The clean energy transition must not forget low-income households
Willow Aliento | 1 August 2017
Energy and social policy must be integrated to ensure low-income households are not left behind in the clean energy transition, according to a joint call delivered by the Climate Institute, Brotherhood of St Laurence and Australian Council of Social Services.
Together they have launched a report, Empowering disadvantaged households to access affordable, clean energy, which sets out policy priorities developed in consultation with over 120 community, environment and energy experts.
Five outcomes have been identified as crucial: cheaper clean energy, empowered consumers, improved household energy efficiency and productivity, stronger consumer protection, and improved capacity for low-income households to pay bills.
ACOSS chief executive Dr Cassandra Goldie said she wanted to see an end to blame-shifting and politicking by elected leaders.
“It’s clear we need to transition to modern clean energy in line with our Paris commitment. We must also urgently relieve pressure on people who cannot cope with rising energy prices,” Dr Goldie said.
“There has been a fundamental failure to provide adequate measures to reduce energy stress and deliver a national coordinated stable energy and climate policy, which is a major factor in pushing up energy prices.”
She said efforts to date to provide access to affordable, reliable and clean energy were failing, and that low-income and disadvantaged households were bearing the brunt.
The report said uptake of domestic solar had generally been confined to households with higher incomes, and also primarily those that owned or were buying their home.
We risk a two-tiered system
While many of these households are seeing very low or zero energy bills, those who are not as able to install solar, such as renters, apartment dwellers and low-income households, have to shoulder a higher share of network costs.
They are also paying a greater share of the proportion of an average bill that contributes to the Renewable Energy Target than the households that benefit from the RETs small scale technology certificates, which subsidise solar installs.
“Put plainly, there are concerns that, without significant policy and regulatory reform, the future energy market will create a two-tiered system that favours those who can access and afford distributive energy resources (such as solar panels) and those who cannot, further widening the gap between the haves and the have-nots,” the report said.
“This inequity is further exacerbated when incentives to support the uptake of distributive energy are recouped in a regressive manner through electricity bills, rather than more progressive means, such as from government budgets. Those with distributive energy contribute less.”
It said that as not everyone can access distributed energy, retaining an affordable grid with low-cost, large-scale clean energy will be essential.
Energy market reform necessary
The report advocates for a number of energy market reforms such as incentivising the transition to large-scale clean energy through measures like a solid long-term clean energy target or an emissions intensity scheme.
Inclusive and equitable network policies that support a greater use of demand management and distributive energy, alongside large-scale generation, are also recommended.
Other measures proposed in the report include increasing support for energy efficiency upgrades and installation of rooftop solar for low-income households, and implementing minimum energy efficiency standards on rental properties.
“Governments must listen to people’s very deep concerns about energy prices and make the transition to clean energy equitable and affordable for everyone,” Dr Goldie said.
“We need a mechanism to end uncertainty and incentivise the transition to clean energy, and the allocation of costs for this must be equitable.”
The report also calls for the government to review the adequacy of income support payments such as Newstart, pensions and payments to low-wage earners.
These households are likely to be facing the largest degree of energy poverty and bill stress, the report said.
“We already have almost three million people living in poverty in Australia,” Dr Goldie said.
“We need to provide urgent relief for thousands of people suffering as a result of energy stress, and map a way forward now to ensure those numbers don’t increase further.”
The Brotherhood of St Laurence’s head of energy and climate change, Damian Sullivan, said action was long overdue.
“We hear harrowing accounts of the impacts of higher energy costs,” Mr Sullivan said.
These include households going without hot water, going to bed early to avoid the need to put heating on, or parents getting by on only one main meal a day. Other households are being disconnected due to an inability to pay electricity or gas bills.
“Some of the measures recommended in this report can give immediate relief for families as well as help reduce power bills long-term through energy efficiency, installing rooftop solar and well-targeted concessions,” Mr Sullivan said.
“Unless there is a nationally coordinated plan that is fair and inclusive – and far better integration between climate, energy and social policy – vulnerable households will be left behind.
“Australia can do better. Energy is an essential service, so we must make clean energy available and affordable for all.”
- Read the full report