Victorian Energy Upgrades Cost of Living

Victorian Energy Upgrades

VCOSS response to Regulatory Impact Statement preliminary consultation

The Victorian Council of Social Service (VCOSS) welcomes preliminary consultation by the Department of Environment, Land, Water and Planning (DELWP) on its Regulatory Impact Statement (RIS) on the 2021 to 2025 Victorian Energy Upgrades (VEU) targets. We request DELWP takes the following matters into account in RIS development.

Uptake by low-income and vulnerable households

VCOSS is concerned the VEU program is under-used by people on low incomes, renters and people with health and disability related energy needs. We request DELWP analyses program use by low-income and vulnerable households and examines ways to increase uptake, including:

  • considering a separate target for low-income and vulnerable households
  • considering priority for certain energy efficiency items for low-income and vulnerable households, based on affordability and ability to transfer with people as they move homes
  • considering creating bonus certificates for low-income and vulnerable households
  • considering focusing the entire VEU program on low-income and vulnerable households.

Interaction with other energy programs and regulations

We suggest DELWP considers how the VEU program can be integrated with:

  • Victorian Government energy retrofit programs for low-income households, including any program expansion using the VEU program
  • the new payment difficulty framework for Victorian energy retailers, commencing 1 January 2019. This compels energy retailers to advise people with energy debts about any government assistance available to help them meet their energy costs, and provide practical assistance to help lower their energy costs (where they cannot pay ongoing energy costs in full)
  • Utility Relief Grant administration
  • the Victorian Government’s Solar Homes program
  • Federal programs, including the My Aged Care Home Support program and the National Disability Insurance Scheme, where people have health and disability related energy needs
  • new rental housing modification rights under the amended Residential Tenancies Act.

Household solar and energy efficiency

More people are installing solar panels on their homes, with costs coming down and payback periods relatively short[1]. The Solar Homes program will add another 700,000 solar installations. Many low-income and vulnerable people cannot afford subsidised solar, their homes are unsuitable, or they live without basic amenities such as insulation, window coverings and heating. DELWP should specifically consider energy efficiency benefits for such households.

DELWP should determine energy efficiency’s public health and safety benefits, whether combined with household solar or not. This includes reduced draughts, reduced mould from improved air circulation, reduced air-conditioner use where natural cooling measures are sufficient, and replacement of potentially dangerous appliances (e.g. portable heaters).

We also request DELWP examines the extent to which energy efficiency upgrades drive better household solar use for the energy system as a whole. This includes the wholesale pricing impact of increased solar exports and reduced grid consumption, and emerging opportunities for altruistic solar supply to community members.

Victorian Energy Upgrades costs

DELWP should determine whether residential customers experience net costs or benefits because of the VEU. This analysis should consider customers who participate in the VEU program and those who do not, and take into account increased retailer costs (as a result of VEU compliance), any network cost distribution changes, and any reductions in wholesale electricity prices due to lower consumption. DELWP should consider how to limit or remove these costs.

[1] Australian Energy Council, Solar Report, Quarter 2, 2018