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

Author

Listed:
  • 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.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:ecanpo:v:41:y:2011:i:2:p:113-129
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    More about this item

    Keywords

    Feed-in Tariffs; Electricity Prices;

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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