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There is an aggressive push by our Executive Committee to get solar panels put on the rooves of our 36 unit strata of which 12 units are on top, next to the rooves including us. (Three sets of 12 units, slightly attached.)
While I feel being green is a noble aim, I am disturbed by the unseemly haste things are forging ahead while other, currently more important projects are being neglected. The funds for installation should really be being spent in other areas I think.
Sure it may save us all some money in the long term, but it is unclear how the savings will be distributed, how long until the savings are realized and no firm guarantee has been given about amounts of savings.
I realize Special General Meeting type Resolutions will be required but in our apathetic building this probably won’t be a problem. The fact is, I smell a rat and feel like posing some questions. We have an ‘information night’ coming up but that is being run by the Solar Company and is unlikely to answer questions I think need to be answered, such as the ones above and whether our 40 year old roof which has just been checked and tiles and ridge caps replaced etc. can hold a number of solar panels.
I have read through some posts here in the green section of Flat Chat and hope someone with experience might offer advice.
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If as I interpreted from your earlier posts the Chairman and/or the Strata Manager is acting as an ”agent” for someone else, then the Chairman should declare to the Owners Corporation the nature and the amount of any resultant commission, and the Strata Manager is legally required to do that under the NSW Property, Stock, and Business Agents Act (2002).
That’s why I suggested that if my interpretation is correct and the Chairman is not the prime contractor, then the O/C should make sure that it’s aware of who is, because not only should that person or persons be properly licensed (e.g. Level 2 Certified Electrician) and accredited by the Clean Energy Council, they should be authorised installers for whoever it is that manufactures the panels and the inverter so that the warranty for those components is not compromised.
If by some chance the Chairman is himself doing the work, then he like any other business person would not be required to show the margins applicable to his quotation, but as he’s part of the Executive Committee he should abstain from voting on the proposal, and he shouldn’t have access to the detail of those other quotations that I suggested the O/C obtains before making an informed decision one way or the other.
And finally, if the Chairman and the Strata Manager are just environmentally aware or otherwise committed to what they’re proposing, then your O/C should still in my opinion have some competitive quotations to consider, and of course based on the same specifications. As I said before, in the absence of those quotations the O/C should defer any decision at the AGM, which by the way would need to be a Special Resolution (≥75% of those present personally and by proxy to be in favour by poll vote) if and when a decision is made.
As for the “advertising-like letters” that are being sent out by the Strata Manager, if they’ve been authorised by the Executive Committee as a whole as opposed to just the Chairman, AND the Strata Manager’s at a long arms-length away from the subject matter, then they could scrape through as a disbursement paid by the Owners Corporation. Otherwise they’re clearly advertising, and whoever does pay it shouldn’t be the O/C.
I’m sure we’d all like to hear about what eventuates.
…3) But the ATO regards that as non-mutual income, which must be (nominally) allocated out to each lot, and each lot has to report that in their individual income tax returns rather than the OC reporing it in theirs. Does the SM know they’ll have to issue 36 group certificates? Do the 36 owners know they’ll have to include this income? Note, there has been a suggestion that the ATO change this ruling, but who knows if/when that will happen … PeterC, how big is your scheme that used to consume 6MWH/qtr? Sounds very big.
Yes, the ATO regards a gross feed in tariff as non-mutual income because it is not linked to actual consumption (even if it is less than your actual consumption). On the other hand a net tariff may not be regarded that way because you would be using what you make (in effect) and consequently saving money to the extent that you do not have to purchase power-that is not income. These days a PV system can give a reasonable return on investment if used on a net tariff. IE the return is there if benchmarked against the retail price of electricity.
The matter of issuing group certificates etc is correct if the PV system is regarded as part of the common property and the strata legislation says that common property is held by the owners corporation as agent for the individual owners and the income is assessable and non-mutual. However, the ATO ruled in our case that the OC could pass a resolution to hold the PV system as property in trust for the owners. Then the non-mutual income (we get a gross tariff) could be assessed once in the hands of the OC at the 30% corporate rate that OCs typically only have to pay on interest from the bank. Note that was before this was made explicit in the ACT Unit Title (management) Act 2011. It was made clear in the UTMA because I provided our ruling to the Review of the Act. So, I think the same is likely to apply in other states. You could similarly resolve to hold a PV system in trust for the owners, but you should get a private ruling from the ATO to be sure.
