too many solar owners defect from the grid, those least able to will have to bear the increasing cost.
            Your sneering at my concern paints you a very ugly colour.
            Do you not know that by and large it is the people with least who are most generous, because we know what it is like to be in need.
            You are the one who is patronising, so please, take your attitude and shove it up your arse.

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