Subsidies for Alternative Energy Affecting Lower Income Group?

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When most of the countries are analyzing the positives of solar energy sources Australia is debating about the increased electricity charges. Australian consumers seem to deal with energy poverty. While not all are affected by it, lower income group in the country are definitely familiar with it.

The country is blessed with vast landscapes suitable for trapping renewable energy. Like many other Governments across the world, Australian Government and other organizations are investing more in tapping the renewable’s potential.

Energy poverty, as defined by Australia, is when one has to spend more than 10 percent of the (disposable) income on energy usage. This situation in Australia is mainly due to the hike in electricity prices. The question that many Australians are asking now is do they really have such an energy crisis or energy shortage in their country.

The main reason for such an increase seems to the investments in Renewable Energy Target (RET) and increase in carbon tax. It has been assumed that if a huge investment was not provided for alternative energy promotion, electricity charges would not have been hiked and would be the normal rates as before.

Carbon pollution

Richard Denniss, executive director of The Australia Institute states that most of the electricity price hike is due to inefficient working methods of the energy companies. He says that the national electricity market’s wrong assumptions and more-than-required investment in poles and wires have taken the country to such a situation.

Energy companies have believed that they will see an increase in demand. As per the Australian Energy Markets Commission, the about 4 percent price rise is expected because of the programs for renewables energy source promotion. Along with the carbon tax, a total of 13 percent would be estimated for the 100 percent hike in energy prices. 87 percent can be accounted for the infrastructure cost which is around $45 billion.


As per the reports by University of Sydney, the price hikes in electricity charges are affecting the lower income group of Australia extremely high. The problem is found to be increasing over the years.

As per Dr Lynne Chester who studied the crisis, around 3.5 million families are affected by the electricity price hikes. He says this seems to be a growing problem which needs to be dealt with as soon as possible. The households getting affected by the hikes are major the lowest income groups. He also said that the lower income households would find it difficult to cut their energy usage.

Options Available

As most of the Australians face the brunt of the price hike, there are a few options that could support them now and in the coming years. As the price of solar panels systems are falling, it would be a good option to switch, at least partially, to solar panels. People could cut their electricity bills by about 30 percent by supporting them with solar energy.

It is expected that solar batteries may become more efficient in terms of storing unused solar energy. Once this works out, trapping, using and storing solar energy would not be a problem at all.

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