The STC price has plummeted and pushed the price of solar up. What should you do if you’ve already accepted a quote and the installer wants to increase the price?
I’m going to ask you to imagine preparing to buy a rooftop solar system. I want you to see yourself working hard, saving your money, doing your research, and getting yourself some quotes. After careful consideration, you decide upon an installer, sign the contract, and transfer a 10% deposit to them. At that point you would be looking forward to saving money on your electricity bills and doing your bit to help the environment.
Now imagine how you’d feel if, before the day of the installation, the installer contacts you and says the price has gone up and you now have to pay $1,000 extra.
I imagine you wouldn’t be very happy about it.
Unfortunately, this is the situation some people have found themselves in over the past two weeks as the price of STCs that lower the cost of rooftop solar have undergone a 20% fall from $37 to $30 and some installers have made use of clauses in their contracts that allow them to raise their quotes in response to changes in STC prices1
If you are in this situation, your options depend on how your installer quoted and sold you the system.
Situation #1 Your installer was clear and upfront that the total system price could change with the STC price.
In this situation, your installer absolutely has the right to change the price to reflect the lower value of STCs, and you agreed to that when you accepted the quote. Ideally the installer would have verbally told you and also included it in the ‘large print’ on the contract. Your options are either: accept the new price or cancel the deal.
Situation #2 Your installer was not clear and upfront that the price could change.
If the installer relied only on small print, and at no point advised you that the small print allowed the price to change (or does not even have it in the small print) then under my understanding of Australian Consumer Law, if a reasonable person would have concluded the original quote was the final price, then they cannot be required to pay more, no matter what it says in the fine print of their contract.
You may decide not to go ahead and get your deposit back, but…
- There is no guarantee you will find anyone who will do an installation at a price that is better than your original installer’s new price.
- There is also no guarantee STCs will worth more in the future
- Each day you don’t have solar installed is a day that you lose money by not having your electricity bills reduced.
In theory, if the ‘large print’ did not disclose the price was variable, you may even have a legal case to try and force the installer to do the install at the price quoted, although I’m not sure how this would work out practically.
But if you find yourself in Situation #2, after you understand why this situation has arisen you may decide that the best solution is simply to talk to your installer and see if you can arrive at a situation where you get solar on your roof while the installer also receives fair compensation for their work.
The Fall In STC Prices Caught Many Installers By Surprise
Until this month, STC prices had been been close to their maximum price of $40 for years. Many newer installers have never seen a significant drop in STC prices and, because they were stable for so long, even old hands were caught by surprise. An $8 fall in STC prices increases the cost of a 6.5 kilowatt system for most Australians by just over $1,000. Because margins are so thin in the solar industry, this means many installers won’t just make less money, but they will be lose money on every installation they do at the old price. So many felt they had no choice other than to raise their quoted prices.
If Quotes Aren’t Final It Must Be Made Clear
I am not a lawyer, so I’m not giving professional advice here, but my understanding of Australian Consumer Law is, if a reasonable person would conclude a quote they were given was the final price for a product, then they cannot be required to pay more, regardless of what it may say in the fine print of their contract. Fine print cannot change what large print says or what a customer is verbally told2.
So if you are a reasonable person and you are surprised when your installer says you need to pay more than what you were quoted because STC prices have changed, it strongly suggests your installer did not make it clear enough their quote could change if the STC price dropped.
The way I see it, Australian Consumer Law requires installers to either make it very clear their quotes are only estimates and contain an STC component that is variable or they have to be prepared to swallow the loss that occurs when STC prices fall after they have given a quote.
You Can Get Your Deposit Back
If you reasonably conclude from the information an installer gave you that your original quote was the final price and you decide not to go ahead after an installer increases the price, then you are entitled to receive your deposit back. This is because you haven’t done anything wrong. As far as consumer law is concerned you had agreed to a price and you were willing to uphold your end of the deal.
If your installer is reputable they will happily return your deposit. (Not returning deposits in these kinds of situations is one way of becoming a disreputable installer.) But there are dodgy companies out there, some of them quite large, who try to make it harder to get your deposit back from them than getting a pork chop back from a dingo. They generally crumble when faced with legal action and if you do have to take an installer to a consumer tribunal or small claims court, then unless your quote made it very clear the price given was an estimate only, I am certain they would be required to return your deposit.
Businesses Have To Pay Attention To Small Print
Australian Consumer Law only applies to goods or services that meet the following conditions:
- They cost $40,000 or less.
- Cost more than $40,000 and are normally used for personal, domestic, or household use.
