When Chris White and Chelsea Mclean moved into their newly rented home in Ballarat last July, what they found was not pleasant.

With chill leaching out of the exposed brick walls in their lounge room, the electric heater fixed to their wall took up to four hours to heat their home. As the couple were on student and unemployment benefits, they could not afford to keep the heating on for that long. According to the Ballarat Courier, the home had doors with large gaps and uneven floors. It was consistently cold.

Sadly, there was not much they could do. As renters who had been knocked back for more than 30 other properties, White and Mclean had to settle for what they could get.

In Sydney, meanwhile, retiree Rita Burrows has thrown out heaters, refrained from using air conditioning, reduced her shower time and even taken to filling the kettle so as to heat only one cup of water at a time in her inner-Sydney home. Yet she still struggles to meet her energy payments. On some occasions, she told the ABC’s 7:30 report earlier this year, she leaves her quarterly energy bill on the table to avoid opening it.

Burrows, White and Mclean are not alone. Last year, a survey of low income earners by the NSW Council of Social Services found that between four and nine per cent regularly go without medical treatment, healthy meals, basic household repairs or transport in order to pay for energy bills. A much larger cohort (greater than 20 per cent) is forced to sometimes go without these things.

Moreover, many low income households live in dwellings whose energy performance is woeful. The NCOSS survey revealed that, among homes occupied by low income earners:

  • one in five (20 per cent) does not have energy efficient lightbulbs
  • more than four in 10 (42 per cent) do not have ceiling insulation in their homes whilst almost six in 10 (57 per cent) have no wall insulation
  • between 60 and 80 per cent lack four-star or better heating, air-con, dryers or dishwashers
  • around eight in 10 lack solar power or solar hot water.

This presents a conundrum.

Since they have the least efficient homes, low-income households offer the greatest opportunity for energy performance improvement. In 2016, the Low Carbon Living CRC estimated that if every one of the households within the lowest two quintiles (lowest 40 per cent) of income made change in three areas, almost 11 million tonnes of carbon dioxide could be avoided each year.

These changes included switching from coal fired electricity to domestic solar electricity, from electric hot water to solar hot water and from a low-star refrigerator to a four-star refrigerator. Even if only one quarter did these things, more than 2.7 million tonnes worth of carbon emissions would be saved, the research said.

Yet for numerous reasons, this cohort are often unable to upgrade their homes.

In some areas, governments are acting. States such as Queensland, New South Wales and South Australia are moving to install solar panels on social housing. In Victoria, the government last year announced a program where it will deliver free energy upgrades to the homes of 1,000 recipients of home and community care services.

This raises questions about how low carbon homes can be delivered to low income earners.

According to Dr Edgar Liu, a Senior Research Fellow at the City Futures Research Centre at the University of New South Wales, barriers to doing this fall into three areas.

First, many low income earners are either renters or social housing tenants. This, Liu says, creates a split incentive whereby the benefits of greater energy efficiency accrue to tenants, yet both the costs of performing these upgrades and decisions about whether or not to do so rest with private landlords or social/public housing providers.

Thus while tenants benefit from greater energy performance, they often have little say about whether or not homes are upgraded. That power rests with landlords, who gain little benefit from paying for upgrades aside from some appreciation in the capital value of their asset.

Further, given their relatively powerful position, many landlords feel little market pressure to undertake upgrades.

The effect of this can be seen through numbers. In 2012, a Household Energy Consumption Survey conducted by the Australian Bureau of Statistics found that whilst 84.5 per cent of home owners without a mortgage and 86.6 per cent of home owners with a mortgage had insulation in their homes, that number fell to just 38.5 per cent for renters. Meanwhile, just one in 27 households who rented in the private market have a solar electric and/or solar hot water system. For owner occupiers, that figure was as high as one in five (20.2 per cent).

In public or social housing, meanwhile, decisions about upgrades rest with states and community housing providers. Notwithstanding their benevolent intentions, the ability of CHPs to upgrade the energy performance of stock under their management depends on their priorities and their financial capacity to do so.

Next, there are financial barriers. On this score, Liu says significant numbers of low income households are unable to afford energy efficient appliances. Thus they may have cheap fridges or may have portable heaters rather than efficient heating systems.

Finally, Liu says there are barriers around information. In research which he and two others performed for the CRC for Low Carbon Living in 2016, participants expressed that a lack of easily accessible information was a barrier to understanding what is driving their energy usage, strategies which can reduce energy consumption and what information and assistance is available.

According to Liu, many people are unaware about how to get help or what kind of assistance is available. He says a common misconception involves ideas that renters cannot do anything to improve the energy performance of their dwellings. In fact, he says many can obtain a free home suitability assessment under which an accredited person conducts an assessment of the premises and recommends changes. Whilst some of the proposed changes would require significant investment, others cost nothing and can be done without the landlords’ approval.

Going forward, Liu would like change in several areas.

First, he would like tenancy law changed to enable tenants themselves to undertake straightforward improvements. This could include, for example, changing the curtains so as to avoid having to put blankets and doonas over windows.

Before being offered for lease, he says premises should be required to meet minimum standards. In the UK, landlords are required to have an energy performance certificate for any properties which are sold or leased. These must achieve a rating of E or above under the Minimum Energy Efficiency Standard under a rating scheme which ranges from A (most efficient) to G (least efficient).

Beyond that, Liu would like the gradual removal of subsidies to the coal industry and a shift to enable greater access to energy generated from renewable sources.

This could be accompanied by adjustment packages to enable coal workers, for example, to retrain and reskill to enable them to work on renewable projects.

For both social and environmental reasons, Australia must deliver better performing homes with a lower carbon footprint to low income families.

With a few simple steps, significant progress can be made.