Efficiency, electrification, and solar could save low-income households up to $6000

2 May 2024

A new analysis commissioned by ACOSS reveals people on low-incomes could save up to $6,000 annually on their home energy bills with thermal efficiency upgrades, electrification and rooftop solar.

The average household in Victoria could save $4,053 annually on their energy bill and those in apartments $2,276. The savings for NSW residents living in a house could amount to $3,373 and $2,333 for people in apartments.

People in the ACT could save up to $5,975, annually, according to the new analysis based on Climateworks Centre modelling. Tasmanians could save up to $4,123, South Australians up to $4,123, Queenslanders up to $2,740 and West Australians up to $2,865.

The calculation is based on savings from ‘quick-fix’ home energy upgrades, such as improving insulation and installing electric heat pumps and additional savings from installing rooftop solar. The cost saving calculations are based on the type of dwelling, gas and electricity prices across states and the amount of energy needed to keep homes at a comfortable temperature (20C).

ACOSS is urging the federal government to establish a national fund to subsidise home energy upgrades for low-income housing in the May budget and work with states to implement minimum energy performance rental standards, to curb energy hardship, reduce emissions and make homes resilient to climate change.

Five of the 10 electorates that would benefit the most are in South Australia, with the rest across Victoria and Tasmania. For example, upgrading all households in the lowest 20% income group would produce an annual electorate-wide energy bill saving of $44.3 million for the seat of Grey, followed by $42 million for Barker and $40 million for Mallee.

ACOSS CEO Dr Cassandra Goldie AO said:

“Poor energy performing homes are costing households thousands of dollars each year and contributing to climate change. Millions of people on low incomes, including income support, are sweltering through summer and freezing through winter because they cannot afford to keep their homes at a healthy temperature.

“They are forced to choose between eating, paying for medicine or their energy bill. Recent ACOSS surveys found eight in 10 people became unwell because they could not keep their homes cool during extreme heat. People on low-incomes and renters cannot afford or don’t have the choice to do home energy upgrades.

“The government is investing heavily in large-scale energy, industry and manufacturing as part of a clean energy package to tackle the climate crisis. A commensurate funding package to support households and communities to participate in and benefit from the transition is critical to build social licence and ensure no-one is left behind.

“We are calling on the federal government to inject an additional $2 billion over four years – matched by the states and territories, and topped up by other sources – to accelerate and scale up energy upgrades for low-income housing.

“The government has a once-in-a-generation opportunity in this budget to reduce energy poverty, improve people’s health and tackle the climate crisis.”

Annual savings by stateAverage bill savings - house

(Quick-fix, thermal efficiency, electrification and rooftop solar)
Average bill savings - apartments

(Quick-fix thermal efficiency, electrification and rooftop solar)
Australia total$3,487$2,376
South Australia$4,123$2,376
Western Australia$2,865$2,596
ElectorateTotal bill savings from low-income housing upgrades
Grey (SA)$44.2 million
Barker (SA)$42 million
Mallee (Vic)$40 million
Spence (SA)$39 million
Braddon (Tas)$36.7 million
Gippsland (Vic)$36.3 million
Mayo (SA)$35 million
Lyons (Tas)$34.3 million
Hindmarsh (SA)$33.8 million
Monash (Vic)$33.8 million

ACOSS is calling for the federal government to accelerate home energy upgrades for low-income housing:

  • Establish a Special Purpose Funding Vehicle, with an initial Federal Government injection of $2 billion over four years matched by the States and Territories to invest in home energy upgrades, tailored across low-income housing tenure types. Use the funds to do the following
    • Top up the existing $300 million social housing energy upgrade funds targeting only 15% of social housing, so that all social housing dwellings have home energy upgrades by 2030/31. Prioritise funding to upgrade First Nations Housing.
    • Provide assistance for low-income owner occupiers through a combination of subsidies and zero-interest loans to undertake home energy upgrades by 2030/31.
    • Upgrade private rental properties through a combination of mandatory energy performance rental standards and conditional incentives via combination of subsidies, concessional loans and rental caps.

Analysis was undertaken by Springmount Advisory.

More information: https://www.fairfastclimateaction.org.au/the_benefits_of_home_energy_upgrades