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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.