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Evaluating the effectiveness of Australia’s Small-scale Renewable Energy Scheme for rooftop solar

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  • Rohan Best

    (Department of Economics, Macquarie University)

  • Paul J Burke

    (Crawford School of Public Policy, Australian National University)

  • Shuhei Nishitateno

    (School of Policy Studies, Kwansei Gakuin University)

Abstract

Australia has among the highest rates of small-scale solar photovoltaic adoption in the world, with substantial geographical variation in uptake. Using postcode-level data up to December 2018, we quantify the impact of Australia’s spatially-differentiated Small-scale Renewable Energy Scheme on solar uptake. We use spatial autoregressive models and other approaches such as a regression discontinuity design. The results indicate that postcodes receiving a higher subsidy factor have significantly more small-scale solar installations, after controlling for solar exposure and spatial patterns in the data. The subsidy elasticity of small-scale solar capacity installations during 2018 was around 1.2. We use this estimate to calculate that an increase in the subsidy flowing to new installations would be able to reduce carbon dioxide emissions at a subsidy cost of around US$36 per tonne, depending on assumptions.

Suggested Citation

  • Rohan Best & Paul J Burke & Shuhei Nishitateno, 2019. "Evaluating the effectiveness of Australia’s Small-scale Renewable Energy Scheme for rooftop solar," CCEP Working Papers 1903, Centre for Climate & Energy Policy, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:ccepwp:1903
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    Cited by:

    1. Paul Simshauser & Tim Nelson & Joel Gilmore, 2022. "The sunshine state: implications from mass rooftop solar PV take-up rates in Queensland," Working Papers EPRG2219, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    2. Best, Rohan & Burke, Paul J., 2022. "Effects of renting on household energy expenditure: Evidence from Australia," Energy Policy, Elsevier, vol. 166(C).
    3. Best, Rohan & Burke, Paul J., 2023. "Small-scale solar panel adoption by the non-residential sector: The effects of national and targeted policies in Australia," Economic Modelling, Elsevier, vol. 120(C).
    4. Rohan Best & Paul J. Burke & Rabindra Nepal & Zac Reynolds, 2021. "Effects of rooftop solar on housing prices in Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(3), pages 493-511, July.
    5. Best, Rohan & Li, Han & Trück, Stefan & Truong, Chi, 2021. "Actual uptake of home batteries: The key roles of capital and policy," Energy Policy, Elsevier, vol. 151(C).
    6. Csereklyei, Zsuzsanna & Kallies, Anne, 2022. "A legal-economic framework of electricity markets: Assessing Australia’s transition," MPRA Paper 114191, University Library of Munich, Germany.
    7. Best, Rohan & Sinha, Kompal, 2021. "Fuel poverty policy: Go big or go home insulation," Energy Economics, Elsevier, vol. 97(C).
    8. Balta-Ozkan, Nazmiye & Yildirim, Julide & Connor, Peter M. & Truckell, Ian & Hart, Phil, 2021. "Energy transition at local level: Analyzing the role of peer effects and socio-economic factors on UK solar photovoltaic deployment," Energy Policy, Elsevier, vol. 148(PB).
    9. Best, Rohan & Trück, Stefan, 2020. "Capital and policy impacts on Australian small-scale solar installations," Energy Policy, Elsevier, vol. 136(C).
    10. Hansen, Anders Rhiger & Jacobsen, Mette Hove & Gram-Hanssen, Kirsten, 2022. "Characterizing the Danish energy prosumer: Who buys solar PV systems and why do they buy them?," Ecological Economics, Elsevier, vol. 193(C).
    11. Tong Zhang, Paul J. Burke, and Qi Wang, 2024. "Effectiveness of electric vehicle subsidies in China: A three-dimensional panel study," Departmental Working Papers 2024-1, The Australian National University, Arndt-Corden Department of Economics.
    12. Best, Rohan & Chareunsy, Andrea, 2022. "The impact of income on household solar panel uptake: Exploring diverse results using Australian data," Energy Economics, Elsevier, vol. 112(C).
    13. Boroomandnia, Arezoo & Rismanchi, Behzad & Wu, Wenyan, 2022. "A review of micro hydro systems in urban areas: Opportunities and challenges," Renewable and Sustainable Energy Reviews, Elsevier, vol. 169(C).
    14. Budhavarapu, Jayaprakash & Thirumala, Karthik & Mohan, Vivek & Bu, Siqi & Sahoo, Manoranjan, 2022. "Tariff structure for regulation of reactive power and harmonics in prosumer-enabled low voltage distribution networks," Energy Economics, Elsevier, vol. 114(C).
    15. Sheykhha, Siamak & Borggrefe, Frieder & Madlener, Reinhard, 2022. "Policy implications of spatially differentiated renewable energy promotion: A multi-level scenario analysis of onshore wind auctioning in Germany," Energy Policy, Elsevier, vol. 169(C).
    16. Esplin, Ryan & Nelson, Tim, 2022. "Redirecting solar feed in tariffs to residential battery storage: Would it be worth it?," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 373-389.
    17. Zander, Kerstin K., 2020. "Unrealised opportunities for residential solar panels in Australia," Energy Policy, Elsevier, vol. 142(C).
    18. Best, Rohan & Chareunsy, Andrea & Li, Han, 2021. "Equity and effectiveness of Australian small-scale solar schemes," Ecological Economics, Elsevier, vol. 180(C).
    19. Arnold, Fabian & Jeddi, Samir & Sitzmann, Amelie, 2022. "How prices guide investment decisions under net purchasing — An empirical analysis on the impact of network tariffs on residential PV," Energy Economics, Elsevier, vol. 112(C).
    20. Wu, Haixia & Ge, Yan & Li, Jianping, 2023. "Uncertainty, time preference and households’ adoption of rooftop photovoltaic technology," Energy, Elsevier, vol. 276(C).
    21. Prasad, Abhnil Amtesh & Nishant, Nidhi & Kay, Merlinde, 2022. "Dust cycle and soiling issues affecting solar energy reductions in Australia using multiple datasets," Applied Energy, Elsevier, vol. 310(C).
    22. Do, Thang Nam & Burke, Paul J. & Baldwin, Kenneth G.H. & Nguyen, Chinh The, 2020. "Underlying drivers and barriers for solar photovoltaics diffusion: The case of Vietnam," Energy Policy, Elsevier, vol. 144(C).

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    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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