Australia is an energy superpower. We have abundant natural resources, high average incomes and one of the highest per-capita rates of rooftop solar uptake in the world.

Yet every summer, many households across the country skimp on cooling, fear their next energy bill, or risk disconnection during extreme heat. Economists call this phenomenon “summer energy poverty” which can force households to make impossible choices between staying cool or putting food on the table.

Australia’s January heatwave broke multiple temperature records and led to significant spikes in emergency room visits. Climate change means such extreme weather events are likely to become more common in future.

Energy stress is often framed as an affordability problem, driven by electricity prices that are too high or incomes that are too low. But it both reflects and drives wider social and economic inequality, extending well beyond the simple cost of power bills.

Our research shows key drivers of energy stress are differences in wealth, a lack of emergency savings and whether people are renters. This is the case even comparing people with similar income.

First, it’s important to understand the difference between income and wealth, which are related but not the same thing. Broadly speaking, income is the money you earn from work, benefits or investments. Wealth is the total value of what you own........

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