Free power plan blasted for favouring wealthy electric vehicle owners over poor households

The head of a university’s energy policy centre says he is one of the few people who will benefit from Chris Bowen’s controversial solar sharer proposal, because he has an electric vehicle.

EXCLUSIVE: A university professor has skewered Chris Bowen’s plan to force energy retailers to provide power for free during the middle of the day, calling it a “highly regressive subsidy to affluent homeowners, particularly those with electric vehicles”.

In another condemnation, the nation’s top energy consumer group has warned the “solar sharer offer”, or SSO, is unlikely to be of much benefit to the people the Albanese government says its proposal is meant to help – renters, apartment dwellers and low-income households.

Mr Bowen’s Department of Climate Change and Energy has been seeking feedback on the SSO, but the Minister and his minions are unlikely to enjoy reading the submission from Victoria Energy Policy Centre director Bruce Mountain.

“I do not think the SSO you propose will provide the bill relief to renters and other low income households without solar that you are pursuing,” Professor Mountain, of Victoria University, wrote.

“Rather, I think it is likely to provide a highly regressive subsidy to affluent homeowners, particularly those with electric vehicles.

A top energy expert, Bruce Mountain, says the solar sharer offer won't help its intended targets – renters, apartment dwellers and low-income households. Picture: Jake Nowakowski

“It will also undermine the uptake of rooftop solar and drive average prices up in the long term by reducing retail market competition.”

Professor Mountain, whose PhD was on the political economy of energy regulation in Australia, argues that mandating three hours of free power would “expropriate much of the value” of the 4.2 million homeowners who have panels.

Prof Mountain told this masthead that millions of householders who paid for rooftop solar wouldn’t have done so if they knew they could get power for free from the grid.

In his submission, he predicted the SSO would devastate the PV installation industry, “greatly undermine the energy transition” and drive out electricity retailers who can’t afford to operate below cost.

He warned the government that “the most likely short-term winners will be relatively affluent households whose owners and family are more likely to work from home and own an EV whose charging they are often able to shift into the free hours.

“I am such a customer,” he said.

Professor Mountain – who left-leaning media outlet The Guardian calls a “leading energy expert” – concludes his submission by saying “I think the SSO will fail to achieve all of the objectives that you claim of it.

“To the contrary, for the reasons set out here, I argue it will do a great deal of damage to efforts to reduce greenhouse gas emissions, stimulate competition in retail markets and provide the benefits of rooftop solar to renters and low-income households.”

In another submission, Energy Consumers Australia also said the SSO would be most likely to help people with an EV, battery or those home during the middle of the day but be of little or no benefit to the government’s stated target groups.

Climate Change and Energy Minister Chris Bowen. Picture: NewsWire/Martin Ollman

“Consumers who will be able to easily increase consumption in the SSO free period are those with an EV, those with a battery, or those who are home during the day or who can automate appliances,” EVA said in its submission.

“These consumer categories do not, in the main, correlate with ‘renters, apartment dwellers, and low-income households’,” the group said.

“Households living in rental properties are less likely to have a home automation system that allows remote control of appliances. They are also less likely to be home during the day on weekdays compared to those who own their home outright, further reducing their ability to shift demand.

“Renters and apartment-dwellers are also less likely to have smart meters,” the ECA said, adding that “consumers without smart meters will not be able to access the SSO at all”.

An Albanese government spokeswoman said analysis from Morgan Stanley had found households that take up the SSO could save about $660 a year.

Originally published as Free power plan blasted for favouring wealthy electric vehicle owners over poor households