IDEAS home Printed from https://ideas.repec.org/a/eee/ecolec/v180y2021ics0921800920304705.html
   My bibliography  Save this article

Equity and effectiveness of Australian small-scale solar schemes

Author

Listed:
  • Best, Rohan
  • Chareunsy, Andrea
  • Li, Han

Abstract

Two major subsidy schemes for small-scale solar panels in Australia, namely feed-in tariffs (FiTs) and the Small-scale Renewable Energy Scheme (SRES), have substantial inequity implications. Higher household wealth is associated with larger subsidy receipts for both schemes. Using household-level data up to 2018, we find that the top wealth decile had higher subsidy receipts than any of the bottom seven wealth deciles in respect of both subsidy schemes. There is also evidence of inequality between lower-wealth deciles for feed-in tariffs but not the SRES. For effectiveness of the SRES, we show a positive relationship between the SRES subsidy factor and solar panel uptake, but no significant association with size decisions of solar adopters. In contrast, wealth is positively related with both uptake and size decisions of solar adopters. Equity of the SRES could be improved by targeting subsidies to low-wealth households, while efficiency could be enhanced by equalising subsidies across system sizes.

Suggested Citation

  • Best, Rohan & Chareunsy, Andrea & Li, Han, 2021. "Equity and effectiveness of Australian small-scale solar schemes," Ecological Economics, Elsevier, vol. 180(C).
    • Handle: RePEc:eee:ecolec:v:180:y:2021:i:c:s0921800920304705
    DOI: 10.1016/j.ecolecon.2020.106890
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0921800920304705
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ecolecon.2020.106890?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Rohan Best & Paul J. Burke, 2019. "Factors Contributing to Energy‐related Financial Stress in Australia," The Economic Record, The Economic Society of Australia, vol. 95(311), pages 462-479, December.
    2. Thomas Piketty & Gabriel Zucman, 2014. "Capital is Back: Wealth-Income Ratios in Rich Countries 1700–2010," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(3), pages 1255-1310.
    3. Beck, Marisa & Rivers, Nicholas & Wigle, Randall & Yonezawa, Hidemichi, 2015. "Carbon tax and revenue recycling: Impacts on households in British Columbia," Resource and Energy Economics, Elsevier, vol. 41(C), pages 40-69.
    4. Charles I. Jones, 2015. "Pareto and Piketty: The Macroeconomics of Top Income and Wealth Inequality," Journal of Economic Perspectives, American Economic Association, vol. 29(1), pages 29-46, Winter.
    5. Kenneth Gillingham & Tsvetan Tsvetanov, 2019. "Hurdles and steps: Estimating demand for solar photovoltaics," Quantitative Economics, Econometric Society, vol. 10(1), pages 275-310, January.
    6. Dzeraviaha, Ihar, 2018. "Mainstream economics toolkit within the ecological economics framework," Ecological Economics, Elsevier, vol. 148(C), pages 15-21.
    7. Chapman, Andrew J. & McLellan, Benjamin & Tezuka, Tetsuo, 2016. "Residential solar PV policy: An analysis of impacts, successes and failures in the Australian case," Renewable Energy, Elsevier, vol. 86(C), pages 1265-1279.
    8. Mayr, Dieter & Schmid, Erwin & Trollip, Hilton & Zeyringer, Marianne & Schmidt, Johannes, 2015. "The impact of residential photovoltaic power on electricity sales revenues in Cape Town, South Africa," Utilities Policy, Elsevier, vol. 36(C), pages 10-23.
    9. Young, Sharon & Bruce, Anna & MacGill, Iain, 2019. "Potential impacts of residential PV and battery storage on Australia's electricity networks under different tariffs," Energy Policy, Elsevier, vol. 128(C), pages 616-627.
