Examples of energy efficiency For residential customers, energy efficiency not only lowers bills; it can also increase levels of payback periods comfort and standards of living. This is particularly important in Tasmania given our climate, relatively older building stock, and Indicative relatively high proportion of vulnerable customer Indicative Measure payback households. cost period For businesses, improved energy efficiency Lighting translates into improved productivity for – $574 5.7 years (household) example through producing the same level of output with reduced costs, or a higher level of Draught sealing output without an increase in costs. $1 037 6.6 years (household) Governments need to tread carefully in Ceiling insulation implementing energy efficiency programs as $1 130 6.8 years (household) poorly implemented programs may impose additional costs, which are inevitably paid for by Installing consumers. Recent reviews of the Victorian $2 500 2.2 years (household) certificate’ program led to it being ‘white considered for closure as it was becoming an Repairing hot increasingly expensive scheme, without water service commensurate economic benefits. $250 2 years leakages (business) In a well-informed market, consumers will be incentivised to undertake energy efficiency Installing measures as it makes financial sense. on lighting $300 3 However, energy markets are not perfect, so (business) Government has a role in helping to address market failures, such as information gaps, split Ceiling insulation incentives or lack of access to capital. $20 000 6 years (business) Information gaps exist where it is difficult for Businesses often have a clear understanding of consumers to calculate the payback period on the payback period but are cash and capital an energy efficiency upgrade. constrained. The Government is willing to explore with the private sector facilitating programs that would help businesses to access funds to undertake energy efficient upgrades.
For residential customers, energy efficiency not only lowers bills; it can also increase levels of comfort and standards of living. This is particularly important in Tasmania given our climate, relatively older building stock, and relatively high proportion of vulnerable customer households. For businesses, improved energy efficiency translates into improved productivity – for example through producing the same level of output with reduced costs, or a higher level of output without an increase in costs. Governments need to tread carefully in implementing energy efficiency programs as poorly implemented programs may impose additional costs, which are inevitably paid for by consumers. Recent reviews of the Victorian ‘white certificate’ program led to it being considered for closure as it was becoming an increasingly expensive scheme, without commensurate economic benefits. In a well-informed market, consumers will be incentivised to undertake energy efficiency measures as it makes financial sense. However, energy markets are not perfect, so Government has a role in helping to address market failures, such as information gaps, split incentives or lack of access to capital. Information gaps exist where it is difficult for consumers to calculate the payback period on an energy efficiency upgrade. Examples of energy efficiency payback periods Measure Indicative cost Indicative payback period Lighting (household) $574 5.7 years Draught sealing (household) $1 037 6.6 years Ceiling insulation (household) $1 130 6.8 years Installing (household) $2 500 2.2 years Repairing hot water service leakages (business) $250 2 years Installing on lighting (business) $300 3 Ceiling insulation (business) $20 000 6 years Businesses often have a clear understanding of the payback period but are cash and capital constrained. The Government is willing to explore with the private sector facilitating programs that would help businesses to access funds to undertake energy efficient upgrades.
Tasmanian_Energy_Strategy_-_draft_for_public_comment_20141219.docx