Energy upgrade targets – putting low-income households first

There’s been a flurry of attention this week on proposed changes to the Victorian Energy Upgrades (VEU) program.

VCOSS supports the targets proposed by a Victorian Government consultation paper.

The Government estimates that an energy upgrade would save participating households over $100 a year, but the program would cost non-participating households a small amount – about $2 a year.

The main improvement that would make this initiative fairer is a greater focus on low-income households. These are the households most likely to live in energy inefficient homes, with high electricity bills they can’t afford.

Lower energy bills would be a welcome relief for this group, but the high up-front costs of energy efficiency upgrades can be too much. High-tech appliances and double-glazed windows are expensive and often out of reach.

We suggest introducing a sub-target to the VEU program that would prioritise and boost the number of low-income households participating in the scheme. Similar targets exist in South Australia and the ACT, and they work.

We shouldn’t forget renters either. Half of all households living below the poverty line are renting, and renters generally spend a higher proportion of their income on energy bills while being less likely than home-owners to live in energy efficient housing. The 31 per cent of Victorians who rent should be part of the priority group to make sure they don’t miss out.

Meanwhile, the cost barrier can be tackled by bigger subsidies and no-interest loans for Victorians who wouldn’t otherwise be able to afford upgrades.

With talk about high-cost upgrades like solar panels and electric hot water systems becoming part of the program, and less focus on more affordable improvements like energy efficient lightbulbs, subsidies will be essential to help low-income Victorians participate.

VCOSS supports the VEU program but thinks these tweaks could help low-income households and renters further. No matter what, people who are struggling shouldn’t be left behind. We want as many Victorians as possible saving on their energy bills and living in safe, comfortable homes.