    10. Perry, Neil & Rosewarne, Stuart & White, Graham, 2013. "Clean energy policy: Taxing carbon and the illusion of the equity objective," Ecological Economics, Elsevier, vol. 90(C), pages 104-113.
    11. Winter, Simon & Schlesewsky, Lisa, 2019. "The German feed-in tariff revisited - an empirical investigation on its distributional effects," Energy Policy, Elsevier, vol. 132(C), pages 344-356.
    12. Cassetta, Ernesto & Monarca, Umberto & Nava, Consuelo Rubina & Meleo, Linda, 2017. "Is the answer blowin' in the wind (auctions)? An assessment of the Italian support scheme," Energy Policy, Elsevier, vol. 110(C), pages 662-674.
    13. Bosch, Stephan & Schmidt, Matthias, 2019. "Is the post-fossil era necessarily post-capitalistic? – The robustness and capabilities of green capitalism," Ecological Economics, Elsevier, vol. 161(C), pages 270-279.
    14. Best, Rohan & Burke, Paul J. & Nishitateno, Shuhei, 2019. "Evaluating the effectiveness of Australia's Small-scale Renewable Energy Scheme for rooftop solar," Energy Economics, Elsevier, vol. 84(C).
    15. Lawrence H. Goulder & Ian W. H. Parry, 2008. "Instrument Choice in Environmental Policy," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 2(2), pages 152-174, Summer.
    16. Best, Rohan & Burke, Paul J. & Nishitateno, Shuhei, 2019. "Understanding the determinants of rooftop solar installation: evidence from household surveys in Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 63(4), July.
    17. Monarca, Umberto & Cassetta, Ernesto & Pozzi, Cesare & Dileo, Ivano, 2018. "Tariff revisions and the impact of variability of solar irradiation on PV policy support: The case of Italy," Energy Policy, Elsevier, vol. 119(C), pages 307-316.
    18. Paul J. Burke & Rohan Best & Frank Jotzo, 2019. "Closures of coal‐fired power stations in Australia: local unemployment effects," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 63(1), pages 142-165, January.
    19. Tim Nelson & Paul Simshauser & James Nelson, 2012. "Queensland solar feed-in tariffs and the merit-order effect: economic benefit, or regressive taxation and wealth transfers?," Economic Analysis and Policy, Elsevier, vol. 42(3), pages 277-301, December.
    20. David Klenert & Linus Mattauch & Emmanuel Combet & Ottmar Edenhofer & Cameron Hepburn & Ryan Rafaty & Nicholas Stern, 2018. "Making carbon pricing work for citizens," Nature Climate Change, Nature, vol. 8(8), pages 669-677, August.
    21. Priessner, Alfons & Hampl, Nina, 2020. "Can product bundling increase the joint adoption of electric vehicles, solar panels and battery storage? Explorative evidence from a choice-based conjoint study in Austria," Ecological Economics, Elsevier, vol. 167(C).
    22. Best, Rohan & Trück, Stefan, 2020. "Capital and policy impacts on Australian small-scale solar installations," Energy Policy, Elsevier, vol. 136(C).
    23. repec:hal:pseose:halshs-01109372 is not listed on IDEAS
    24. Florian Landis, 2019. "Cost distribution and equity of climate policy in Switzerland," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 155(1), pages 1-28, December.
    25. Tim Nelson & Paul Simshauser & Simon Kelley, 2011. "Australian Residential Solar Feed-in Tariffs: Industry Stimulus or Regressive Form of Taxation?," Economic Analysis and Policy, Elsevier, vol. 41(2), pages 113-129, September.
    26. Macintosh, Andrew & Wilkinson, Deb, 2011. "Searching for public benefits in solar subsidies: A case study on the Australian government's residential photovoltaic rebate program," Energy Policy, Elsevier, vol. 39(6), pages 3199-3209, June.
    27. Mir-Artigues, Pere & Cerdá, Emilio & del Río, Pablo, 2015. "Analyzing the impact of cost-containment mechanisms on the profitability of solar PV plants in Spain," Renewable and Sustainable Energy Reviews, Elsevier, vol. 46(C), pages 166-177.
