Persistent energy poverty for renters motivates policy reform

Energy poverty can be pronounced in a cost-of-living crisis, especially when combined with housing-cost pressure for renters. In Australia, energy poverty has been a persistent problem for over a decade, especially for renters. This paper uses four different Australian household surveys covering 2012–2024 to decompose energy poverty gaps between housing renters and non-renters. We find that the capacity to make investments explains up to 45 % of the difference in difficulty paying bills between renters and non-renters. Assets explain approximately a third of the renter-homeowner difference and are substantially more important than income. Renters being less likely to have solar panels explains a small proportion of the gap for bill-paying difficulty. These three results imply three different foci beyond past policies. Governments can use more investment support to complement income support, means testing can focus more on assets rather than income, and policies can support bundles of investments and not just one aspect such as solar panels.