Evaluating the effectiveness of Australia's Small-scale Renewable Energy Scheme for rooftop solar

Abstract

Australia has among the highest rates of small-scale solar photovoltaic adoption in the world, with substantial geographical variation in uptake. Using postcode-level data up to December 2018, we quantify the impact of Australia's spatially-differentiated Small-scale Renewable Energy Scheme on solar uptake. We use spatial autoregressive models and other approaches such as a regression discontinuity design. The results indicate that postcodes receiving a higher subsidy factor have significantly more small-scale solar installations, after controlling for solar exposure and spatial patterns in the data. The subsidy elasticity of small-scale solar capacity installations during 2018 was around 1.2. We use this estimate to calculate that an increase in the subsidy flowing to new installations would be able to reduce carbon dioxide emissions at a subsidy cost of around US$36 per tonne, depending on assumptions.

Retrofit Poverty: Socioeconomic Spatial Disparities in Retrofit Subsidies Uptake

“…This highlights that non-targeted low-carbon incentives are likely to (re)produce social inequalities. In contrast to the present study, which showed a linear association of VEECs generation intensities and economic wealth of areas, the solar PV subsidy uptake was particularly high in postcode areas with middle-income households (Best et al 2019). Hence, it appears that varied mechanisms shape the uptake of the different types of low-carbon material home improvements.…”

“…A sensitivity analysis was conducted to explore the VEECs generation intensity by households rather than dwellings. In contrast to other work that equated dwellings with households (Best et al 2019), this study worked on the premise that only occupied dwellings contained households, namely one household per occupied dwelling. More than 11% of dwellings in Victoria were unoccupied in the Census 2016 (ABS 2019a).…”

“…The regressive outcome of subsidies to improve domestic energy demand among low-income households and renters seems to be compounded by a lack of access to decarbonise and reduce the costs of their energy supply. Recent work investigating the spatial coverage of the SRES found that, across Australia, renters were less likely to benefit from solar microgeneration subsidies (Best et al 2019). This highlights that non-targeted low-carbon incentives are likely to (re)produce social inequalities.…”

“…One possible reason may be the sea and tree change phenomenon, the migration of affluent householders retiring to the Mornington Peninsula, Bass Strait, country Victoria and small towns along the Murray River (Luck et al 2010). The hypothesis that affluent baby boomers may play a key role in the upscaling of the energy refurbishment of homes is supported by evidence that self-funded retirees have been more likely to install solar PV panels than lower income state pension recipients (Best et al 2019). This also means that both white and green certificate schemes in Australia may inadvertently promote free-rider problems.…”

Underlying drivers and barriers for solar photovoltaics diffusion: The case of Vietnam

“…The RPS is assessed as the least suitable of the mechanisms at the present time in Vietnam, scoring poorly in terms of timeliness and institutional feasibility. While Australia's RPS shows that the approach certainly can work well (Best et al, 2019), it would take time for a well-functioning RPS to be established in Vietnam. A caution is that if a new FIT is set too high, it could trigger another solar PV investment rush, which could worsen short-term grid capacity concerns -in addition to overburdening EVN in terms of payments.…”