Using Income Contingent Loans for the Financing of the Next Million Australian Solar Rooftops

34 Pages Posted: 28 Feb 2016

See all articles by Kenneth Baldwin

Kenneth Baldwin

Australian National University - College of Physical and Mathematical Sciences

Bruce Chapman

Australian National University, Research School of Social Sciences (RSSS) - Economics Program; Australian National University (ANU) - Crawford School of Public Policy

Umbu Raya

Australian National University (ANU) - Crawford School of Public Policy

Date Written: August 1, 2015

Abstract

Rooftop solar systems have two major benefits: a reduction of carbon emissions (a public good) and future energy bill savings for consumers. However, the availability of solar energy systems to low-income households is constrained by access to finance for the initial investment cost, an issue which could potentially be addressed with the use of income contingent loans (ICLs). By applying unconditional quantile econometric methods to HILDA income data we illustrate that for a $10,000 loan for home owners ICLs can be used with little or no cost to government to help finance the next one million solar energy devices.

Keywords: Income contingent loans; solar energy

JEL Classification: Q28, Q27

Suggested Citation

Baldwin, Kenneth and Chapman, Bruce James and Raya, Umbu, Using Income Contingent Loans for the Financing of the Next Million Australian Solar Rooftops (August 1, 2015). Crawford School of Public Policy CCEP Working Paper No. 1508, Available at SSRN: https://ssrn.com/abstract=2738314 or http://dx.doi.org/10.2139/ssrn.2738314

Kenneth Baldwin (Contact Author)

Australian National University - College of Physical and Mathematical Sciences ( email )

Canberra, Australian Capital Territory 2601
Australia

Bruce James Chapman

Australian National University, Research School of Social Sciences (RSSS) - Economics Program ( email )

HC Coombs Building
Australian National University
Canberra, Australian Capital Territory 0200
Australia

Australian National University (ANU) - Crawford School of Public Policy

ANU College of Asia and the Pacific
J.G. Crawford Building, #132, Lennox Crossing
Canberra, Australian Capital Territory 0200
Australia

Umbu Raya

Australian National University (ANU) - Crawford School of Public Policy ( email )

ANU College of Asia and the Pacific
J.G. Crawford Building, #132, Lennox Crossing
Canberra, Australian Capital Territory 0200
Australia

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