An energy revolution is at hand in Australia, as the arrival of home batteries combines with the falling cost of solar panels to transform the centralised grid. But for its benefits to be spread fairly and efficiently, governments must avoid the mistakes of the past by rejecting expensive subsidies and by setting charges that reflect the true cost of providing electricity.

In the first phase of large-scale growth in solar, lavish feed-in tariff schemes introduced between 2008 and 2011 encouraged 1.4 million households to install panels on their roofs – the highest proportion of households of any country.

State governments began winding back the schemes in 2012, but by the time the last runs out in 2028 they will have cost the economy $9 billion. Worse, people who chose not to install solar, or could not afford it, have paid for the schemes through a subsidy to solar PV owners worth $14 billion.

The schemes have reduced emissions, but at a very high price. There are much cheaper ways to tackle climate change.


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