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

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Listed:
  • 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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    More about this item

    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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