Our OC in the ACT has a communally owned PV system on common property (a shared carport roof) which connects to a meter box which supplies lighting to the common property. IE an account paid by the OC. We got a tax ruling on gross feed-in-tariff income.
Key points:
1) If the feed-in-tariff is gross then it is unrelated to consumption and all is taxable.
2) If the FIT is net, then only the excess you produced, exported and have been paid for is taxable. The rest is just making power you have used yourself and it is not taxable. A block of flats with lots of lights running constantly during the day in an underground carpark and corridors could easily offset a lot of electricity without ever exporting. In such a case it would be simple. No tax, no FIT, just a lower apparent consumption and electricity bill.
3) If you resolve that the OC will hold the PV system ‘in trust’ for the owners, then the income is assessed simply and once as non-mutual income of the OC at the business tax rate of 30%, just the same as non-mutual income you probably have from bank interest.
4) If the OC does not use the ‘in trust’ resolution, then the PV system is just a part of the common property that is held in most states by the OC as ‘agent’ for the owners. It is the ‘agent’ relationship that results in the nuisance requirement to divide up the income according to unit entitlements and then each owner has to declare their little bit on their tax return. As different owners have different marginal rates this results in a different benefit to different owners and the whole idea becomes difficult. Better to use the ‘in trust’ resolution!
5) If the OC is receiving income from the PV system, the OC can claim depreciation, linear over 20 years.
Note, Whale has it the wrong way around. ‘in trust’ lets income be done simply, once on the OC tax return equitably with benefit to all owners through lower levies in proportion to unit entitlements. Having each owner required to declare their little bit is what you want to avoid.