A confluence of factors has led to soaring electricity and gas prices across the country, leaving Australians increasingly worried about upcoming bills.
Commonwealth Bank economists, in a report entitled Australian Energy Sector – The Perfect Stormoutline current price pressures, explaining that “high international energy commodity prices, problems with domestic coal-fired power generation, and a lull in renewables” have converged to result in abnormally high prices that will fluctuate, but which will likely remain high for at least the next two years.
At a minimum, ABC mining and energy economist Vivek Dhar said consumers would want to adjust their consumption during peak hours if they’re worried about rising costs, especially any throughout the coming winter and summer.
With the war in Ukraine prompting many to look for alternatives to Russian gas, leaving Australian natural gas prices on demand, he also said consumers may be looking to consider opportunities to electrify their gas consumption if they see fit. they are serious about savings.
According to data from Domain, energy consumption is not a new consideration for Australians, with “green home” listings increasing year on year in response to high search volumes for sustainability features. In 2022 alone, more than half of all homes listed contained keywords such as “solar panel”, “green house” or “insulation”.
But data from the ad company also showed that at least until the start of the year, a home’s energy efficiency was unlikely to make or break a sale, searches for “big- mother”, “yard” and “swimming pool” being currently rated higher in importance and energy efficiency measures considered aspects that can always be added.
Domain’s head of economics and research, Dr. Nicola Powell, explained, “For many, sustainable features are an asset rather than a must when starting a real estate search.”
Yet the country’s current energy crisis may soon change sentiments. Reports of long wait times for integrations such as solar are becoming more common in the industry, and SolarQuotes founder Finn Peacock recently confirmed that the usual wait time for integrations such as solar ‘As little as three weeks between the filing of a deposit for the solar installation and the commissioning of the system place has blown to a minimum of three months.
This timeframe is expected to lengthen as more consumers rush to mitigate rising energy bills through solar installation.
And given that sustainable homes are already priced higher, supply delays in the face of increased demand could motivate many to consider existing solar systems as more of an incentive.
Domain reports that buyers paid an average of $125,000 more for energy-efficient homes and $72,750 more for units in 2022, before energy issues kicked in.
Energy-efficient homes are also already attracting more interest from buyers (8.7% more visits per home listing and 5.5% for units) and selling faster than their non-energy-efficient counterparts.
So, while the effect of the country’s energy crisis has yet to be felt on market prices, it looks like the dominoes are aligning.
Indeed, the ABC report puts solar squarely in the spotlight, targeting the growing adoption of renewable energy systems as a key factor in mitigating the country’s broader energy problems.
“In the short term, rooftop solar will provide much-needed respite from high electricity prices,” the bank’s report said.
On an individual level, many Australian house hunters may soon be thinking the same thing.