- Are a vehicle or trailer used mainly to transport goods on public roads, no matter how much it costs.
As it is quite possible for a large commercial rooftop solar system to cost more than $40,000 it can be very important for businesses to pay attention to small print. Especially since it’s hard to use them for mainly transporting goods on public roads.
Being Reasonable Is Not Unreasonable
I don’t think anyone should be required to pay more than what they were originally quoted unless they knew the original quote was only an estimate and were fine with it changing in response to changes in STC prices.
But if a household decides not to go ahead with an installation after its price is increased, it means they suffer the drawback of not having rooftop solar, which can still be worthwhile even with the fall in STC prices. This is especially true now electricity prices and most feed-in tariffs have increased. While paying more than you believed you needed to is not an optimal situation, not getting the solar you wanted is also far from optimal.
If you find yourself in this situation, I would consider simply talking to your installer and see if you can work something out.
In such a situation good installers who have not explicitly warned you that their quoted price was subject to the STC price should accept some of the loss that results from the fall in STC prices in the spirit of finding a good compromise that is viable for both parties.
Footnotes
- You can learn how STC prices affect the ‘Solar Rebate’ here. ↩
- This is a fact that many consumers and businesses in Australia are unaware of ↩
About Ronald Brakels
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Did the installer change the actual price of the equipment and labour, or just reduce the total payable by a smaller rebate proportional to the reduced value of the STC’s?
Spot on John. The solar equipment cost is fixed, the solar installation cost is fixed, the STC quantity is fixed… But the stc value is not. Why should legitimate solar installation companies take a hit on something that is totally out of their control?
They shouldn’t – which is why they disclose that up front and are free to increase the price to cover the STC drop because they have done the right thing.
In most cases the STCs never belong to the installers, They belong to the customer, as a reward for installing solar power. They are then sold directly from customer to aggregater. The installers sit in the middle of nowhere and are forced to take a financial risk to make it easier for someone to install that solar power system. Most responsible installers make some rounding up coins out of the transaction and certainly can’t afford to lose a cent if the price drops. Can’t there be a better system than this!!!!
Nothing wrong with the system provided the there is a full disclosure as to how the quote is calculated and how any variable like STC value is applied. You would be forgiven for believing that an offer that is silent in respect to the STC’s might favour the installer in the case of increasing STC values. I am not sure that when you sign the assignment that it actually discloses the value of the STC on any specific day date.
Hey Ron..
Avid reader of your yarns and solid advice.. awesome and thanks..
I got a quote $6000 installed 20|280w Qcells with Fronius 5 kw inverter..
The installer sez “no can do 280, can do 260” … I go gimmee 3 more panels for the same price or I’ll keep looking?…
They go excellent.. can do…
The installation crew said … not a bad deal …. well played.
What I’m referring to is the ability to negotiate as the buyers market takes precedent.
Total regards
Mick
Ronald, the other option is for the customer to pay the full price and save the certificates for a rainy day. The reason I say this is because the drop has only occurred because of an oversupply of certificates and an reduced uptake of buyers. A return to old STC price levels of $38-40 could once again occur as the uptake returns. Perhaps an article on how to sell or trade STCs might help people decide. Cheers Peter
Hi Ron,
Firstly, I love the work you guys do and love the Blog posts – But you are stepping into dangerous territory with this post. The overall theme of this blog is that consumers should almost be seeking a way to get out of paying the difference in the net system installed cost due to the falling STC price.
Australian Consumer Law is a minefield and unless you are a multinational corporation with lawyers on your books (able to dispute ACCC rulings), Australian Consumer Law favours the consumer and small businesses don’t have the finances or resources to challenge rulings.
Your comment ” if a reasonable person would conclude a quote they were given was the final price for a product, then they cannot be required to pay more, regardless of what it may say in the fine print of their contract. Fine print cannot change what large print says or what a customer is verbally told”
As the owner of a very reputable solar installation company that is listed as a CEC Approved Retailer – with the most consumer friendly T&C’s you could ever imagine….I can tell you that we can verbally emphasise that STC values are not fixed to customer until the cows come home, but there will still be some clients who claim to not being aware of price fluctuations & your comment suggests that if a customer can “conclude” that their NET after STC Price was their final price then they should be seeking to have the installation company honour the estimated price.
