Australian households could save as much as $4,300 a year by switching to solar panels, installing batteries and driving an electric car, according to Treasury modelling, though renters may miss some of those benefits.
The new analysis was included as part of the Climate Change Authority’s recommendation that the government pursue a 2035 emissions reduction target of 62-70%.
Treasury also concluded that an “orderly transition” towards net zero would leave wholesale electricity prices 10% below the historical average, and warned that power costs would be substantially higher over the coming decades if action to reduce emissions were delayed or even scrapped.
Chris Bowen, the climate change and energy minister, seized on the modelling, saying it backed the argument “that action on climate change and action on cost of living is not a choice”.
“What’s good for your pocket is also good for the planet,” Bowen said.
The Treasury analysis showed that a typical household over the longer term could cut their energy cuts by $1,000 a year by electrifying their household appliances, heating and hot water systems – even after accounting for upfront costs.
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Also installing solar panels, a home battery and driving an EV could slash the energy bills by about 40%, or $4,300 a year – again after accounting for the purchase, installation and financing costs.
The opposition leader, Sussan Ley, was quick to dismiss the modelling as a “fantasy” that would be proved as wrong as Labor’s 2022 commitment to reduce power bills by $275.
Wary of tying the government to a precise number, Bowen said the latest prediction of lower energy costs under a net zero transition was “not a political promise”.
“It’s a statement of modelling by expert agencies.”
Alison Reeve, the director of the Grattan Institute’s energy and climate change program, agreed that the push to renewable energy and electrification would deliver both a greener economy and cheaper power bills.
The exact savings were hard to predict, but “the thrust of it is right”.
“It’s already really clear how people have benefited from this transition over the past decade, and that’s a really positive story,” she said.
Many Australians already have a stake in the clean energy transition.
About 4.2m homes have installed rooftop solar systems, or about 40% of all the households, alongside 271,000 battery systems, according to Bloomberg.
Reeve said the challenge now was to ensure that all households were able to benefit from electrification.
“If you’re renting, it’s hard to access these savings. Battery rebates are great, but we still have one-third of households who rent and who can’t even get rooftop solar,” she said.
“There has to be a real focus to make sure it’s not just well-off homeowners who benefit from that electrification story.”
