Question: Are solar panels classed as scheme assets and covered by our strata building insurance?
In our small 3-lot strata, solar panels were installed on all lots over the past year. Can you please clarify the following:
- Are solar installations classed as scheme assets, and should they be included in the asset register?
- Does the scheme’s insurance cover solar panels?
- Does our insurer need to be advised of any solar installations?
Answer: If the solar panels are permanent fixtures, they should be covered by the building’s insurance.
Q1: Are solar installations classed as scheme assets, and should they be included in the asset register?
Leanne Habib: If the solar panels are permanent fixtures, they should be covered by the building’s insurance. The by-laws applicable to the scheme will determine who is responsible for the ongoing repair and maintenance of solar panels. If the owners corporation installed the solar panels for everyone, it will usually retain responsibility for ongoing repair and maintenance. If individual owners install the panels, a by-law will usually confer the responsibility on the owner.
Q2: Does the scheme’s insurance cover solar panels?
Tyrone Shandiman: Yes. As they are permanent fixtures, solar panels are covered by the building section of a strata policy. If the solar panels are not permanently attached to the property, they are not covered by strata building insurance.
Leanne Habib: Generally speaking, yes, as they are generally deemed part of the building fixtures subject to the installation. However, you will need to check the policy terms and with the subject insurer.
Q3: Does our insurer need to be advised of any solar installations?
Tyrone Shandiman: It depends on your insurer. At present, we know of only one insurer that specifically inquires about solar panels when quoting. To ensure you’re covered, we recommend consulting with your insurer.
Leanne Habib: We recommend that the insurer is advised of any building improvements to ensure that such improvements are properly insured and covered.
This post appears in Strata News #705
Leanne Habib
Premium Strata
E: info@premiumstrata.com.au
P: 02 9281 6440
Tyrone Shandiman
Strata Insurance Solutions
E: tshandiman@iaa.net.au
P: 1300 554 165
This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisenent Australia AFSL No 240549, ABN 15 003 886 687.
Re an insurance claim on Strata Insurance, in respect of a solar PV installation; where only one solar PV owner is affected.
My question is, can the relevant solar bye-law include a cause, to the effect that the owner of the PV installation, the subject of an insurance claim on the OC, be solely responsible for payment of the Excess to the insurance company?
It seems unfair to me that all owners, through the OC, should have to contribute to an insurance claim, by paying the excess, (in our case $1000-1300 for each claim) where the claim benefits one owner, and is directly caused by the action of that owner, by having soar PV installed ,
In the largest study of it’s kind in the Australian strata space, we have just mapped over 49,000 strata buildings across 29 local government areas in Sydney. The results of the Electrify Strata project are at: Together, Let’s Electrify Strata.
Separate maps are available for each local government area, with a separate drop-pin for each strata building and whether it has solar, batteries, EV charging, heat pumps, electricity monitoring devices, embedded networks or completed a NABERS for Apartment buildings rating.
Solar penetration on strata buildings in Greater Sydney has now passed 3% penetration. This is up from 0.6% penetration back in 2019 which shows there has been a terrific amount of progress in the installation of solar on strata rooftops in both new developments and existing strata building retrofits.
If you intend to use a common space i.e. a roof of a complex or several residencies that space is common area not owned by any person individually. If your SC allows you to install solar for private use you will be charged a rental fee basis to the allotment being on the roof it is being rented for private use if it qualifies for insurance the panels being permanently affixed are covered under building insurance but as the panels are for private use the sum allotment for insurance of such solar is an additioinal cost of insurance where tyhe rental fee applies not only to the roof space being used for solar panels but the insurance extension to cover for damage.
This is already a situation many who think their common area is solely for their exploitation find that solar is not worth the extended insurance cost which cannot be removed or changed due to tye fact the solar panels are affixed permanently to the existing structure. Singular ownership or exclusive use of solar affixed permanently to a common space poses a problem in that the space has been used by one owner and therefore cannot be shared unless a new contract and building inspection of completed works is signed off by the building manager or managing agency.
You cannot change a stipulation by SC agreement. The Strata Manger will send their engineers to assess the validity of such panels, their position, access, maintenance and the weight or phgysics of noew affixment of panel array and equipment. This cost will be passed on to the owner as the panels must meet the building code of roof affixments and safety because it is not a private single residency structure even if it is a single villa, it is part of a strata allotment of common roof maiontained by contratced roof maintenance.
If you do not follow SCMA guidlines you may find yourselfd answering questions to lawyers and paying fines and the cost of removal of solar panels deemed illegal by a COURT DECISION.
Just remember – you do not own a space unless you can proove unequivically with genuine evidence you pay strata fees for that space. No person in a penthouse appartment pays for their roof space. It is a common space maintained by Administration Fund outlay.
I live in a 3 story apartment, therefore not all units have a roof. Some owners have expressed desire to have solar on the roof for their benefit, not communal benefit. The strata committee knows that the roof is valuable space, capable of generating income for strata. However this may not fully be known for many years. Some space on the roof achieves high solar output and some achieves low solar output (due to partial shade). Appreciate any comments on how we can achieve a good balance between individual owners wants and the wants of the strata (i.e. benefit for all owners) in splitting up the roof space. Want to avoid a “First in best dressed” scenario.
Is there anyone qualified whom can look at a roof and equitably define how it should be divided so that all parties have a equal share in the solar efficient areas of the roof ?
I am thinking of putting solarpanels, our villa is rented at the moment , I have told our strata manager that I would like to see an item on the next AGM , I was told that in order to have a by-law for those panels, would be in the order of $1500 to $2000 , there are 16 villas there , that may equate to $100 per villa…..
Hi David, how did you go with this project? I am delivering a webinar for strata owners this Thursday 29 April 2021 about by-laws for the implementation of solar. I am interested in your experience, so I can better help others in your position.
Hi Amanda
We would like to implement solar in our complex in QLD, together with an embedded network to sell power to units in the complex.
After the investment cost is paid the ‘free’ solar power will generate a surplus we intend to put to Body Corporate funds.
BUT some have advised we cannot do this because ‘a body corporate cannot make a profit’.
Have you come across this problem and found any solutions? It seems a disincentive to invest in solar for QLD strata.
Hi Phil
Michael Kleinschmidt, Stratum Legal has responded to your question on this post: QLD: Q&A Permission for Installing Solar Panels in Body Corporate
Hi,
I was able to put solar panels in a unit of 6 apartments in Newcastle NSW.
I divided the roof space up into 1/7ths as 1 solar install was for common area solar.
Engaged a by-law change via a lawyer for $900 which was divided by 6 unitholders.
Obtained a BCA certifier for regulations for $500.
Conducted an EGM and got > 75% say yes after providing info prior to the EGM to committee members for a $200 manager fee for the meeting.
Then installed 2 x 3.75KW solar systems and a 5.27KW common area array.
Charged the 2 unit renters and extra $10/week rent and they saved $22 per week off their energy bill.
The common array has meant we have had no energy bills for the last 12 months.
We also had to pay for a meter upgrade of $400.
You have to do your research as I am not an installer I cannot give professional advice but could give some tips if lookup strata or commenters wish.
Sincerely,
Jason