Keeping the lights on - a community capacity perspective
With all the media attention on energy policy over the last few months, we thought we would take a look at the issue from a social impact perspective. While the ‘coal vs renewables’ debate is the noisiest and crowded part of the conversation, it has been largely left to a few of the larger NGOs to advocate for those who really face the brunt of rising power bills—people and families on low incomes, the long-term unemployed those living with disabilities or chronic health conditions, pensioners, students amongst others.
A joint report recently released by The Climate Institute, ACOSS and The Brotherhood of St Laurence titled ‘Empowering disadvantaged households to access affordable, clean energy’ explored issues such as:
electricity costs as a proportion of household income
ability to make payments
disconnections
energy rationing
access to energy efficient technology.
With around 3 million people living below the poverty line in Australia, ‘keeping the lights on’ is as much a test of people’s financial position as it is about where their power comes from.
Policy responses need to include a focus on better informed consumers, more energy efficient households and increasing the financial capacity of households to meet (e.g. higher incomes and concessions). ‘Putting downward pressure on prices’ is almost code for ‘this may work’.
As an example, the deregulation of the Queensland retail electricity market in mid-2016 promised cheaper retail electricity prices through increased competition. It is acknowledged that many disadvantaged and vulnerable consumers are less likely to fully participate in the deregulated market and secure lower prices. This can be due to limited energy literacy and knowledge about navigating what is a fairly complex environment.
Similarly, low-income households are less able to productively reduce their power bills by becoming more energy efficient. These barriers include:
owning cheaper, older appliances that consume more energy
living in poorly insulated houses that require more power for heating in winter and cooling in summer
being long-term renters or living in public housing, which means they are restricted or dis-incentivised to upgrade their home
having limited financial capacity to invest in rooftop solar, battery storage, newer energy-efficient appliances and other technology that enables energy usage monitoring.
There are a range of relatively simple support mechanisms possible that could help to tackle those barriers listed above. Local initiatives that engage directly with vulnerable and disadvantaged households can support can result in improved energy efficiency and lower electricity costs. These include:
assisting households to make informed energy decisions, such as understanding their current electricity provider’s deal and navigating the energy retail market to find a better deal
understanding in-home energy consumption to identify opportunities for greater energy efficiency
supporting energy efficiency through no- or low-interest loans for energy-efficient appliances
incentivising property investors to make energy efficiency upgrades that benefit low-income renters.
Obviously none of these strategies are as effective as bringing people and families out of poverty by reducing social disadvantage. For the time being, any intervention that successfully reduces energy costs for low income households will allow for spending on other vital living expenses, foster financial independence and minimise stress and other health issues arising from financial problems.
This report isn’t the first that has explored the impact of energy costs on disadvantaged and low-income households, and it certainly won’t be the last. As with any report, there is a real risk that its recommendations are overlooked in favour of short-term political fixes. Let’s hope that it helps contribute to policy and programme action with continued advocacy from the social sector.