Searching for public benefits in solar subsidies: A case study on the Australian government's residential photovoltaic rebate program

Abstract

The Australian Government ran a renewable energy program in the 2000s that provided rebates to householders who acquired solar Photovoltaic (PV) energy systems. Originally called the Photovoltaic Rebate Program (PVRP), it was rebranded the Solar Homes and Communities Plan (SHCP) in November 2007. This paper evaluates both the PVRP and SHCP using measures of cost-effectiveness and fairness. It finds that the program was a major driver of a more than six-fold increase in PV generation capacity in the 2000s, albeit off a low base. In 2010, solar PV's share of the Australian electricity market was still only 0.1%. The program was also environmentally ineffective and costly, reducing emissions by 0.09MtCO2-e/yr over the life of the rebated PV systems at an average cost of between AU$238 and AU$282/tCO2-e. In addition, the data suggest there were equity issues associated with the program, with 66% of all successful applicants residing in postal areas that were rated as medium-high or high on a Socio-economic Status (SES) scale. Show more