This study investigates the impact of renewable energy rebates, specifically premium feed-in tariffs (FiTs) and renewable energy target (RET) policies, on environmental sustainability in Australia. Using econometric modeling, the study finds that while premium FiTs have a notable long-term impact on reducing carbon emissions, there are short-term challenges. In contrast, RET policies consistently demonstrate efficacy in both the short and long term. External factors, such as the China-Australia trade dispute and COVID-19 disruptions, introduce heterogeneity in the outcomes of these policies by influencing supply chains and international collaborations related to renewable energy technologies. The findings highlight the importance of well-designed policies that balance short-term advantages with long-term environmental benefits. The study emphasizes the significant contribution of effectively designed rebates in promoting a more environmentally conscious future in Australia, underscoring the need for incentives to enhance ecological integrity and ensure long-term viability.This study investigates the impact of renewable energy rebates, specifically premium feed-in tariffs (FiTs) and renewable energy target (RET) policies, on environmental sustainability in Australia. Using econometric modeling, the study finds that while premium FiTs have a notable long-term impact on reducing carbon emissions, there are short-term challenges. In contrast, RET policies consistently demonstrate efficacy in both the short and long term. External factors, such as the China-Australia trade dispute and COVID-19 disruptions, introduce heterogeneity in the outcomes of these policies by influencing supply chains and international collaborations related to renewable energy technologies. The findings highlight the importance of well-designed policies that balance short-term advantages with long-term environmental benefits. The study emphasizes the significant contribution of effectively designed rebates in promoting a more environmentally conscious future in Australia, underscoring the need for incentives to enhance ecological integrity and ensure long-term viability.