This industry needs stability and the problem is that you have 100’s if not 1000’s of tradies who are great electricians but not experienced business operators. If you are a business, you need a healthy GPM – not so you can buy the latest VW Amarok V6 – but to ensure the long term survival of your business and to keep your staff in employment. Solar Companies are being squeezed on GMP trying to compete with some of the less desirable national companies with HQ overseas and India based call centre operators. If they absorb these STC price drops for fear of clients taking them to ACCC or Fair Trading (based on an interpretation of your blog) it could be the end of them,
A successful solar business needs to maintain a healthy GPM to enable it to honour (& see out) the product and installation warranties it offers. Buying 20 x 280w Qcell panels and a Fronius 5kW inverter for $6k installed (like Mick Cooney) boasts about is simply too cheap. Mick..I bet you that the solar company or installer that you bought that system from is NOT around in 2-3 years. Anyway, the point is, It is in the interest of consumers that the company that sells the solar equipment is around to service (warrant) that equipment. If you are a consumer & you think you are winning a ‘negotiating’ battle by getting the solar company to foot the bill for something that is out of their control, then you are essentially trying to eliminate your long term product and installation warranty.
Note: my response above is only applicable to those companies who are transparent with their clients about STC price change and who do have consumer friendly T&C’s. I simply don’t want consumers to think it’s in their interest to have a crack at fighting a net system price adjustment because your blog suggests it.
Mark,
I think Ronald is very clear that – if the solar company has explicitly explained that the price is subject to change if the STC price changes, as you do (as per the CEC approved retailer code of conduct), then the consumer should accept the new price or, if they think it is unacceptable, get their deposit back. Those consumers signed up under the clear understanding that the price might change. If your contract makes that clear in the large print then any reasonable person will be aware that the price is variable. You have done the right thing.
Unfortunately there are many consumers who have accepted a quote and been led to believe that the price is fixed, and they are the people that have the option of negotiating to split the difference, as the solar company is at fault if they were not clear about the price being variable.
I edited the post slightly to make the distinction between the 2 situations absolutely clear: #1 variable price clearly disclosed and #2 variable price not clearly disclosed.
Best Regards,
Finn
Thanks Finn,
I just worry that clients may think that its worth trying their luck with a complaint to the ACCC or Fair Trading – rather than paying/accepting the difference in cost – even if the STC price change is clearly explained and very visible in the company T&C’s.
Your amendment does clarify the issue better – thank you.
Cheers
Mark
If the value of the RET’s as at a nominated date time is set out in your quotation and that the value will be determined on the day of billing or completion of the installation which ever occurs first and that is what the customer has relied and it is in plain english and he has signed the quote and you are holding the original then I would think the decision as to where you go would be after taking appropriate legal advise. Rules in relation to offer and acceptance can be quite complicated.
Argh. This is what im afraid of. Got my solar booked for installation next tuesday (provided by a business from this site). So I have no idea what i’m up against next week, and have not yet had any communication from the installer, and im too afriad to reach out to them.
I signed the initial quote on the 28th June, although in the fine print ‘Solar Subsidy may change without notice and could vary the amount indicated above’.
My quote is on the high side as it is (quality panels and invertor), but I didnt do any sort of bargaining from my end.
Guess we’ll see next week…
Got mine installed tuesday, was the quoted price. Extremely happy and relieved.
Ron
Tonto has asked me to remind you that notwithstanding the variation in STC prices his birthday is almost here – SO GET CRACKING WITH THE PRTY FOODSTUFFS!
He gets a party cabbage for his birthday. (Same as my children.)
Ronald
Contracts state a price which can be fixed or variable.
Variable … in that prices of goods supplied which are out of control on the installer/tradesperson will be charged to the final payment.
There is an unspoken rule that 10% is the norm to cover these unforseen price increases over and above the contract quote.
The 10% can also go the other way and the final cost can reflect this as a saving as well.
As for paying an extra $1,000 along with the reduced buy-back price into the grid, it may well be better to go completely off the grid and go it alone with a battery system.
The issue is with the documentation [quote]. I used to prepared FIS free into store quotes in Australian Dollars for produced that was shipped FOB free on board [Germany, Japan, USA and other places]. In the day most of the overseas transactions were done in US Dollars. We made a clear statement that the FIS value was subject to an exchange rate that was disclosed in the quote and that any variance would be at the clients cost.
I contacted Office of Fair Trading as i was asked to folk out additional money just a few days before the install date. I was not informed about any price changes and thought i was lucky i signed up and put a deposit down before the STC price dropped happened. Anyway the lady at OFT asked me straightaway, is it in the contract? I said “yes” but they did not mention it at the time of signing and it a small print at the bottom of T&Cs somewhere. She told me its my bad luck and they had every right to change it. So i am stuck, either pay the higher amount they’re asking for or get a refund and wait to see if the price goes up.