Our OC is 105 townhouse units on 11.4Ha. Our electricity consumption is almost entirely for lighting paths and parking areas. Our 6MWh/quarter (yes, correct, ~26MWh/yr actually) reduced to 13MWh/year following systematic replacement of globes with more efficient ones. Our 9.2KW PV system puts as much into the grid by day as we take out at night to run our lights.
…1) The owners seem to be under the impression that they’ll each be getting their own system. That’s 36 inverters and 36 new meters…It would be more efficient for the OC to have one larger system (on the roof that they own) and to use the income to keep levies down. That’s only 1 inverter and 1 new meter.
Inverters are a small part of the overall cost of a system so there is not actually very much economy of scale from fewer, larger inverters. Indeed it can be more efficient to have multiple inverters.
We have 2 inverters in our communal system. If one were to die, half the system would continue to produce power normally while the other is being repaired or replaced. Within each of our inverters are two independent ‘maximum power point trackers’. In effect that means two inverters in each box, so four in all. The benefit of that is that when part of the roof is in shade but part is in full sun, four separate sections can operate independently at the maximum efficiency for their level of illumination.
If there were 36 inverters and the panel arranged in 36 groups, each little group could work at maximum efficiency without influence from a fault or different light conditions elsewhere on the roof.
Still, 36 does sound a bit excessive. I think it could avoid a lot of potential trouble if there were one system on the roof. That one system might be multiple systems electrically but would look like one unified system. Being on the common property and communally owned all owners would derive the same benefit from that common property, lower levies and a shared warm inner glow etc.
…Such things as mould growth, bird poo, wind blown debris and dirty rain can all affect performance. Again, difficult on a 3-storey high pitched roof…
True, the proposal should include something about how they are to be cleaned. Generally, rain will wash them and cleaning is required relatively infrequently but access for cleaning should be factored in.
Does your OC have shared electrical costs (say lighting common areas) that would conveniently match or exceed the likely production? If so, it is easier to be confident about the financial return on a net tariff and you could avoid tax issues outlined below.
Having said all that, If the roof is not being used for anything else, perhaps the OC loses nothing by granting a special privilege to use it to the unit owners that are interested.
Another option is solar hot water. Simple, low tech and perhaps it can be hooked up in series with the existing water heaters and consequently need no boosting arrangements.
Hi PeterC,
Not sure whether your most recent comments were for me or for ccbaxter.
I was just trying to highlight some of the questions a decent EC would be answering in a thorough proposal.
But, ccbaxter’s comments about advertising material being sent to individual owners leads me to think that what is being proposed is not a communal system owned by the OC but each interested owner getting their own system on the OC’s roof.
Either way, a Special Resolution (75% or more) would be required.
My comment about inverters wasn’t so much about cost (as that would be included in the installation price) but about physical space to house them. If they’re individual systems, they would have to have individual inverters.
Not every scheme has a meter room. Our 12-lot 3-storey pitched-roof block has a meter cupboard. No room even for 12 more meters (if gross), let alone 12 inverters.
Correct me if I’m wrong, but my understanding is that for new installations in NSW there is no longer a “gross” feed in tariff or a “net” feed in tariff, just a feed in tariff. For which the going rate is $0.06 per KWh. Which means that anybody would be crazy to connect up their PV system in a “gross” fashion these days.
Like ccbaxter, our block had significant restoration work on the roof about 5 years ago. The original problem was bad workmanship during construction, but the multitude of attempts by tradesmen with hob-nailed boots to fix leaks finished the roof off, and we had to get a complete re-tile. We no longer allow tradesmen on the roof.
So I would have severe reservations about allowing (up to 36) tradesmen with hob-nailed boots installing PV systems by drilling through the tiles to affix rails. Especially as ccbaxter lives on the top floor.
I wonder what happened at the “information night”?
Hi PeterC, Not sure whether your most recent comments were for me or for ccbaxter. I was just trying to highlight some of the questions a decent EC would be answering in a thorough proposal…
My comments were for anyone reading really and I was in part just making the more general point for anyone who might be interested that solar PV tends to scale linearly. That is, there are few economies of scale. In discussions people often tend to assume that bigger must be better and cheaper. In the case of solar PV, unlike many other things in life, it doesn’t tend to work that way. (straying a bit off topic a bit here) There are certain diseconomies of scale with large scale solar farms that don’t apply for domestic scale installations that can tend to cancel out the usual benefits of scale. I could write a few pages on this!
I agree that accommodating multiple inverters might be a problem, as might the state of the roof, access and so on.
