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The upcoming Australian federal election stands as a pivotal moment for homeowners considering energy efficiency improvements. With climate and energy policy remaining contentious issues between major parties, the outcome will likely reshape residential energy incentives, rebate structures, and renewable energy targets that directly impact household decisions. 

The competing visions for Australia's energy future—from Labor's focus on renewable integration to the Coalition's emphasis on energy affordability—will determine the financial viability of solar installations, battery storage systems, and efficient appliance upgrades. For Australian homeowners navigating rising energy costs, understanding these potential policy shifts is essential before committing to significant home energy investments in the post-election landscape. 

In the wake of the on ABC last week where climate change and energy affordability were central issues, we address what the election means for home energy upgrades. 

In short:

• Energy policy is now a central issue in the federal election, with both major parties offering cost relief and infrastructure promises.

• Labor is promising a $2.3 billion battery subsidy to reduce costs by $4,000 and save households up to $1,100 annually on energy bills. In response, the Coalition plans seven nuclear power plants, an east coast gas reserve and a 25-cent per litre fuel cut. 

• Millions of renters, low-income households, and apartment residents face a great risk of being left behind in energy upgrades that will secure long term benefits. 

• More focused and equitable policies are necessary to ensure sustainable change for all Australians.

A growing political and policy issues for the federal government

It is useful to think about home energy upgrades as three main pillars:

1. Electrification of household appliances and infrastructure (including stove tops and hot water systems); 
2. Shifting household energy production to renewable sources (solar and batteries); and 
3. Thermal upgrades to the building (insulation and sealing). 

Traditionally a state policy issue, we are increasingly seeing the federal government becoming involved in home energy upgrade policy amidst cost-of-living pressures – a key political concern. 

In a deal with the Greens, last November, the federal government an extension of $500 million (a total commitment of $800 million) to addressing social housing by upgrading insulation, solar and electrical appliances over four years from 2025/26. This will cover an estimated quarter of social housing across Australia. In anticipation of the election, in February this year, across civil society, tenant advocates and industry called for the Commonwealth government to facilitate upgrades by landlords and prevent costs being passed to tenants. This is significant because landlords bear the cost of upgrades and yet the benefits flow to tenants who pay their energy bills. To date, policy makers have not adequately addressed this issue - – commonly called ‘split incentives’ - meaning many rental properties have poor thermal efficiency and high energy bills.

Election promises: relief or reform?

As part of this year’s election promises, the Albanese Labor government has pledged a . The scheme will cost an estimated $1.8 billion. The Coalition matched this promise. For both parties, the policy driver was clearly addressing the cost of living. Yet this was a missed opportunity to invest these funds in home energy upgrades that will have a lasting impact on emissions and household energy prices.  

You may recall that the 2022 election campaign by the Albanese government promised the reduction of household power bills by $275. Since that time, energy bills have risen. Although often cited as due to the global surge on energy, domestic factors also play a key role. High gas prices in peak demand, network costs and coal-fired power outages are driving up household energy bills. 

The lesson here is that giving direct cash relief to power bills does not fix the underlying drivers of high energy costs.  

Batteries vs Nuclear, and who benefits?

More directly addressing these drivers of high energy bills, in this election campaign, the Labor government has also promised to to subsidise home batteries to households with solar through the existing Small Scale Renewable Energy Scheme. This has an estimated . The issue here is the impact on homes locked out of solar to date (particularly low socio-economic households, renters and strata units).  

The Coalition argues that this policy will only benefit the wealthy and higher costs will be passed on to households locked out of electrification. According to some analysts, a critical mass of batteries could bring down costs for grid-dependent households by reducing the overall peak demand, where reliance on costly gas is a major factor in high energy bills. If Labor are re-elected, the equity implications of this policy will be important to monitor. 

The Coalition plan is to bring in an east coast gas reserve, slow down the build of renewables and build seven nuclear plants to replace coal-fired power stations. The Coalition claim they could have the first small unit operational by 2035 and the largest by 2037. CSIRO has declared this timeline to be unrealistic, stating it is unlikely to be feasible before 2040. The Coalition has also pledged to half the fuel excise and cut 25 cents off the price of a litre of petrol for a year. 

What needs to happen next?

As we can see from this election, energy policy is politically significant with complexities across Australia’s diverse climate, housing stock and occupant dynamics.  

More policy attention must address thermal upgrades and electrification for all Australian homes – owner/occupiers, landlords and tenants, social housing and strata units. 

The Energy Upgrades for Australian Homes project under the RACE for 2030 CRC is a collaborative project across researchers, government, industry and community organisations to enhance energy efficiency for all Australians. The Centre for Sustainable Development Reform is leading the policy and legal analysis in this project, identifying gaps and opportunities across all levels of government to address these enduring policy issues.