Why we need to act.

Households across Australia are struggling with the rising cost of living. A major driver of this is energy bills, with average retail electricity tariffs for households increasing by over 20% at the beginning of July.[1] These energy price rises have been caused by Australia’s dependence on expensive fossil fuels, which spiked in price following Russia’s invasion of Ukraine.

The one third of Australians who rent are being hit especially hard. Rental properties have notoriously poor home energy performance [2], meaing they are too hot in summer, too cold in winter, and cost nearly 10% more to run.[3] These bills are on top of largest rent rises since 2009.[4]

With renewables by far the cheapest form of energy available, transitioning households away from expensive gas and towards more efficient electrical appliances – powered by rooftop solar – is key to addressing the cost-of-living crisis. [5] It's also a climate imperative, since action at the household-level the fastest way to decarbonise our energy system.

But many renters are locked-out of the opportunity to permanently reduce their power bills through improved home energy performance. They are dependent on their landlord to retrofit more efficient electrical appliances, install solar, and insulate the home – but landlords do not benefit financially from this. 

People living in apartments are also missing out, with government policy putting electrification of high-density areas in the ‘too hard’ basket.[6]

These challenges are particularly important for Wentworth, where 62% of dwellings are apartments and 45% are rented. 

What I'm doing about it.

*UPDATE* On 16th January 2024 the federal and NSW governments announced a big investment to help people in apartments get solar! This is a big win for Wentworth and follows over a year of advocacy. The Solar Banks scheme will invest $30 million, with rebates up to 50% for multi-unit buildings who put solar on the roof.

Stay tuned for details on how to access funding.

We've also had some other big wins in this parliament, with $1.3 billion in new federal funding to support home electrification. You can view the incentives your household is eligible for on my website here.

But we need to go further, with much more support for renters and apartment dwellers. I'm pushing the government for policy with a combination of carrots, sticks, and better information.

Sticks:

• Implement mandatory energy efficiency disclosures for rental properties, as the EU has had for over 20 years.[7] 
• Implement minimum energy performance standards for rentals as is currently in place in New Zealand and France.[8]
• Ban gas connections to new homes and put in place a roadmap for ending residential gas use.

Carrots: 

• Subsidise home energy assessments for rental properties to allow landlords to identify key energy performance improvements.
• Provide a tax incentive for landlords to replace gas appliances with more efficient electrical alternatives. Allowing landlords to instantly write-off the cost of installing heat pumps, induction cooktops and energy-efficient reverse cycle space heating would drive a 23% increase in rentals switching from gas to electric at budget cost of less than $50 million per year. When combined, these upgrades reduce energy bills by between $514 and $1,594 each year.[10] Such an approach could also be used to accelerate rooftop solar installation and insulation retrofits.
• Simplify the tax system to make it easier for people in apartments to access rooftop solar. 
• Launch the Solar Banks scheme in NSW so that owners’ corporations and community housing providers can access grants and zero-interest finance to install rooftop shared solar systems.

Information: 

• Create a ‘one stop shop’ that provides comprehensive information on federal, state, and local government incentives and explains how different households can electrify their homes.
• Fund detailed research on how best to electrify apartments

Watch and read.

• Sydney Morning Herald - The $50m idea that could save renters up to $1594 a year (link)
• SwitchedOn - Allegra Spender: Energy Ministers must prioritise renters (link)
• Question Time - Allegra Spender asks the Energy Minister to support renters and apartments (links)
• Canberra Times - "Good for cost of living": Government urged to act now on rental electrification (link)
• The Guardian - Energy Consumer Lobby call for Australia-wide ban on new gas connections (link)

Sources

[1] Australian Energy Regulator (2023). ‘Final determination for 2023–24 Default Market Offer’

[2] Climateworks Centre (2023). ‘Submission to NEPs Consultation’. Better Renting (2018). ‘Energy Efficiency of Rental Properties in the ACT’

[3] Burke and Best (2022). ‘Effects of renting on household energy expenditure: Evidence from Australia’

[4] ABS (2023). CPI, September 2023

[5] Grattan Institute (2023). ‘Getting off gas’; Climate Council (2022). ‘Switch and save:’; Rewiring Australia (2022). ‘Electrification is anti-inflationary’

[6] Owners Corporation Network (2023). ‘Profile of the strata sector’

[7] Under Directive 2002/91/EC, energy performance certificates (EPCs) are obtained at point of sale, lease and construction, and are provided to the occupant.

[8] This includes a number of regulatory mechanisms, including rental caps for poor performing properties and a total ban from renting the worst rated properties.

[9] PBO (2023). ‘Accelerating household electrification – Costing for Allegra Spender’; Climate Council (2022). ‘Switch and Save: How Gas is Costing Households’