…Correct me if I’m wrong, but my understanding is that for new installations in NSW there is no longer a “gross” feed in tariff or a “net” feed in tariff, just a feed in tariff. For which the going rate is $0.06 per KWh. Which means that anybody would be crazy to connect up their PV system in a “gross” fashion these days…
As far as I know that is correct for NSW. What you describe is a net tariff. IE you are paid only for net export at that low rate. Let’s say you make 3MWh and your premises use 2MWh. Your net export is 1MWh and you get paid at a low rate for that. On the other hand, let’s say you use 3MWh but only make 2MWh. You would then have to pay your normal retail price for 1MWh. In both examples your bank account would be better off by [2MWh X your retail price] because you don’t have to pay for 2MWh of consumption. That would not be taxable for an individual or an owners corp.
In the first example, there was a further 1MWh exported. The payment for that extra bit would much less than the retail price (the 6c/kWh above) and would be taxable in the case of an owners corp.
If you effectively get the retail price for most of your electricity production then the return on investment is generally quite respectable. This is perhaps a reason why the proposal discussed here focusses on the individual units and multiple systems. Each unit might consume more electricity than the common property. Each small system might produce only (say) half of the typical consumption of a unit. Consequently the financial return would be attractive to each individual owner under a net tariff but not to the OC via its single account for the common property.
Hi PeterC,
While we’re waiting for ccbaxter to tell us about the information night, let me ask another question.
When the 60c gross feed in tariff expires at the end of 2016 will everyone who has that arrangement have to reconfigure their two meters back to one “net” meter or do the power companies intend to achieve this with software?
Otherwise, if somebody is supplying 3 KWh in the daytime (at 6c) and consuming 3KWh at night (at 25c) , they would still face a fairly hefty bill.
Thanks for the previous answers.
…When the 60c gross feed in tariff expires at the end of 2016 will everyone who has that arrangement have to reconfigure their two meters back to one “net” meter or do the power companies intend to achieve this with software?…
As I am in the ACT I am not 100% sure of the NSW situation. However, I would not expect meters to be swapped back to the old spinning disk sort that would run backwards or forwards and would automatically do net metering. With those meters you could consume 3KWh of an evening and the next day you might wind the meter back to where it was with 3KWh production in the day. Now, or in 2016, I would expect net metering to be done in software. However, I don’t think any guarantees have been given through legislation that this will always be how it is done. On the other hand, with solar panels on a million roofs around the country, there might be enough critical mass to make it a politically ‘courageous’ decision not to ensure net metering as people expect it to be.
Now in the ACT I think people still get a single electronic, not mechanical, meter that has multiple registers. ACTEWAGL, our electricity retailer, will pay gross for the separately metered production at either the day time rate if the customer is on the time of use metering plan or at the flat rate if they are on that plan. Here it is optional to sign up for flat rate or TOU metering. The day time ‘shoulder’ rate is almost the same as the flat rate in any case. So, here someone installing today would get 18-19c/kWh regardless of their consumption amount or pattern.
If I were installing a PV system now and still had a spinning disk meter I would try to have the PV system installed ‘behind the meter’ to automatically get net IE the flat retail rate. IE My [consumption minus production] would be indistinguishable from just less consumption.
…Otherwise, if somebody is supplying 3 KWh in the daytime (at 6c) and consuming 3KWh at night (at 25c) , they would still face a fairly hefty bill.
Yes, there could be some interesting interactions between PV production and people’s consumption habits and ‘smart’ metering that allows for different consumption tariffs at different fixed times of the day or even dynamically as demand varies on the grid.
There are interesting products that combine a PV inverter with a modest amount of battery storage and a power router. These can be programmed to avoid sending any excess power to the grid during the day so that energy instead goes to batteries that are then used during the evening to minimise import from the grid during the expensive peak period. With such a set up you avoid export for which a low rate is paid and avoid import when you would have to pay a high rate. Consequently the PV system savings to you can approach the evening peak retail price. This sort of product can be much cheaper than the sort of system that allows for complete off-grid independence such as one might have on a farm because it does not have to have enough storage to cope with your highest power requirements or to reliably supply 100% of your usage.
One possibility is that by 2016 such systems, which can be bought now, are more readily available and a very attractive option.
@Kangaroo said:
PeterC, how big is your scheme that used to consume 6MWH/qtr? Sounds very big.I replied saying I had that wrong but just checked and I was right the first time and have edited my post below: We were ~26MWh/year before 2008, then 13MWh/yr with more efficient globes since 2008, now approx. zero MWh/year with production to match consumption.
PC, Thanks for the answers, K.