    28. Grover, David & Daniels, Benjamin, 2017. "Social equity issues in the distribution of feed-in tariff policy benefits: A cross sectional analysis from England and Wales using spatial census and policy data," Energy Policy, Elsevier, vol. 106(C), pages 255-265.
    29. Petrovich, Beatrice & Hille, Stefanie Lena & Wüstenhagen, Rolf, 2019. "Beauty and the budget: A segmentation of residential solar adopters," Ecological Economics, Elsevier, vol. 164(C), pages 1-1.
    30. Sommerfeld, Jeff & Buys, Laurie & Mengersen, Kerrie & Vine, Desley, 2017. "Influence of demographic variables on uptake of domestic solar photovoltaic technology," Renewable and Sustainable Energy Reviews, Elsevier, vol. 67(C), pages 315-323.
    31. Sasse, Jan-Philipp & Trutnevyte, Evelina, 2019. "Distributional trade-offs between regionally equitable and cost-efficient allocation of renewable electricity generation," Applied Energy, Elsevier, vol. 254(C).
    32. Pascual, Unai & Muradian, Roldan & Rodríguez, Luis C. & Duraiappah, Anantha, 2010. "Exploring the links between equity and efficiency in payments for environmental services: A conceptual approach," Ecological Economics, Elsevier, vol. 69(6), pages 1237-1244, April.
    33. Dusonchet, L. & Telaretti, E., 2015. "Comparative economic analysis of support policies for solar PV in the most representative EU countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 986-998.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Best, Rohan & Burke, Paul J., 2023. "Small-scale solar panel adoption by the non-residential sector: The effects of national and targeted policies in Australia," Economic Modelling, Elsevier, vol. 120(C).
    2. Best, Rohan & Chareunsy, Andrea & Taylor, Madeline, 2023. "Changes in inequality for solar panel uptake by Australian homeowners," Ecological Economics, Elsevier, vol. 209(C).
    3. D'Adamo, Idiano & Gastaldi, Massimo & Morone, Piergiuseppe, 2022. "Solar collective self-consumption: Economic analysis of a policy mix," Ecological Economics, Elsevier, vol. 199(C).
    4. Best, Rohan & Marrone, Mauricio & Linnenluecke, Martina, 2023. "Meta-analysis of the role of equity dimensions in household solar panel adoption," Ecological Economics, Elsevier, vol. 206(C).
    5. Best, Rohan & Li, Han & Trück, Stefan & Truong, Chi, 2021. "Actual uptake of home batteries: The key roles of capital and policy," Energy Policy, Elsevier, vol. 151(C).
    6. Burlinson, Andrew & Davillas, Apostolos & Giulietti, Monica, 2023. "Socioeconomic Inequality in Low-Carbon Technology Adoption," IZA Discussion Papers 16114, Institute of Labor Economics (IZA).
    7. Best, Rohan, 2023. "Equitable reverse auctions supporting household energy investments," Energy Policy, Elsevier, vol. 177(C).
    8. Best, Rohan, 2022. "Energy inequity variation across contexts," Applied Energy, Elsevier, vol. 309(C).
    9. Best, Rohan & Hammerle, Mara & Mukhopadhaya, Pundarik & Silber, Jacques, 2021. "Targeting household energy assistance," Energy Economics, Elsevier, vol. 99(C).
    10. Best, Rohan & Chareunsy, Andrea, 2022. "The impact of income on household solar panel uptake: Exploring diverse results using Australian data," Energy Economics, Elsevier, vol. 112(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Best, Rohan & Li, Han & Trück, Stefan & Truong, Chi, 2021. "Actual uptake of home batteries: The key roles of capital and policy," Energy Policy, Elsevier, vol. 151(C).
    2. Best, Rohan & Trück, Stefan, 2020. "Capital and policy impacts on Australian small-scale solar installations," Energy Policy, Elsevier, vol. 136(C).
    3. Zander, Kerstin K., 2020. "Unrealised opportunities for residential solar panels in Australia," Energy Policy, Elsevier, vol. 142(C).
