How to make Australia's clean energy transition fair for all

It’s no secret that with well over one million solar households, decentralised energy solutions like rooftop solar have started to change the Australian market significantly. Communities have embraced clean energy and the genie cannot be put back into the bottle. Indeed, the introduction of low-cost solar PV, battery storage, energy control and management systems and energy efficiency measures provide an unprecedented opportunity for energy consumers to participate in the energy system.
However, it is crucial to ensure that all Australians are able to participate and benefit from the transition to renewable energy. Certainly, solar PV is not just for the wealthy, as some political commentators would have us believe. But, while lower- and middle-income households have embraced solar, Australia’s lowest income houses have been least able to access solar PV to date.
People come together in cooperatives to do the right thing, get to know each other, and create a sense of community. (Photo by Black Rock Solar, modified, CC BY 2.0)
What is more, renters, apartment dwellers and homeowners also face issues accessing solar due to a lack of roof access, unsuitable roofs or split incentives. Those issues won’t be solved by the market without policy intervention.
In the lead up to the COAG Energy Council meeting in mid-August a number of stakeholders are urging for a transformation of current energy market arrangements. They call on the Council to modernise the energy market to support further clean energy growth, remove barriers and set up a roadmap for the energy transition, such as is detailed in the Homegrown Powerplan. Additionally, the meeting is seen as an opportunity to endorse the new clean energy initiatives of different states, including Victoria, Queensland and the ACT.
Although it is not explicitly mentioned within the National Electricity Objective (yet), Community Power Agency (CPA) believes it is in the long-term interests of consumers that Australia’s energy market transition occurs as equitably and fairly as possible.
Consequently, considerations on how to integrate clean energy solutions into the grid must be complemented by policies to ensure that no consumers are left behind or left to shoulder the burden of the centralised energy system while other consumers enjoy the benefits of a more decentralised energy system.
A recent project led by CPA and funded by Energy Consumers Australia has specifically tackled the question of how the transition to clean energy can occur in a fair and equitable manner. Rather than trying to stop clean energy innovation at a consumer level, CPA believes that this requires greater levels of clean energy innovation that bring together government, consumer advocates, consumers, clean energy providers and traditional energy actors.
Using a stakeholder feedback process, the project has identified a range of clean energy models that make clean energy solutions – energy efficiency, solar PV, etc – accessible and affordable to those customer segments currently facing market barriers.
For example, the issue of prohibitive upfront costs of clean energy technology and solutions can be addressed through the implementation of rent-based and rate-based finance models. Households could pay back the cost of clean energy measures through their council rate or rent, provided it would make a positive difference on their electricity bill.
Another example is the Solar Garden model, popular in the US. This holds the potential to become a key strategy in preventing the Death Spiral for industry incumbents. Solar Gardens create a win-win situation by enabling customers to benefit from distributed energy technologies, while maintaining some degree of grid utilisation. This, in-turn, could reduce grid defection by energy customers, thus maintaining network revenue and avoiding a situation where charges have to be increased so that sunk infrastructure costs can be recouped from the small group of customers who remain connected, including the most vulnerable.
These models won’t work without policy intervention, yet they represent the missing piece of the puzzle to make clean energy accessible to all. Hence the COAG Energy Council meeting should take
note of existing opportunities that are in the interest of all energy customers.
Please find the project outcomes and policy recommendations on CPA’s website: all-resources/
Franziska Mey is a director of the Community Power Agency

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