Key takeaways

Renters are using more residential energy and paying more for their energy bills than similar non-renters.

Research co-authored by an ANU expert found that renters spend around eight per cent more than otherwise similar Australian households on residential energy, additionally burdening households who are already under financial pressure.

The key reason for this renter disadvantage is likely to be informational. The market typically doesn’t have full information on the energy characteristics of a rental residence. 

This means discounts on energy-inefficient residences are often inadequate, and energy-efficient residences are unable to attract a fair premium. Rental providers thus have a weak incentive to invest in energy efficiency improvements such as insulation.

This shows the market needs better information. Clear energy efficiency ratings for rental residences nationally would help address the underlying cause of the disparity.

Well-designed minimum standards are also a useful approach. The ACT, for example, has recently introduced an energy efficiency standard for ceiling insulation for rental residences. 

Another approach is to provide incentives for rental providers to equip their properties with energy-efficient equipment and solar panels. In Victoria, for example, targeted solar subsidies have been introduced for rental properties.

Interventions by governments can set the scene for cost reductions as markets mature. For example, ‘solar for apartments’ schemes, like one the ACT has introduced, may help the market gain momentum that can be maintained even after a subsidy scheme has wound down.