While I understand your predicament, I am glad that the Office of Fair Trading has ruled that T&C’s in respect to STC price change do constitute a legitimate reason to amend the net payable contract amount. The reason this is good, is that people who were informed (and I do not doubt for one minute that you were not) may simply say they were not informed to try and get themselves out of a contract price increase. If Fair Trading had of ruled in your favour based on ‘hearsay’ then the consequences could have been very bad for legitimate solar companies like mine, where EVERYTHING is on the table and is black and white.
That being said, It’s simply not right that the company that sold you that equipment did not mention that the STC price is not fixed. I would be looking to negotiate with them to share the price drop cost implications.
If they don’t budge, you do have options. These are the options that we are presenting to our customer who might struggle with the increased system cost.
1. Amend the solar system design so that there are fewer panels installed now, with a view to installing the extra panels when 1. Panel prices drop further and 2. If and when the STC price recovers.
2. Change the system spec – I am not sure what panels you were sold, but you could ask the company if they have another brand of tier 1 panel available – maybe 260w instead of 270w etc. You can do the same with the inverter brand or size.
3. Hold on to the STC for a later trade. The price will recover, but it’s a gamble on how long it will take. Note – be careful not to let the STC’s expire. They have to be registered within 12 months of installation.
4. Cancel with a full refund.
I hope this helps & sorry about your situation – Mark
I greatly appreciate all the excellent information provided on this site. It has helped me to really understand what I needed to know in order to make an informed decision regarding a solar system. Even though my 2 person household averages 14 kWh per day I was told this 20 panel system would be financially advantageous over coming years. So I was convinced to buy more than I had originally estimated.
My present situation is causing me headaches. The visit from the company man was on the day before the STC price dropped by $12 for the 20x 290w RECTP2 panels with Enphase S230 inverters – 119 STCs. I was told if I signed the contract at once and paid 10% they would wear the drop and keep the price at $6 235 which I thought was very reasonable for that size system. So the next day I attended their office and paid $623 on 20/7/2017. Unfortunately when the installers came out a week later they said they couldn’t do the job as they needed edge protection and harness for my steep, high Terracotta Tile roof – even though photos were taken by the company man at the time of the site visit. After getting quotes from a scaffolding firm a few days ago, they e mail me today saying they ‘forgot’ to add $400 for tile roof in the quote and in error only charged me $100 for hot water timer instead of $200 etc etc and the total extra now comes to $2 600 for all the above BUT they are prepared to complete the job for an additional $1 500. However Terracotta Tile is written in the contract. I don’t see why I should contribute to their $500 under quoting errors. I think claiming the extra cost is $2 600 is exorbitant. I don’t believe I should pay extra $1 500…..maybe $500 or $1000 or….? Is $7 700 odd still good value for this system. I do believe in paying fair price for products but don’t see why I should pay for their slackness and incompetence, even though they took the hit on the STCs. They offered to refund the deposit but I would still like the installation to be done. What do you suggest?
Joe,
If they quoted a job as a fixed price then they have a duty to do it for that price. If they quoted but made it clear that the price could change, then they do have the right to vary the price.
Assuming the former, then the question becomes, how do you practically force a company to do an installation?
You can go to your local tribunal and force the matter, or simply start again with a different company.
Hope That Helps,
Finn
Thank you Finn for your answer. I actually spoke to your Robert yesterday in detail about all this. Then in the afternoon went and spoke to people at the company. They were very understanding and had not seen the e mail to me from the ‘marketing man” and undertook to look into the matter and sort it out. I was very satisfied with the meeting and eagerly await the outcome expected next week. Watch this space.
Best regards and thank you again for all your help. Joe
Imagine that LiveSolar change their fixed quote at lunchtime because they realise they will not finish until the next day.
Imagine we agree on a small amount of increase because I feel blackmailed. After they have broken over 10 roof tiles and said they were going to remove what they have installed after waiting months for installation.
Then imagine they charge my credit card even more than agreed and the CBA Bank says they will not get involved because there is a contract…. even though it clearly shows a cheaper installation.
The workers said it happened all the time!
Live Solar are to be avoided at all costs.
MrCyberdude
Can I ask why you picked this company in the first place? What sold you on the company?
Very few companies were interested in installing in Traralgon Victoria at the time as I wanted Micro Inverters.
Gippsland Solar’s quote was too expensive compared to all of the others.
Their phone call sales team were slick and made promises that their installers couldn’t deliver as well.
I had everything in writing and they still tried it on, and they were partially successful in ripping me off.
MrCyberdude