REPS2 Update. Fairness & Confidence Eroded & Prices at Risk

At the same time, new information disclosed by the South Australian Government during a live industry information session in January has raised serious questions about fairness, equity, and the underlying intent of the revised framework.

During that session, government representatives confirmed an intention to allow the grandfathering of legacy incentives for large energy facilities under REPS2. This is a deeply troubling signal. Under the revised scheme, large energy users are no longer obliged to contribute financially, yet under this approach, they stand to be among the largest beneficiaries of the program.

In effect, the biggest recipients of the revised REPS program may be those segments of the South Australian economy that are no longer required to fund it. This outcome cuts directly against the core principle that underpinned the success of REPS and REES for more than a decade: that costs and benefits should be shared fairly across the system.

Equally concerning was confirmation that transition factors for residential activities are intended to be removed from 2026. Transition factors have historically been a critical mechanism for ensuring that vulnerable households could access meaningful levels of support.

Their removal would translate to funding reductions of up to 75 percent for some activities.

This change is yet to go into policy and remains one of the key areas of concern for industry as the state government approaches caretaker mode in the lead-up to the looming state election.

At a time when cost-of-living pressures remain acute, this decision would significantly reduce assistance for pensioners, low-income families, and priority group customers that need it the most, while the overall scale of the scheme has already been dramatically reduced.

Together, these signals point to a policy framework that risks delivering the opposite of its stated objectives.

Those most in need of support are set to see that support materially weakened. Many households and small businesses will continue to contribute to the scheme through their energy bills while having fewer opportunities to benefit from it.For many small to medium businesses, the program has become a tax with no accessible benefit. Meanwhile, entities that no longer contribute at all may emerge as the largest winners.

This imbalance is not theoretical. It strikes at the heart of the social licence that allowed REPS to operate successfully for years. Energy efficiency schemes rely on trust. Trust that contributions will deliver fair returns, trust that policy is evidence-based, and trust that equity claims are reflected in outcomes, not just rhetoric.

The continued delay in making REPS2 operational only heightens these risks. Without confirmed retailer targets, transition settings, and activity rules, compliance pathways remain unclear. As that uncertainty grows, so too does the likelihood that costs will ultimately be recovered through higher energy bills in 2026.

REPS was once a nationally respected, class-leading program because it balanced ambition with fairness, and social outcomes with economic logic. The direction now emerging under REPS2 threatens to unravel that balance. A scheme intended to protect consumer’s risks, instead disadvantage the most vulnerable, penalising contributors, and rewarding non-contributors.

There is still time to correct the course, but doing so will require more than assurances. It will require rapid policy reversal, transparent and evidence-based decision-making, and a recommitment to the principle that fairness is not optional in energy policy, it is foundational.