New! Solar for apartments – developers take a shine to solar
A pilot program aims to boost solar panel uptake in apartments by offering a framework to share the benefits.
Source: The West Australian
Rooftop solar might be a given for home owners with roof space and a need to reduce power bills, but it gets much more complex when applied to multi-story developments (MUDS). Many apartment dwellers find that there is no easy way to install photovoltaic panels, and therefore solar for apartments has not been a consideration.
However this is changing. For existing apartments, some organisations are calling on the Australian Energy Market Commission to change the rules governing Australia’s electricity supply. In conjunction with the Total Environment Centre and the Property Council of Australia, the City of Sydney is pushing for more distributed renewable energy to be generated and shared on local grids. Their argument is based on the fact that community solar installations will increase 500% in the US over the next year. Shared solar is now considered as the third renewable energy source, tapping into cleaner and cheaper energy for residents in MUDS.
In Australia however, shared solar projects and the practice of virtual net metering is not backed by federal government policy, and is more often than not discouraged by what many consider to be outdated electricity market regulations, despite the fact that it could solve Australia’s energy deficit problems.
Luckily, developers of new apartment complexes are looking for ways to incorporate solar as an integral part of the building design.
But how do you build solar into an apartment block?
One model is the shared strata model, in which the solar (and possibly battery storage) system are owner-managed by the strata manager. When an investor rents out an apartment, the tenant pays their electricity bill to the strata, which is used to offset the strata costs, and gives the tenant reductions in their power bills.
A second alternative is the one offered by a Perth-based developer, Psaros, who have taken a novel approach for a just completed an apartment building in WA where the 180kW rooftop system is wired so that it effectively gives each of the apartments its own 2kW PV array. Metro Solar installed the array with the use of advanced microinverter technology from US-based company, Enphase. They are using the same approach on an even bigger project in a Perth, Flo Apartments. Here they’re using 268kW of solar with a system comprised of 86 individual systems each allocated to one apartment – something that cannot be achieved with a string inverter.
Maybe each apartment having its own solar system seems inferior to having the body corporate become the power retailer and sharing the power across the tenancies because if each apartment has its own private 2kW system, many of them will get poor utilisation. However, there could be problems with the owners corporation being the retailer because in some states, the strata legislation has a prohibition on the conduct of ‘business’ by an owners committee (OC). The ACT legislation explicitly says that income from sustainability infrastructure, for example a feed-in tariff, will not count as conduct of business if the income is on par with its utility costs. That is, a PV system big enough to approximately match the OC’s electricity use or cost would be OK but a much larger system would not be OK. On the other hand the legislation in some sates, at least, allows unit owners to enter into agreements for the provision of services with the OC. It might be that having 2KW segments wired directly into each unit is easier for legal reasons.
If the OC can offset its own electricity cost, that would otherwise have to come from levies on owners, then the owners all get a financial benefit so that could work with a singular OC system.
There might also be another reason for the individual connections. Income to the OC is taxable at the corporate rate. Strictly speaking, that ‘non-mutual’ income has to be declared to the owner, and they each have to declare their portion on their income tax (in most states. It depends on whether, in your state legislation, the common property is held in common by owners or in trust for the owners! In the ACT, the Unit Titles (Management) Act allows sustainability equipment to be held in trust for the owner, thereby making the tax considerations much easier. Clearly, there are complex interactions between the way in which a financial benefit is derived, the key tax rulings for OCs, the available feed-in tariff arrangements, constraints on the OC’s conduct of business, the OC’s patterns of electricity consumption compared with the unit/lot owners’ consumption and other considerations.
Whatever the difficulties, it is obvious that flexibility in solar is essential in high density living, which is rapidly increasing in all major cities. Although installing a system in this way is a long and complex process (to see a 1 min installation video click photo below), and might not be a realistic option for existing apartment buildings, it is readily achievable on a new-build projects, and has several advantages; the best being that it offers the future apartment owner, or renter, the same sort of energy independence a rooftop solar home owner might enjoy.
There will be overwhelming buyer support for projects incorporating renewable energy technologies, not only because of the obvious cost-savings, but also because people recognise that this is the way of the future.