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Solar power agreements
There are a number of options available to consumers interested in using solar energy.
- purchase a solar system outright or finance the purchase themselves
- purchase a solar system through an alternative arrangement, such as a Solar Power Purchase Agreement or Solar Leasing Agreement.
A Solar Power Purchase Agreement is a contract where a business provides, installs and maintains the solar panels in exchange for the consumer agreeing to buy the energy produced by the system at an agreed price for an agreed period.
A Solar Leasing Agreement is an agreement where the solar provider installs the system in exchange for the consumer agreeing to make periodic repayments on the system for an agreed period.
The major difference between the 2 is that:
- a Solar Power Purchase Agreement commits the consumer to buying a minimum amount of energy produced by the solar system from the provider at an agreed price, whereas
- a Solar Leasing Agreement commits the consumer to paying the provider a certain amount for use of the system.
A Solar Power Purchase Agreement or Solar Leasing Agreement can benefit consumers by giving them access to solar energy where they otherwise wouldn't be able to afford to purchase and maintain the solar system outright. However, consumers should consider all available options carefully to ensure they get the arrangement that best meets their energy needs.
Consumer rights and solar systems
A solar provider must not:
- mislead or deceive consumers, or try to do so. For example, by providing inaccurate or unclear information in advertising, contracts, product packaging, or by staff
- harass or coerce people to buy solar panels or to sign up to a Solar Power Purchase Agreement or Solar Leasing Agreement
- take unfair advantage of any vulnerability or disability affecting the consumer - this may amount to unconscionable conduct
- require consumers to buy energy services from a particular third party retailer, unless this conduct has been notified to the ACCC
- breach any unsolicited consumer agreement rules that apply.
If there is a problem with the solar panels or the service provided, consumers may be able to cancel the Solar Power Purchase Agreement or Solar Leasing Agreement under the consumer guarantees.
These consumer guarantees cannot be excluded from any contract and apply regardless of any terms and conditions of the Solar Power Purchase Agreement or Solar Leasing Agreement, as well as any warranties provided.
Before entering into a solar agreement
There are a number of things should be considered before entering into a solar agreement or arrangement.
Understand needs and choose carefully
- Consider current electricity needs as going solar often benefits consumers who use most of their electricity during the day. To check energy usage, refer to a recent energy bill. Without a bill handy, get an estimated usage based on postcode and household size from the AER’s Energy Made Easy website.
- Choose the correct sized system to match needs, as consumers may be required to pay for the energy supplied whether they use it all or not.
- Who will own any feed-in-tariffs - the rate paid for excess energy fed back into the grid - or green energy certificates if they apply. This may be the consumer or it may be the solar provider.
- Consider whether using solar will affect the current electricity rate.
- Check if the solar provider is listed as a New Energy Tech Approved Seller.
New Energy Tech Consumer Code
The New Energy Tech Consumer Code requires providers to meet minimum consumer protection standards when marketing and selling solar systems and other emerging energy products and services.
For example, they must:
- disclose clear and accurate information to consumers and provide detailed quotes for solar systems, including any financial arrangements that apply
- deal with complaints promptly and fix problems if something goes wrong with the solar system.
Understand what is involved and ask questions
- Read and understand the contract. If unsure, ask questions and obtain legal advice.
- Check the ‘cooling off rights’.
- At the end of the contract, consider who owns the solar panels and who is responsible for removing the system.
Consider the long term cost
Solar Power Purchase Agreements and Solar Leasing Agreements may last for 5 to 20 years.
- Consider the long term financial impacts. This includes how long the consumer plans to remain in the property and the impact of any exit fees that apply, as well as whether the agreement can be terminated early if there is a change of mind.
- Be aware of any agreement that ties the consumer to a particular energy provider. Even if they offer competitive prices at the start, this can change over the life of the agreement and may expose the consumer to excessive electricity prices over an extended period of time.
- The overall cost of a Solar Power Purchase Agreement or Solar Leasing Agreement is likely to be higher than if the system is paid for upfront.
- The consumer is likely to be responsible for 2 electricity accounts – one from the electricity retailer and another from the solar system provider.
Who to contact if things go wrong
Contact the solar provider directly to try and resolve the dispute. See Contacting a business to fix a problem for more information.
If the complaint relates to a New Energy Tech Approved Seller, and the dispute cannot be resolved, lodge a complaint with the Administrator of the NETCC program. Otherwise, report the issue to the local state or territory consumer protection agency.
Businesses offering Solar Power Purchase Agreements must hold an exemption under the National Energy Retail Law. This is because Solar Power Purchase Agreements provide for the sale of energy. Report Solar Power Purchase Agreement providers that do not hold a valid exemption to the Australian Energy Regulator.