    4. Rohan Best & Paul J. Burke & Rabindra Nepal & Zac Reynolds, 2021. "Effects of rooftop solar on housing prices in Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(3), pages 493-511, July.
    5. Paul Simshauser & Tim Nelson & Joel Gilmore, 2022. "The sunshine state: implications from mass rooftop solar PV take-up rates in Queensland," Working Papers EPRG2219, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    6. Best, Rohan & Hammerle, Mara & Mukhopadhaya, Pundarik & Silber, Jacques, 2021. "Targeting household energy assistance," Energy Economics, Elsevier, vol. 99(C).
    7. Esplin, Ryan & Nelson, Tim, 2022. "Redirecting solar feed in tariffs to residential battery storage: Would it be worth it?," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 373-389.
    8. Lan, Haifeng & Gou, Zhonghua & Lu, Yi, 2021. "Machine learning approach to understand regional disparity of residential solar adoption in Australia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 136(C).
    9. Best, Rohan & Burke, Paul J. & Nishitateno, Shuhei, 2019. "Evaluating the effectiveness of Australia's Small-scale Renewable Energy Scheme for rooftop solar," Energy Economics, Elsevier, vol. 84(C).
    10. Zhang, Yanquan & Chang, Ruidong & Zuo, Jian & Shabunko, Veronika & Zheng, Xian, 2023. "Regional disparity of residential solar panel diffusion in Australia: The roles of socio-economic factors," Renewable Energy, Elsevier, vol. 206(C), pages 808-819.
    11. Sommerfeld, Jeff & Buys, Laurie & Vine, Desley, 2017. "Residential consumers’ experiences in the adoption and use of solar PV," Energy Policy, Elsevier, vol. 105(C), pages 10-16.
    12. Oliva H., Sebastian, 2017. "Residential energy efficiency and distributed generation - Natural partners or competition?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 76(C), pages 932-940.
    13. Best, Rohan & Chareunsy, Andrea, 2022. "The impact of income on household solar panel uptake: Exploring diverse results using Australian data," Energy Economics, Elsevier, vol. 112(C).
    14. Nelson, Tim & Pascoe, Owen & Calais, Prabpreet & Mitchell, Lily & McNeill, Judith, 2019. "Efficient integration of climate and energy policy in Australia’s National Electricity Market," Economic Analysis and Policy, Elsevier, vol. 64(C), pages 178-193.
    15. Best, Rohan & Burke, Paul J., 2022. "Effects of renting on household energy expenditure: Evidence from Australia," Energy Policy, Elsevier, vol. 166(C).
    16. Say, Kelvin & John, Michele & Dargaville, Roger, 2019. "Power to the people: Evolutionary market pressures from residential PV battery investments in Australia," Energy Policy, Elsevier, vol. 134(C).
    17. Simpson, Genevieve & Clifton, Julian, 2016. "Subsidies for residential solar photovoltaic energy systems in Western Australia: Distributional, procedural and outcome justice," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 262-273.
    18. Balta-Ozkan, Nazmiye & Yildirim, Julide & Connor, Peter M. & Truckell, Ian & Hart, Phil, 2021. "Energy transition at local level: Analyzing the role of peer effects and socio-economic factors on UK solar photovoltaic deployment," Energy Policy, Elsevier, vol. 148(PB).
    19. Lomas, J.C. & Muñoz-Cerón, E. & Nofuentes, G. & de la Casa, J., 2018. "Sale of profitable but unaffordable PV plants in Spain: Analysis of a real case," Energy Policy, Elsevier, vol. 117(C), pages 279-294.
    20. Shittu, Ekundayo & Weigelt, Carmen, 2022. "Accessibility in sustainability transitions: U.S. electric utilities’ deployment of solar," Energy Policy, Elsevier, vol. 165(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolec:v:180:y:2021:i:c:s0921800920304705. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolecon .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.