Solar Deposits in Australia: When planning to install a solar system, one of the first financial concerns is the deposit. How much can your installer ask for upfront? Is there compulsory insurance involved? To clarify the rules and regulations, we’ve gathered state-by-state and territory-specific details to help you navigate these issues.

Understanding Solar Deposits

Deposits for solar installations in Australia are typically calculated based on the full contract price of the system. This means the amount before any rebates, such as Small-scale Technology Certificates (STCs), are applied.

For example, if you receive a quote for a 10kW solar system that costs $9,000 after STCs, the full contract price (including the value of STCs) might actually be $12,450. In a scenario where a maximum deposit of 20% is allowed, your installer could legally request up to $2,490.

Common Deposit Practices

While some states and territories have specific legal limits, many installers stick to a standard practice of asking for around 10% of the final, post-rebate price. For a $9,000 system, this would be $900. However, the percentage requested can vary, depending on factors like your location or specific equipment requirements.

State and Territory Deposit Rules

1. Queensland (QLD):
   Maximum deposit limit of 20%. Solar systems count as building work, but there is no compulsory insurance for systems under $20,000.
2. New South Wales (NSW):
   The maximum deposit allowed is 10%. If the total cost (pre-rebate) exceeds $20,000, installers must provide Home Building Compensation Cover.
3. South Australia (SA):
   No limit for solar systems under $12,000. Between $12,000 and $20,000, the maximum deposit is $1,000. For amounts over $20,000, the deposit is capped at 5%.
4. Tasmania (TAS):
   No legal limit on deposits. There is currently no compulsory insurance requirement, although this could change.
5. Victoria (VIC):
   No deposit limit in place. Solar systems are not covered under building insurance, and the deposit is negotiated between the installer and the customer.
6. Western Australia (WA):
   No limit for systems under $7,500. For amounts over $7,500 and up to $500,000, the deposit is typically capped at 6.5%, although there is some uncertainty, and in some cases, up to 20% may be requested.
7. Australian Capital Territory (ACT):
   No maximum deposit limit is specified, making deposits negotiable between the customer and installer.
   In NSW, any solar installation exceeding $20,000 requires Home Building Compensation Cover.
8. Northern Territory (NT):
   No deposit limits are in place, so the amount is subject to negotiation.

Compulsory Insurance for Solar Installations

Compulsory insurance rarely applies to solar installations in Australia. However, NSW and WA have exceptions:

• In NSW, any solar installation exceeding $20,000 requires Home Building Compensation Cover.
• In WA, systems over $20,000 might require Home Indemnity Insurance, although the rules are less clear-cut.

Summary of Deposit Limits by State

• QLD: 20% maximum.
• NSW: 10% maximum.
• SA: No limit under $12,000; $1,000 maximum between $12,000–$20,000; 5% for over $20,000.
• TAS, VIC, ACT, NT: No specified limit.
• WA: 6.5% for $7,500 to $500,000, or possibly 20%.

When discussing deposits with your installer, it’s worth asking for clarification if the deposit seems unusually high. In some cases, additional costs (e.g., specialized equipment, difficult installation conditions) may justify a higher deposit.

By staying informed and negotiating wisely, you can ensure your solar journey with Sun Quotes is smooth and financially transparent. Contact us to know more about Solar Deposits in Australia