A green group has released analysis that suggests exemptions for big polluters under the renewable energy target (RET) will cost households and businesses $7.1 billion by 2030.
Under the RET, electricity retailers are required to purchase a proportion of their power from renewable energy sources such as solar, wind and geothermal.
The aim is to have 20 per cent of Australia's electricity needs coming from renewables by 2020.
Retailers pass on the additional cost to households and businesses.
But emissions-intensive trade-exposed industries receive a discount of up to 90 per cent so they're not at a disadvantage compared with overseas competitors.
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The Climate Institute says that discount will be worth $7.1 billion by 2030.
Of that, $4.4 billion will be picked up by non-trade-exposed businesses. The other $2.7 billion will be paid by households.
"To fund protection for some big polluters, households are paying around 23 per cent more for renewable energy than they otherwise would over the life of the scheme," institute chief executive John Connor said in a statement.
"Trade-exposed industries consume around 25 per cent of Australia's electricity but currently help to pay for only around eight per cent of the total effort of the RET."
Mr Connor says while some protection is warranted it should be wound back over time.
The Climate Institute says the RET scheme currently costs the average Sydney household $1.20 per week.
Meanwhile, the Australian Conservation Foundation on Friday called on the multi-party committee on climate change not to exclude the LNG sector from Labor's proposed carbon tax.
Foundation economics adviser Simon O'Connor said to do so would shift $7.5 billion of compliance costs onto other sectors of the economy.
"The integrity of Australia's transition to a clean energy future depends on all major emissions sources being covered by the price on pollution," he said in a statement.
"As one of the fastest growing sources of emissions in Australia, the LNG sector must be included under the scheme and made to pay for the pollution it produces."
