The cost-effectiveness of household photovoltaic systems in reducing greenhouse gas emissions in Australia: Linking subsidies with emission reductions

Burtt, D and Dargusch, P (2015) The cost-effectiveness of household photovoltaic systems in reducing greenhouse gas emissions in Australia: Linking subsidies with emission reductions. Applied Energy, 148 439-448. doi:10.1016/j.apenergy.2015.03.091


Author Burtt, D
Dargusch, P
Title The cost-effectiveness of household photovoltaic systems in reducing greenhouse gas emissions in Australia: Linking subsidies with emission reductions
Journal name Applied Energy   Check publisher's open access policy
ISSN 0306-2619
1872-9118
Publication date 2015-06-15
Year available 2015
Sub-type Critical review of research, literature review, critical commentary
DOI 10.1016/j.apenergy.2015.03.091
Open Access Status Not yet assessed
Volume 148
Start page 439
End page 448
Total pages 10
Place of publication Kidlington, United Kingdom
Publisher Pergamon Press (Elsevier Science)
Language eng
Subject 2205 Civil and Structural Engineering
2215 Building and Construction
2100 Energy
2210 Mechanical Engineering
2308 Management, Monitoring, Policy and Law
Abstract This paper examines the cost-effectiveness of subsidies (feed-in tariffs and renewable energy credits) paid for by electricity consumers to support the uptake of roof top photovoltaic (PV) systems by households in Australia. We estimate annual payback periods, and then regress these against the actual uptake of household PV and associated emission reductions, creating a relationship not apparent in other research. Sensitivity analysis reveals that the declining cost of PV panels had most impact on PV uptake followed by feed-in tariffs, renewable energy credits and the increasing cost of household electricity tariffs. Our modelling shows that feed-in tariffs were higher than necessary to achieve the resultant levels of PV uptake and that the low cost of PV panels and comparatively high electricity tariffs are likely to result in a continuing strong uptake of household PV in Australia. Our modelling shows that subsidies peaked in 2011 and 2012, with payback periods of three to four years, having since increased to five to six years. Emission reduction costs are expected to reduce from over AU$200 per t COe in 2013 to between AU$65 and AU$100 per t COe in 2020. Household PV reduced Australia's emissions by 3.7 million t COe in 2013 (1.7% of Australia's total emissions) and is expected to reach eight million tonnes (3.7% of Australia's total emissions) by 2020.
Formatted abstract
This paper examines the cost-effectiveness of subsidies (feed-in tariffs and renewable energy credits) paid for by electricity consumers to support the uptake of roof top photovoltaic (PV) systems by households in Australia. We estimate annual payback periods, and then regress these against the actual uptake of household PV and associated emission reductions, creating a relationship not apparent in other research. Sensitivity analysis reveals that the declining cost of PV panels had most impact on PV uptake followed by feed-in tariffs, renewable energy credits and the increasing cost of household electricity tariffs. Our modelling shows that feed-in tariffs were higher than necessary to achieve the resultant levels of PV uptake and that the low cost of PV panels and comparatively high electricity tariffs are likely to result in a continuing strong uptake of household PV in Australia. Our modelling shows that subsidies peaked in 2011 and 2012, with payback periods of three to four years, having since increased to five to six years. Emission reduction costs are expected to reduce from over AU$200 per t CO2e in 2013 to between AU$65 and AU$100 per t CO2e in 2020. Household PV reduced Australia’s emissions by 3.7 million t CO2e in 2013 (1.7% of Australia’s total emissions) and is expected to reach eight million tonnes (3.7% of Australia’s total emissions) by 2020.
Keyword Feed-in tariffs
Household PV
Payback periods
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Critical review of research, literature review, critical commentary
Collections: School of Geography, Planning and Environmental Management Publications
Official 2016 Collection
 
Versions
Version Filter Type
Citation counts: TR Web of Science Citation Count  Cited 18 times in Thomson Reuters Web of Science Article | Citations
Scopus Citation Count Cited 17 times in Scopus Article | Citations
Google Scholar Search Google Scholar
Created: Tue, 21 Apr 2015, 10:15:12 EST by System User on behalf of Scholarly Communication and Digitisation Service