News

Installing Solar PV in Qld Strata

April 29, 2019

While rooftop solar photovoltaic (solar PV) has been popular in Australia, there is relatively low penetration in strata/community title schemes (strata schemes) with an estimated 0.5 per cent of such schemes having solar installed, nation-wide. It’s hard to pinpoint one reason for this, but some factors include:

  1. Perceived complexity for solar installers acting as a disincentive for targeting strata schemes;
  2. Strata scheme decision-making processes acting as a barrier to innovative energy options;
  3. The difficulty in determining whether there is a solid financial case for strata scheme investment in solar PV;

This article looks at a range of considerations that should be taken into account before installing solar PV in strata schemes, with an emphasis on regulatory issues/barriers.

Governance

The governance arrangements in strata schemes can add complexities to the solar installation process that are not present in the usual solar PV installation scenario. Several possible governance arrangements include:

  1. All owners participate by agreement;
  2. Some owners participate on an ‘opt-in’ basis. Those who choose not to participate receive none of the benefits of the system, but might be able to pay to connect to the system at a later point;
  3. Energy supplier/retailer provides the system (usually via a ‘Power Purchase Agreement’). This may be more expensive than where Strata Scheme owners own the system;
  4. External/Related entity. The strata scheme owners could set up a Trust or Special Purpose Vehicle (SPV) which the owners (who wish to participate in the scheme invest in). Again, this may not be as cheap as the first possibility where all owners agree on the investment in question.

Where the installation of solar PV will make an alteration or ‘improvement’ to the common property of the strata scheme, this must be completed in accordance with the requirements of strata legislation, such as section 159 of the Body Corporate and Community Management Act 1997 in Queensland (and the Regulation Modules made under that Act). For example, clause 163(1)(c) requires that some improvements be authorised by a ‘special resolution’ of the Body Corporate.

Considering the business case for solar in strata schemes

In considering whether it makes sense to install solar PV in a strata scheme, the following (non-exhaustive) matters should be taken into account:

  • Is energy use sufficient to justify installing solar PV? Energy use data can be requested from the existing energy supplier to help work this out;
  • Would the reduced load from the grid affect the existing energy deal with the energy seller for the entire embedded network (i.e. at the ‘gate meter’)? This deal may depend on a certain amount of energy being purchased;
  • Does it make sense to feed back into the grid using solar feed-in tariffs? It may make better economic sense to restrict the size of the solar PV to a size which can be used by the strata. It may also be worth considering whether battery storage would be worthwhile;
  • How will the solar energy be distributed fairly? Energy consumption may need to be tracked to individual units. Similarly, consideration of how any returns on solar feed-in tariffs are distributed will need to be considered.

Physical Considerations

It will often be necessary to engage a structural engineer to determine whether strata buildings can support solar PV panels and racking and mounting systems of your desired size. Similarly, consideration of how cabling for the solar PV will be integrated into the building needs to be considered.

Other Regulatory Considerations

Legal obligations with respect to solar PV in a strata scheme will largely depend on the governance arrangements chosen. Other matters to consider include:

  • In Queensland, individual owners in a strata scheme have the right to install their own solar PV on their property in some cases. Under the Building Act 1975, section 246O, a covenant or by-law cannot prohibit or restrict the installation of a solar hot water system or photovoltaic collectors merely for the purposes of preserving the external appearance of a building.
  • A solar PV installation counts as a generator, electricity network, and electricity supply for the purposes of the National Electricity Law. Depending on the size of the solar PV, the arrangement is likely to regulated by the Australian Energy Regulator’s network and selling exemption framework and may require registering an exemption. Note, these arrangements are not affected by current plans to change the way embedded networks operate.
  • Strata schemes should consider whether it is wise to only use Clean Energy Council approved solar retailers and accredited solar installers.

Subsidies and Incentives

Subsidies available include interest-free loans of up to $10,000 and grants of $3000 to purchase batteries or combined solar-battery system from the Queensland Stat Government.

Small-scale Technology Certificates (STCs) are a form of rebate for installers of solar panels or a solar hot water system. The owner of the installation will receive a number of STCs that can be sold on an open market or given to your solar installer for a discount;

Customers in South East Queensland may be eligible for a Solar Feed-in Tariff from their electricity retailer for energy fed back into the grid. Note, however, the former solar bonus scheme does not apply to new customers and there is no mandated feed-in rate (though there is in Regional Queensland).

In its 2017-2018 Report on Solar Feed-in Tariffs, the Queensland Competition Authority (QCA) looked at the range of market feed-in tariffs available in South-East Queensland. The QCA found that:

  1. For households, the solar feed-in tariffs ranged from 6–20 cents per kilowatt hour, and for small businesses the range was from 6–16.1 cents per kilowatt hour;
  2. The best offer for a particular customer type varies according to the customer’s level of electricity imports (consumption) and exports of solar power to the electricity grid.

For more information about solar in Queensland see https://www.qld.gov.au/housing/buying-owning-home/energy-water-home/solar.

This article was contributed by Dr Andrew Donnelly, Compliance Consultant – ARC Utilities Management

[1] Wattblock, Solar on Strata – WHITE PAPER, p3.

[2] Ibid., p4.

[3] For more information see https://www.cleanenergycouncil.org.au/.

[4] For more information see http://www.qca.org.au/getattachment/e631b14f-433b-4eae-8e66-088c44a5d174/SEQ-Solar-FiT-Report-2017-18-(media)-Oct-2018.aspx.