Electricity subsidies in Australia - The Facts

What are subsidies?

Subsidies include funds transferred directly by government to producers and funds transferred from private entities to producers under government mandates.

How does Australia subsidise electricity?

The main electricity subsidies are provided under the Federal Government’s Renewable Energy Target (RET) and State Government solar feed-in tariff (FiT) schemes.

The RET requires electricity retailers, and large customers, to buy a minimum proportion of their electricity from renewable generators. The retailers pass on the extra cost of buying this renewable energy  to their customers – household and business electricity users.

FiTs require electricity retailers to pay a tariff to people with rooftop solar panels for electricity they feed into the grid. The electricity retailers then pass this cost on to all of their customers.

In addition to the RET and FiTs, governments provide subsidies in the form of direct funding for various electricity generation and technology projects.

More information:

Our Fact Sheet:  Electricity subsidies in Australia

Recent opinion piece from our CE Brendan Pearson in the AFR: Wind and solar can only win on a tilted playing field

BAEconomics Report: Primer on renewable energy subsidies in Australia

BAEconomics Report: Electricity Production Subsidies in Australia