Renting and solar power in NSW

Renters excluded

Over the last decade we have seen a dramatic uptake in solar panels on Australian homes, but a large portion of the population has been excluded from the benefits: renters. These benefits include lower energy bills and reducing reliance on the energy grid, with its increasing electricity prices. Not to mention using a cleaner energy source and reducing our carbon footprint

A survey in 2023 by advocacy group Better Renting found that the main reason renters want solar is to reduce energy bills. However other non-financial reasons are also a big motivator, i.e. contributing to a cleaner, more sustainable future. But contrary to their desires, renters are being left behind and excluded from the transition to clean energy. 

The barriers to going solar in a rented home

Renters who want to get solar panels installed on their roof tend to come up against major barriers. Individual landlords and apartment building owner corporations hold the decision-making power on whether they will invest in solar panels. Many landlords will not be willing to invest in solar panels because they believe the benefit will go to the tenant, not to the landlord. This is what is known as the ‘split incentive’. There are also some properties that are not suitable for the installation of solar panels. 

If you are a renter who wants solar panels to be installed, it is worth trying to negotiate with the landlord. You could point out the long-term benefit to the landlord of increasing the value of the property. If you are facing a rent increase, you might also suggest that the landlord should use the increased income to improve the property in a way that will benefit the tenant (and the climate). Or you could try negotiating around who pays for the installation. See our resource Tips: Negotiating with the landlord. There are a number of government subsidy programs currently available and your landlord may be eligible for a rebate, loan or a rebate swap if they decide to install solar on the property. See further information on Government rebates for solar installation here. 

When there are solar panels on the home, do tenants benefit?

Where a renter does live in a home which has solar panels they may receive two benefits. The first is a reduction in the amount of electricity they purchase from their retailer by using appliances during the day which makes use of the solar energy that is being generated by the panels. 

The second benefit is for solar that is exported to the grid (i.e. solar energy that isn't being used by the renter) – there is a credit placed on the electricity account. This is called a feed-in tariff. As there has been an increase in the uptake of solar in the last few years, the feed-in tariff offered by retailers has dropped. At the moment the all-day solar feed-in tariff benchmark set by IPART is between 4.9 to 6.3 c/kWh. 

For some renters there have been problems in receiving the feed-in tariff benefit, for example where they are living in shared accommodation, where the landlord lives in the ‘main house’ and rents out a granny flat in the backyard where the renter lives, or even where the owner has kept the energy account in their own name despite living somewhere else entirely. In some of those instances landlords are not sharing the benefits (cost reduction) of solar with the renter, but billing them on the basis of costs as though no solar is installed. The full reduction in costs resulting from solar is only allocated to the landlords' electricity costs.

In 2017 Principal Solicitor at the Tenants’ Union Grant Arbuthnot looked at decisions of the NSW Civil and Administrative Tribunal (NCAT) where solar panels were the issue in dispute – see Solar power and tenants. A couple of those cases looked at the issue of feed-in tariffs and whether this should be a benefit for the renter or the landlord. In some instances, renters were able to receive a benefit from the solar panels, after taking their case to the Tribunal. If you are a renter and you are not receiving the benefit of solar panels on your roof and you believe you should be, contact your local Tenants Advice and Advocacy Service for advice. See also Factsheet: Utilities – water, energy, internet. 

Current government programs

The NSW Government is currently implementing a few programs which they argue increase renters’ access to solar energy.  

1. HomesNSW is undertaking work to provide energy upgrades to social housing properties across the state. This work includes solar panels where the homes are suitable for this type of upgrade. 24,000 homes have been upgraded with another 13,000 properties earmarked for upgrades. It is unclear how many of these upgrades include solar panels. 

Interestingly, the Australian Housing Conditions Dataset shows that across Australia social housing renters are currently more likely to have solar or batteries on their home than private rentals – although still a very small proportion.

2. To increase the number of apartment buildings in NSW with solar panels from the very low current figure of 2% the government has recently launched a solar for apartment residents grant where residents can apply for funds to cover 50% of the cost of solar panels on apartment buildings and other multi unit dwellings in NSW. This has been hailed as a benefit for renters living in apartments as it will reduce their energy bills. Unfortunately for renters they have no say in the decision-making process of an owners corporation and it will be up to the owners of the apartments to make the decision. Where you have a building where most apartments are rented there may be less uptake as landlords won't see a direct benefit in the short term. Better renting in their survey also found that most renters they surveyed were worried that landlords would use solar to justify a rent increase.

3. Community batteries are being set up in a number of locations across NSW through government grants. They are specific to certain areas – so not available to everyone. The batteries can store solar energy during the day that is being generated on local roof tops. If you’re eligible to access a community battery but you don’t have solar, you can use a set amount of energy per day – and receive a rebate on your energy use. The community battery programs that are being run are specific to a retailer so renters would need to sign up to the retailer in their area that is operating the community battery. Find out more on where community batteries are currently operating (Department of Climate Change, Energy, the Environment, and Water)

Solar Gardens

There is a need for more investment and funding for innovative programs that remove the barriers for renters wanting to enjoy the benefits of solar energy. Solar gardens are one solution as they don't rely on the owner of a renter's home to decide whether or not to invest in solar panels and also resolve the issue where the roof of the home is not suitable for solar panels. Solar gardens are solar farms which can be built in a range of places and then energy customers, including renters, can purchase panels in the solar system and receive a credit on their electricity bill for the solar energy that is exported from the solar garden. Similar to the idea of a community garden where you own your own plot. 

Haystacks solar garden is currently the largest solar garden in Australia and is located in the Riverina area of NSW. The model requires you to pay to join the solar cooperative and purchase your 3kW plot and once they have required numbers a solar garden is built in optimal location to maximise solar energy. The first solar garden began exporting electricity to the grid in April 2024. At the moment you have to commit to the retailer that has partnered with this project: Energy Locals. Ideally we would like to see solar gardens move to a model where you won't be locked into one retailer and can choose a retailer. 

What else can be done?

At the Tenants’ Union, we would like to see the government legislate on minimum energy standards in rental homes. This could ensure that rented homes meet a certain energy efficiency standard. It could also incentivise landlords to raise the energy standard of a rental property by installing solar panels and a smart meter.  

The Tenants’ Union is part of a coalition of community organisations, Healthy Homes for Renters, who are  calling on the next Federal Government to provide funding and support to the State and Territories to implement mandatory minimum energy standards. Some of the key asks include:

• Establishing one-stop-shops to help landlords implement home energy upgrades, through access to advice, finance options, and tradespeople,
• Conditional and targeted funding and financing options could be offered to assist landlords in meeting new energy performance standards, coupled with stronger protections for renters, ensuring landlords cannot pass upgrade costs onto tenants through excessive rent increases,
• Mandatory energy performance disclosure, so renters know the efficiency of a home before they sign a lease, and
• Support for workforce development to expand the capacity of trades and suppliers needed to implement upgrades.

Find out more about these measures and sign the petition (Healthy Homes for Renters)

If you get the opportunity to speak to your State and Federal MP’s then we encourage you to raise your concerns about the lack of energy standards in rental properties in NSW and in particular highlight the barriers that renters face in accessing solar energy in their homes.

See also climate change – news and analysis.