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Using Income Contingent Loans for the Financing of the Next Million Australian Solar Rooftops

Author

Listed:
  • Kenneth G. H. Baldwin

    (The Energy Change Institute, The Australian National University)

  • Bruce Chapman

    (Crawford School of Public Policy, The Australian National University)

  • Umbu Raya

    (Crawford School of Public Policy, The Australian National University)

Abstract

Rooftop solar systems have two major benefits: a reduction of carbon emissions (a public good) and future energy bill savings for consumers. However, the availability of solar energy systems to low-income households is constrained by access to finance for the initial investment cost, an issue which could potentially be addressed with the use of income contingent loans (ICLs). By applying unconditional quantile econometric methods to HILDA income data we illustrate that for a $10,000 loan for home owners ICLs can be used with little or no cost to government to help finance the next one million solar energy devices.

Suggested Citation

  • Kenneth G. H. Baldwin & Bruce Chapman & Umbu Raya, 2015. "Using Income Contingent Loans for the Financing of the Next Million Australian Solar Rooftops," CCEP Working Papers 1508, Centre for Climate & Energy Policy, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:ccepwp:1508
    as

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    File URL: https://ccep.crawford.anu.edu.au/sites/default/files/publication/ccep_crawford_anu_edu_au/2015-08/ccep1508.pdf
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    References listed on IDEAS

    as
    1. Severance, Craig A., 2011. "A Practical, Affordable (and Least Business Risk) Plan to Achieve "80% Clean Electricity" by 2035," The Electricity Journal, Elsevier, vol. 24(6), pages 8-26, July.
    2. Paul Simshauser & Tim Nelson, 2014. "The Consequences of Retail Electricity Price Rises: Rethinking Customer Hardship," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 47(1), pages 13-43, March.
    3. Bruce Chapman & Timothy Higgins & Joseph E. Stiglitz (ed.), 2014. "Income Contingent Loans," International Economic Association Series, Palgrave Macmillan, number 978-1-137-41320-8, June.
    4. Philip Clarke & Bruce Chapman, 2014. "Internationalisation of ICLs to deal with Human Capital Trade Imbalances," International Economic Association Series, in: Bruce Chapman & Timothy Higgins & Joseph E. Stiglitz (ed.), Income Contingent Loans, chapter 11, pages 136-141, Palgrave Macmillan.
    5. Joseph E. Stiglitz, 2014. "Remarks on Income Contingent Loans: How Effective can they be at Mitigating Risk?," International Economic Association Series, in: Bruce Chapman & Timothy Higgins & Joseph E. Stiglitz (ed.), Income Contingent Loans, chapter 2, pages 31-38, Palgrave Macmillan.
    6. Bruce Chapman & Tim Higgins, 2009. "Income Contingent Loans for Mature Aged Training," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 12(2), pages 167-179.
    7. Bruce Chapman & Linda Courtenay Botterill, 2009. "A Revenue Contingent Loan Instrument for Agricultural Credit with Particular Reference to Drought Relief," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 12(2), pages 181-196.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    income contingent loans; solar energy;

    JEL classification:

    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • Q27 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Issues in International Trade

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