Solar power and tenants

Grant Arbuthnot, Tenants' Union Principal Legal Officer, discusses three decisions by the NSW Civil and Administrative Tribunal (NCAT). Grant

Each of these three NCAT decisions has implications for tenants and solar power. The decisions are by three different NCAT members over three years. Solar power in the tenancy market usually exists in premises that have previously been in the owner occupier market. This brings new and strange disputes.

Tenant compensated for unrepaired solar inverter

In the first case (2015/17474), a tenant was living in premises which had a set of photo-voltaic solar panels. The tenant had established their own electricity account for the premises as required. However the solar power inverter was not working.

The tenant applied to NCAT for compensation and rent reduction because the landlord had not repaired the solar power inverter.

NCAT found that the landlord’s general obligation to maintain the premises in reasonable condition included the solar power system, as part of the premises.

That the landlord had not repaired the solar power system in a timely fashion meant that the landlord was in breach of the tenancy agreement and liable to compensate the tenant for the loss of feed in tariff.

The evidence included electricity accounts from when the solar power system was working. NCAT calculated the average solar feed-in tariff at $80 per quarter. As the system was not repaired for three quarters, the landlord was ordered to pay the tenant $240 compensation.

National energy law prevents landlord from profiting from electricity

The second decision (2015, referred to in the third decision – 2016/38954) came from the landlord’s NCAT application for an order that the tenant pay the landlord $2,500 for electricity usage at the premises.

The landlord had kept the electricity account in the landlord’s name. The landlord’s view was that they should take the benefit of the solar feed-in tariff as they had spent the money to have the solar power system installed.

NCAT said that the Residential Tenancies Act is silent on whether the tenant is entitled to the benefit of the solar power. The Act says that the tenant shall pay all charges for the supply of electricity if the premises are separately metered.

NCAT questioned the idea that the landlord should be reimbursed for expenses not incurred. NCAT also thought that the capital expenditure position was not sustainable.

NCAT then referred to the National Energy Retail Law (NSW) (NERL). Under the NERL (s88) anyone selling electricity must have an ‘authorization’ or ‘exemption’.

As an exempt seller of electricity, the landlord was subject to the conditions for exempt sellers (class D2) of the Australian Energy Regulator (AER). One of those conditions (#12) requires application of the seller (landlord) rebates to the bill of the customer (tenant).

NCAT treated the feed-in tariff as a rebate and so found that the tenant need only pay the landlord for electricity minus the benefit of the solar power system. This resulted in a benefit to the tenant of approximately $900.

Landlord and tenant share solar benefit despite contract term

The third decision (2016/38954) referred to the second decision and used the same logic regarding feed-in tariff and the exempt seller conditions of the AER.

The solar power system was generating more energy than was consumed in the premises. Nevertheless, the landlord demanded payment for electricity from the tenant ($260).

The tenancy agreement included an additional term – The tenant agrees for the electricity account to remain in the landlord’s name and to reimburse the landlord for all electricity usage upon an invoice being provided to the tenant. There was no discussion or express finding about this term.

The tenant told NCAT that the landlord’s agent had said that landlord and tenant would share the benefit of the solar power.

NCAT was not convinced that the landlord was entitled to payment for electricity beyond what had actually been paid. The landlord had actually paid $100 and the tenant was ordered to reimburse the landlord that amount.