Deploying solar photovoltaic through subsidies: An Australian case
Xiuyue Deng, Stephen Poletti, Timothy Hazledine, Miaomiao Tao, Erwann Sbaï
Abstract
Australia has garnered significant recognition for its leadership in residential solar energy adoption, driven by incentive programs like the Feed-in Tariff and the Small-Scale Renewable Energy Scheme. Yet limited research has evaluated the policy's effects on residential solar photovoltaics in Australia. We thus examine how Feed-in tariff policies and different policy packages affect residential solar PV adoption using the quarterly data from July 2009 to June 2022. The benchmark results uncover that high Feed-in tariff rates, long-term contracts, and gross Feed-in tariff schemes substantially drive solar adoption in Australia. Still, the observed adverse relationship between cost and installed capacity highlights that upfront Small-Scale Renewable Energy Scheme subsidies effectively promote solar power. Our estimates may provide valuable implications for accelerating solar photovoltaic adoption and achieving renewable energy transitions in Australia. • Feed-in tariffs significantly boost residential solar panel adoption across Australia. • Subsidies under the Small-Scale Renewable Energy Scheme promoted solar deployment. • System GMM and 2SLS approaches mitigate endogeneity concerns in policy evaluation. • Market familiarity reinforces adoption, creating a cycle of solar uptake. • Combining upfront and ongoing subsidies effectively drives residential solar growth.