Push to make rental properties ready for portable power future

Lead

Renters make up nearly a third of Australian households, yet many are missing out on energy upgrades – such as insulation, appliances and rooftop solar – that could slash their power bills and improve home comfort, according to an analysis by the Institute for Energy Economics and Financial Analysis (IEEFA). The problem, the institute says, is landlords’ lack of motivation.

“The responsibility to do a lot of these household energy upgrades – to install insulation, to change out appliances like heaters and hot water systems – rests with the landlord,” energy finance analyst Jay Gordon said. “But because they don’t get the energy bill savings, there’s essentially no financial motivation for them to do it.”

This “split incentive” was the root cause behind the lower rates of insulation in rental properties, according to the IEEFA analysis. Research from Energy Consumers Australia this week found the split incentive explained why 44% of owner-occupiers had solar compared with 11% of renters.

Coverage comparison

Coverage of the issue has come from two outlets: Australia’s ABC and The Guardian. ABC’s report focuses on the campaign for renters to “plug in” to portable energy solutions, while The Guardian’s coverage highlights the “split incentive” problem and the potential for regulation. Both agree on the core problem: rental homes are less energy efficient than owner-occupied homes, and the disparity is particularly acute in low-income and regional areas.

ABC reports that the NSW government is exploring minimum energy efficiency standards for rental properties, arguing that even simple measures like insulation could slash energy bills by up to $750 a year. The Guardian notes that Victoria has already introduced minimum energy efficiency standards for rental properties, set to take effect from March next year.

Key claims

• Rental homes are significantly less energy efficient than owner-occupied homes, with the disparity particularly acute in low income and regional areas, as reported by ABC.
• The split incentive is the root cause of lower rates of insulation in rental properties, according to IEEFA analysis, as reported by The Guardian.
• 44% of owner-occupiers have solar compared with 11% of renters, according to Energy Consumers Australia research, as reported by The Guardian.
• IEEFA modelled that energy efficiency measures could save renters $20bn within a decade and $107bn by 2050, though the savings would outweigh capital costs, as reported by The Guardian.
• The NSW government is exploring minimum energy efficiency standards, as reported by ABC.
• Electrification advocacy group Rewiring Australia is advocating for electric appliances to replace gas fittings at the end of their life, and has written a discussion paper calling for portable energy set-ups like “balcony solar” systems to be allowed to power household appliances in rentals, as reported by ABC.
• Portable energy set-ups like balcony solar systems are being considered; ABC’s report features a renter in Wollongong who uses portable solar panels to power kitchen appliances and charge batteries.
• Three hours of free daytime electricity will be available to NSW residents with smart meters as part of the Solar Sharer Offer, as reported by ABC.

Perspectives

IEEFA (via Jay Gordon): Landlords lack financial motivation to install energy upgrades because they do not benefit from energy bill savings; regulation is needed to solve the split-incentive problem.

Rewiring Australia (as reported): Electric appliances should replace gas fittings at the end of their life, and portable energy setups should be allowed in rentals to enable renters to benefit from solar power.