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Australian Residential Solar Feed-in Tariffs: Industry Stimulus or Regressive Form of Taxation?

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  • Tim Nelson
  • Paul Simshauser
  • Simon Kelley

    ()
    (AGL Energy Ltd, Level 22, 101 Miller Street, North Sydney, NSW, 2060)

Abstract

Feed-in Tariffs (FiT) for residential photovoltaic solar technologies are available in most Australian jurisdictions. Financial incentives under FiT are in addition to those provided by the Small-Scale Renewable Energy Scheme which forms part of the national 20% Renewable Energy Target. Little attention has been paid to the welfare impacts of FiT on retail electricity prices and social policy objectives. Our analysis indicates that current FiT are a regressive form of taxation. By providing estimates of household impact by income groupings, we conclude that wealthier households are beneficiaries and the effective taxation rate for low income households is three times higher than that paid by the wealthiest households.

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Bibliographic Info

Article provided by Queensland University of Technology (QUT), School of Economics and Finance in its journal Economic Analysis and Policy (EAP).

Volume (Year): 41 (2011)
Issue (Month): 2 (September)
Pages: 113-129

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Handle: RePEc:eap:articl:v:41:y:2011:i:2:p:113-129

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Related research

Keywords: Feed-in Tariffs; Electricity Prices;

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References

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  1. Simshauser, Paul & Nelson, Tim & Doan, Thao, 0. "The Boomerang Paradox, Part I: How a Nation's Wealth Is Creating Fuel Poverty," The Electricity Journal, Elsevier, vol. 24(1), pages 72-91, January.
  2. Tim Nelson & Simon Kelley & Fiona Orton & Paul Simshauser, 2010. "Delayed Carbon Policy Certainty and Electricity Prices in Australia," Economic Papers, The Economic Society of Australia, vol. 29(4), pages 446-465, December.
  3. Paul Simshauser, 2011. "The Hidden Costs of Wind Generation in a Thermal Power System: What Cost?," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 44(3), pages 269-292, 09.
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Cited by:
  1. Bell, William, 2012. "Reviewing the climate change adaptation readiness of the Australian national electricity market institutions," MPRA Paper 38112, University Library of Munich, Germany, revised 29 Feb 2012.
  2. John Foster & William Paul Bell & Phil Wild & Deepak Sharma & Suwin Sandu & Craig Froome & Liam Wagner & Suchi Misra & Ravindra Bagia, 2013. "Analysis of institutional adaptability to redress electricity infrastructure vulnerability due to climate change," Energy Economics and Management Group Working Papers 6-2013, School of Economics, University of Queensland, Australia.
  3. Liam Byrnes & Colin Brown & John Foster & Liam Wagner, 2013. "Australian Renewable Energy Policy: Barriers and Challenges," Energy Economics and Management Group Working Papers 2-2013, School of Economics, University of Queensland, Australia.
  4. McConnell, Dylan & Hearps, Patrick & Eales, Dominic & Sandiford, Mike & Dunn, Rebecca & Wright, Matthew & Bateman, Lachlan, 2013. "Retrospective modeling of the merit-order effect on wholesale electricity prices from distributed photovoltaic generation in the Australian National Electricity Market," Energy Policy, Elsevier, vol. 58(C), pages 17-27.
  5. John Foster & William Paul Bell & Craig Froome & Phil Wild & Liam Wagner & Deepak Sharma & Suwin Sandu & Suchi Misra & Ravindra Bagia, 2012. "Institutional adaptability to redress electricity infrastructure vulnerability due to climate change," Energy Economics and Management Group Working Papers 7-2012, School of Economics, University of Queensland, Australia.
  6. Nelson, Tim & Nelson, James & Ariyaratnam, Jude & Camroux, Simon, 2013. "An analysis of Australia's large scale renewable energy target: Restoring market confidence," Energy Policy, Elsevier, vol. 62(C), pages 386-400.
  7. Bell, William & Foster, John, 2012. "Feed-in tariffs for promoting solar PV: progressing from dynamic to allocative efficiency," MPRA Paper 38861, University Library of Munich, Germany, revised 28 Apr 2012.
  8. 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 (EAP), Queensland University of Technology (QUT), School of Economics and Finance, vol. 42(3), pages 277-301, December.

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