Low income households miss out on energy savings: report

BSL recommends changes to Energy Saver Incentive Scheme 

A report by the Brotherhood of St Laurence on the Victorian Energy Saver Incentive scheme concluded that more support is needed for low-income households.

As households struggle with rising energy prices, a State Government scheme providing free light-globes and shower heads contributed to power-saving improvements in close to half a million households across Melbourne. A Brotherhood of St Laurence report has found more disadvantaged suburbs benefited most from the Victorian Energy Savings Initiative.

‘’Households seized the opportunity to save money by improving their energy efficiency, cuttings emissions and a result saved money on their energy bills, said John Thwaites, chair of the Brotherhood’s equity in response to climate change program.

‘’Most of the savings, which on average were estimated to be $60 a year for each household over the first five years, came from upgrading incandescent light-globes to compact fluorescent light-globes.’’

Under the Victorian Energy Saver Incentive scheme power companies and other businesses offer householders special deals on energy-saving devices, ranging from the free light-globes to discounted solar hot water systems, in a bid to cut greenhouse gas emissions by reducing power use.

Mr Thwaites was releasing the Brotherhood’s “The power to save” report, on the fairness of the scheme in different income groups in Melbourne. It analysed the pattern of installation of light-globes, showerheads, and some of the big appliances such as solar hot water systems, during the first phase of the scheme, over three years to 2011. In Melbourne over that time 471,091 households received home improvements.

“The scheme is a great way for households to cut greenhouse gas emissions and energy bills by reducing power use in the home,” he said. “And with some changes to the scheme low-income households could benefit more by being able to access the more expensive appliances that save more energy.

“Most of the savings came from upgrading to compact fluorescent light-globes. However, the report also found that households in better off suburbs were more likely to acquire big-ticket items such as solar hot water services or space heaters, which make larger energy savings per household than do light-globes.

“Many low-income households would miss out on these items because even with the discount they still have an upfront cost of hundreds or thousands of dollars. They simply can’t afford to stump up that sort of money.

“Yet because on average they spend a bigger chunk of their disposable income on energy bills, they would enjoy more relief in their household budget if they were able to further cut power use.

“The Victorian Government should investigate the viability of on-bill financing – paying for the energy-saving item over extended terms on their power bills – and low-interest loans. Both have the potential to help these households pay for upgrades that will save them money down the track.

“It could also introduce additional financial incentives for low-income households. This could be achieved by expanding existing Sustainability Victoria rebates for energy-saving measures in the home.

“Some similar schemes oblige energy companies to ensure that the benefits are shared more fairly, usually by requiring that a percentage of the savings are achieved in specific types of households. In South Australia the Residential Energy Efficiency Scheme includes a priority group of households with a pension concession or health care card. The Victorian scheme has no such requirements.”

Mr Thwaites said the Federal Government was also investigating a national energy savings initiative, and should ensure that low-income households are able to upgrade to items such as solar hot-water systems.

Download “The power to save” report. (PDF file, 634 KB)