The impact of government ideology and policy incentives on residential solar adoption and returns on household energy costs in Australia

Manh-Tien Bui presents his research on political economy of solar PV in Australia.

This study investigates the effects of government ideology, partisan alignment, and major policy incentives namely the Small-Scale Renewable Energy Scheme (SRES) and Feed-in Tariffs (FiTs), on household solar uptake and its subsequent impact on energy expenditure. Utilizing a panel dataset of 137 Australian Local Government Areas (LGAs) from 2006 to 2023, this research found that both SRES and FiTs effectively stimulated solar PV adoption, with FiTs exhibiting a stronger influence. Uptake was substantially higher under Labor governments, particularly when federal and state governments were politically aligned. Solar adoption led to significant reductions in household energy expenditure, translating to meaningful bill relief. However, heterogeneity analysis reveals these benefits were unevenly distributed across income levels.

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