Rooftop solar has been lauded by energy market bodies, policymakers, the media and environmental groups as a great way to lower bills, help the environment and help the grid. While rooftop solar may have lowered bills for homeowners able to install it, this paper posits that it has done so by increasing bills for everyone else.

Key findings

• Over the past 15 years, rooftop solar has enjoyed rapid growth in Australia due to its historically high return on investment for households.
• The analysis suggests rooftop solar generation saves the electricity grid at most only 4c/kWh in averted variable operating and fuel costs for coal and gas plants.
• Contrary to the promises of its advocates, rooftop solar only provides financial benefits if the investing consumer can receive a cross-subsidy from consumers without solar.
• Rooftop solar owners are receiving savings 2 to 4.5 times higher than the value their solar generation is providing the grid.
• Rooftop solar owners tend to be older and wealthy enough to own a house, meaning those who are less wealthy – particularly young renters and apartment dwellers – are effectively paying part of their energy bills.
• If cross-subsidies were ended through reforming network tariffs, consumers would learn the true value of rooftop solar; which would likely result in installation numbers dropping significantly.
• It is more vital than ever that energy bodies quantify the costs and benefits of continued direct subsidies and indirect cross-subsidies, including for batteries.