Solar power is environmentally friendly and can help reduce your electricity costs. Choose a purchasing arrangement that best meets your needs, as some may end up costing you more than others.
If you are interested in using solar energy, there are a number of options available to you including:
- purchasing a solar system outright or financing it yourself
- purchasing a solar system through an alternative arrangement, such as a Solar Power Purchase Agreement (SPPA) or Solar Leasing Agreement (SLA).
A SPPA is a contract where a business provides, installs and maintains the solar panels in exchange for you agreeing to buy the energy produced by the system at an agreed price for an agreed period.
A SLA is an agreement where the solar provider installs the system in exchange for you agreeing to make periodic repayments on the system for an agreed period.
The major difference between the two is that a SPPA commits you to buying a minimum amount of energy produced by the solar system from the provider at an agreed price, whereas a SLA commits you to paying the provider a certain amount for use of the system.
A SPPA or SLA may benefit you by giving you access to solar energy where you otherwise would not be able to afford to purchase and maintain the solar system outright. However, you should consider all available options carefully to ensure you get the arrangement that best meets your energy needs.
A solar provider must not:
- mislead or deceive you (or try to do so). For example, by providing inaccurate or unclear information in advertising, contracts, product packaging, or by staff
- harass or coerce you to buy solar panels or sign up to a SPPA or SLA
- take unfair advantage of any vulnerability or disability affecting you (this may amount to unconscionable conduct)
- require you 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 you may also be able to cancel the SPPA or SLA under the consumer guarantees. These guarantees cannot be excluded from any contract and apply regardless of any terms and conditions of the SPPA or SLA, as well as any warranties provided.
There are a number of things you should consider before entering into a solar agreement or arrangement.
Understand your needs and choose carefully
- Consider your current electricity needs as going solar often benefits consumers who use most of their electricity during the day. To check your energy usage, refer to a recent energy bill. If you don’t have a bill handy, you can get an estimated usage based on your postcode and household size from the AER’s Energy Made Easy website.
- Choose the correct sized system for your needs, as you may be required to pay for the energy supplied whether you 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 – you or the solar provider?
- Consider whether using solar will affect your current electricity rate.
- Check if the solar provider is a signatory to the Solar PV Retailer Code of Conduct. The code requires providers to disclose clear and accurate information, an estimate of the total amount payable over the term of the agreement and other fees and charges.
Understand what is involved and ask questions
- Read and understand the contract. If you are unsure, ask questions and obtain legal advice.
- Check your ‘cooling off rights’.
- At the end of the contract, consider whether you own the solar panels and who is responsible for removing the system.
Consider the long term cost
- SPPAs and SLAs may last for 5-20 years so consider the long term financial impacts, including:
- how long you intend to remain in the property and how any exit fees will affect you
- whether you will be able to terminate the agreement early if you change your mind.
- Be aware of any agreement that ties you to a particular energy provider, even if they offer competitive prices at the outset, this could change throughout the life of the agreement and may expose you to excessive electricity prices over an extended period of time.
- The overall cost of an SPPA or SLA is likely to be higher than if you paid for the system upfront.
- You are likely to be responsible for two electricity accounts – one from your electricity retailer and another from your solar system provider.
If you have a consumer problem, contact your solar provider directly to try and resolve the dispute. If you can’t resolve the problem, contact your local state or territory consumer protection agency.
Businesses offering SPPAs must hold an exemption under the National Energy Retail Law, as SPPAs provide for the sale of energy. If you think that your SPPA provider does not hold a valid exemption, contact the Australian Energy Regulator.