Hi,
Our OC installed a communal PV system last year. It was made controversial for several years by a few objectors but always had majority support. That minority campaigned strongly in opposition. It took 3 votes (twice in 2009 and once in 2012), a change of legislation in 2011 (in the ACT), and an increase in familiarity with PV over the period to be able to go ahead. The most superficially reasonable argument of the objectors was that we did not have sufficient in our sinking fund. ‘Save the sinking fund’ was the rhetoric. They disregarded that we had an independent, professionally-prepared sinking fund plan and each of the treasurers of the previous decade were in agreement that we had ample in reserve. I don’t think funding was really the objection. Instead it was the apparently reasonable objection that could be brought to the table to instil doubt in other owners when the real objections were otherwise.
Anyway, that is my background.
I would agree that some OCs might have energy efficiency measures available that would result in a quicker return such as more efficient bulbs in parking areas, and these should be pursued. Nonetheless, the cost of PV equipment has fallen to the point that we have reached ‘grid parity’. That is, if you gain a benefit equal to the retail price of electricity, say from a net tariff, PV systems give a respectable return on investment. So, if your proposed PV system allows you to avoid the retail cost of electricity, the OC can expect to have a decent long term cost saving and more than recoup the cost of the investment.
It may be that there are other savings to be made elsewhere but addressing one does not preclude the other. Why not do both? Which you do first might not matter all that much.
If your OC goes ahead with a PV system and is paid some sort of gross feed in tariff, it might be taxable as non-mutual income. If the OC resolves to hold the income-earning PV equipment ‘in trust’ for the owners then the tax is payable once at the corporate rate by the OC and not by individual owners in proportion to their unit entitlements. That was the gist of our tax ruling which I would be happy to share with your OC if you want it. A net tariff is generally not taxable.
The cost savings to the OC should end up distributed to all owners in proportion to unit entitlements in effect because the cost of running the OC will be reduced and the levies will not need to be as high as they otherwise would be. Consequently, all owners should benefit proportionately.
Strata titled properties are often ideal for PV installations because they often have a considerable area of unshaded roof, a long-term management structure, and electricity costs to off-set.
PV systems require very little maintenance and are a simple, mature technology with no moving parts that can be expected to last for decades.
I have no idea how well researched your OC’s proposal is but I would not be overly sceptical.