Great to hear that Flatchat has Embedded Networks in its sights for 2020. Many strata residents wouldn’t know what an embedded network was, let alone having had to live with one.

It involves strata buildings purchasing their utilities – electricity, gas, internet etc – from a single source not just for common property but also for individual apartments.

In theory this opens up opportunities for apartment residents to share in the financial benefits of group purchasing and the discounts that go with it. The only problem is, as Flatchat points out, the process has been hijacked by developers.

It is the developer who pockets the benefit upfront from selling the supply contract whose value is in direct proportion to the profit that can be made from selling utilities to strata residents in years to come. As Flatchat also notes, the developer leaves the business of installing the infrastructure to distribute / meter the electricity etc to the embedded network supplier. The owners are left locked into a contract for a supply, which they could in theory forsake for another more competitive supplier, but in practice would have to pay for separate infrastructure for any new supplier they chose. The practical hurdles for any apartment resident or owner changing to another more competitive supplier are just too great – and that’s assuming that apartment residents understand what’s going on – which most would not.

Not everything about embedded networks is bad. They could be used to empower the owners corporation to centrally purchase utilities not just for the common property but for individual apartments. The combined utility needs of the common property and apartments could give the OC some leverage in negotiating utility prices. But that is only going to happen if it is the OC that is in control, and not some outside Embedded Network Supplier, and any costs savings flow back to owners.

Those of us who are fortunate to be in buildings that have installed solar pv to cater for our common property electricity needs should now be thinking about how we can share the benefits of cheap and clean solar power with our residents & owners. Expanding our solar pv installations to provide electricity not just for common property needs but to individual apartments could be the way to go. An embedded network owned and controlled by the owners corporation for the benefit of owners could be the answer to bringing the benefits of solar pv electricity to our apartment residents.

Strata Answers
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Practical Solutions for Strata Living