Why do so few apartments in Sydney and Melbourne have cost-saving solar panels?

Energy consultant Brent Clark estimates that a measly 3.3 per cent of greater Sydney’s 49,000 apartment buildings have solar installed. In Melbourne, there are probably fewer.

Why are so few apartments benefiting from solar?

It’s a question that has long frustrated governments and apartment dwellers, particularly as Australia is a world leader in rooftop solar rollouts.

Doncaster apartment residents Arvin Samimi, Seppi Koskarti and Wendy Rawady worked hard to get rooftop solar panels installed.Credit: Eddie Jim

Some 3.9 million Australian homes and small businesses – more than third – have solar power systems on their rooftops that now generate about 11.2 per cent of the country’s electricity supply, says the Clean Energy Council.

And new solar installations on homes are still setting records.

New South Wales installed the most annual capacity of any state in 2023, Queensland’s installations sped past 1 million, and around 700,000 rooftops in Victoria have panels.

“Solar for apartments was in the too-hard basket for a long time,” says Cameron Knox, chief executive and co-founder of solar system manufacturer Allume Energy. “The focus really was on the lower hanging fruit of standalone homes.”

That focus is changing, albeit slowly.

When it happens, it’s being driven by people like Craig Richmond, who lives with his family in a block of eight apartments in Sydney’s Balgowlah, and Wendy Rawady in her Doncaster apartment in Melbourne.

Panels now cover half of the Balgowlah apartment building’s roof.

The 24-kilowatt system, which Richmond championed, cost $50,000 to install, but there were extra expenses – $13,000 to upgrade the switchboard and meters, and another $5000 to prep the roof for the panels. That cost was divided among the eight owners.

“We had a lot of on-site meetings, I’d say at least three or four, just to discuss costs in the process,” Richmond says. But last summer his family had no energy bills for two months, and, overall, they use about 35 per cent less energy, he estimates. “We’re really looking at probably seven years to get our money back.”

Knox says there is a common misconception that apartments lack roof space and aren’t suited to solar rollout or other forms of renewable energy. But, he says, most apartment blocks in Australia are low-rise walk-ups between two and five storeys tall, with plenty of common roof area for solar panels.

In Sydney and Melbourne, about two-thirds of strata buildings have less than 50 lots, according to University of New South Wales research. Just 2 per cent of apartments across the country are in high-rises with 50 lots or more, although the combined total of their units makes up the remaining third of all lots.

Australia is a world leader in rooftop solar installations.Credit: Rob Homer

Blacktown council in Western Sydney has the highest penetration of apartments with installed solar, around 13 per cent, says Clark. The reason? “Blacktown is the most dense new development area of Sydney, and new developments go in with solar.”

This masthead was unable to source similar data for Victoria.

Clark, who runs the energy consultancy WattBlock, is clear on what’s hindering the solar rollout.

“The number one barrier for strata buildings is this: roughly half of all apartments in Australia are let to tenants, in other words, they’re owned by investors,” he says. “Owner-investors just haven’t been on board because they’re not getting a direct benefit from the solar.”

‘You need community champions who are really engaged in trying to create impact.’

Allume Energy’s Cameron Knox

Without their support, it’s difficult to get the quorum (50 per cent in NSW and 75 per cent in Victoria) required to pass a special Owners Corporation (OC) resolution needed to approve energy-efficient upgrades to a strata building. There are other barriers too, Clark says, particularly ageing electric meter boards in NSW’s apartment buildings and the potential roof upgrades required ahead of a solar installation.

Any work over and above buying the solar panels and installing them poses a financial burden for owners and investors. However, there is a silver lining for those willing to seize it.

According to Domain’s 2024 Sustainability in Property report, energy-efficient homes attract greater buyer interest, around 16.7 per cent, and sell 4 per cent faster than equivalent dwellings without green features. Two-thirds of home buyers prefer energy-efficient homes when given a choice, and are willing to pay more. Green homes and apartments attract a price premium of 14.5 per cent ($112,000) and 11.7 per cent ($70,000) respectively, it estimates.

Knox says that in addition to the financial challenges, there is the difficulty of securing buy-in from multiple owners and co-ordinating the rollout. “You need community champions who are really engaged in trying to create impact,” he says.

Rawady fits that role. She and her husband moved back to Australia in 2018 from Mexico, where they had lived in a solar-powered home. The couple were keen to connect panels in their Doncaster apartment block.

Before that could happen, they needed to gain support from others in the building, create a volunteer system for basic maintenance and gardening to save money, and install a new OC that was willing to back a solar rollout. “I know everybody’s name, and I know their children’s names, their dogs,” Rawady says, after going through the lengthy process.

Other residents, Arvin Samimi and Seppi Koskarti, helped organise meetings, get solar quotes, pass a special OC resolution, and apply for government rebates, a time-consuming and onerous task, she said.

But after applying for a rebate in May, the 39.4-kilowatt system was installed in November.

The apartment-specific rebate – which will be replicated in NSW – covers up to 75 per cent, and in some cases all, of the cost of installing panels. It is open until February next year.Credit: Louise Kennerley

“We haven’t had our first bill yet,” says Rawady, estimating it cost each owner about $500, plus an extra $150 each for a crane to lift panels onto the building. The bulk of the cost was soaked up by Solar Victoria’s rebate program. However, saving money wasn’t their main motivation. “Most people were thinking about the environment,” she said.

Solar Victoria’s chief executive Stan Krpan said about 365,000 Victorian households had so far benefited from $34 million over two tranches in joint federal and Victorian government rebates, primarily through funding for solar, batteries and hot water installations.

An apartment-specific program – which will be replicated in NSW – covers up to 75 per cent, and in some cases all, of the cost of installing panels. It is open until February next year.

“That’s a $2800 rebate per apartment, and that should guarantee them about a $500 saving per year per apartment,” Krpan said. “The idea is that it’ll reach up to 10,000 apartments in the two tranches. We opened the first tranche in February, and we got an overwhelming response,” he says.

Knox’s company, Allume Energy, has solved another challenge that was also holding back rollouts – it manufactures solar splitter systems in a factory in Dandenong, in Melbourne’s south-east. The boxes plug in behind meters to efficiently and fairly share energy from rooftop panels across apartments.

“Every 100 milliseconds, it [the splitter] makes decisions on where the solar should go based on how much of their allocation each unit has received, and how much power they’re using at that point in time, enabling them to maximise savings,” he said.

Owners in both apartment buildings are now considering putting the sun’s rays to other uses.

“We generate 10 per cent more power than we use [in the building],” says Richmond. “We’re talking now about how we can put car chargers and individual batteries into people’s garages.”

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