The Solar Deposit Dilemma: How Much Can Installers Really Ask For?

How much deposit can solar installers request – and does compulsory insurance apply? Find out in our state-by-state (and territory) guide.

In this blog post, I reveal the maximum deposit solar installers can legally ask for. This information wasn’t easy to obtain. I began by searching the websites of state and territory government departments and—for the most part—failed. This may come as a shock to you, but the internet doesn’t always contain accurate information.

This left me with no choice other than to pick up a phone and call a large number of government departments.  Now I’ve survived that experience, I’ll not only tell you what they said but I’ll also rate their hold music from 1 to 10.

If you just want a quick summary and aren’t interested in the details of deposits or the mental torture I went through to get them, skip to the end of the article.

Deposit Limits Are Based On Full Contract Prices

Maximum deposit limits in states and territories are based on the full contract price of solar systems.  This is the price before it’s reduced by STCs.

If the letters “STCs” confuse you, don’t worry.  They simply stand for “Small-scale Technology Certificates” that are part of the solar rebate, which isn’t really a rebate but a financial incentive, and its real name is the Small-scale Renewable Energy Scheme or SRES, which is a SRESiously difficult acronym to remember.

Now you’re no longer confused, I’ll give an example of how it works:

If you get a quote for a 10 kilowatt solar system that costs $9,000, this will be the price after the value of STCs is subtracted.  For most Australians, in 2024, the STCs on a 10 kilowatt solar system will lower its price by about $3,450.  Assuming that is the reduction, the full contract price of the 10kW solar system would be $9,000 plus $3,450 which comes to a total of $12,450.  Because any legal maximum deposit will be based on this full price, if the maximum is 20%, the installer could legally ask for up to $2,490 as a deposit.

A 10% Deposit After Rebate Is Common

While installers can often legally ask for more, the most common deposit for solar is 10% of the system’s price after STCs reduce it.  So, if the customer is paying $9,000 for a system with a full contract price of $12,450, the usual deposit would be $900.

Requesting a deposit of 10% of what the customer pays is a rule of thumb for installers rather than an actual rule, but it is very common and what we recommend.  If your installer asks for a higher deposit than this, it doesn’t mean they are doing anything wrong, but you may want to ask them why it’s more than the usual amount.

Some not unreasonable reasons to ask for a larger than normal deposit include:

• You live beyond a black stump
• You’ve requested hardware the installer doesn’t normally stock
• The roof is high enough off the ground to require additional safety equipment, cherry picker rental, etc.

Image credit: Jet Solar Pty Ltd

Compulsory Building Insurance For Solar In NSW & Maybe WA

When I called the government departments, I asked if solar installations were covered by compulsory building insurance. I found out that it rarely applies.

The clear exception is NSW, where a solar installation must be covered by Home Building Compensation Cover if the total cost is $20,000 or more.

The unclear exception is Western Australia where a solar installation over $20,000 may require compulsory Home Indemnity Insurance — or it may not.  I asked for hard and fast guidelines, but they only told me things that were floppy and slow.  If you get a system in WA that is $20,000 or more before the price is adjusted by STCs, you’ll have to talk to your installer about it.

QLD – 20% Maximum Deposit

The first government department I called was the Queensland Building and Construction Commission (QBCC).  They told me installing solar counts as building work but it’s not covered by compulsory insurance under the Queensland Home Warranty scheme.  They also let me know the maximum deposit an installer can legally ask for is 20% of the full price of a solar system.

Hold Music Rating:  After listening to an automated message I pressed a number and was put straight through to a human.  I didn’t even get to hear their hold music.  For this, I rate the QBCC miracle/10.

NSW – 10% Maximum Deposit, Insurance If $20,000+

According to the NSW Home Building Amendment ACT 2014, the maximum deposit allowed is 10%.

The NSW Government Department of Fair Trading states the same 10% maximum on this page on contracts, and again on this page specifically about solar.

If the total cost of labour and materials exceeds $20,000 before the value of STCs are subtracted from the price, then the installer must provide you with a certificate of cover under the Home Building Compensation scheme.

Hold Music Rating:  Because NSW was the only state that had all the relevant information clearly laid out online, I didn’t have to call anyone at all.  For this reason, I’ll give them a rating of ultra-miracle/10.

SA – No Limit Under $12,000

I called the SA Consumer and Business Services and was told solar isn’t covered by building indemnity insurance.  They also told me about the state’s deposit limits, which are:

• No limit under $12,000
• Maximum of $1,000 deposit from $12,000 to $20,000
• Deposit limit of 5% for amounts over $20,000

Hold Music Rating:  I called at 3:05pm and they answered at 4:15pm.  Fortunately, it was on the same day, so I was only on hold for 1 hour and 10 minutes.  In South Australia, it was chime time, and that’s what I listened to all the while I was on hold.  I was given the option of having them call me back, but I was enraptured.  Around the 1 hour mark, I hallucinated I was in a forest of chiming crystals played by fairies.  I snapped back to reality when the phone was answered, but they put me on hold again after two minutes.  Insanity/10.

Tasmania – No deposit limit

I called Tasmania’s Consumer Building and Occupational Services and was told there’s no maximum deposit for solar, so deposit amounts are negotiated.  There’s no compulsory building insurance scheme because Tasmania got rid of it, but one may be reintroduced in the future.

Hold Music Rating:  I was on hold for six minutes, but I can’t even remember what the music was like because my mind was blown by their pre-recorded message, “Please be advised that advice given in this call is only general in nature.”  What?  If I can’t get a precise answer on government policy from a government department, who the hell does know?  Can I just make it up myself?  Should I get Tasmanians to vote on it?  Confusion/10.

Victoria – No deposit limit

First, I called the Victorian Managed Insurance Authority (VMIA) to find out if solar counts as building work covered under Domestic Building Insurance.  They said it wasn’t.  The next step was to contact Consumer Affairs Victoria to find out if there was a deposit limit, and they said there isn’t.  The deposit amount is negotiated between the solar installer and the customer.

Hold Music Rating:  The VMIA put me on hold for six minutes, and this white boy found their music funky.  But it only played for 10 seconds before being interrupted by a message, so I didn’t have time to bust out my best dance moves.  For this reason, I can only rate it 2/10.  Consumer Affairs Victoria put me on hold for 8 minutes.  Their music was chill and played for 30-second stretches, but didn’t possess adequate levels of funk.  4/10.

Western Australia – Maybe 6.5% for $7,500 & up, maybe 20%

In WA, if a solar system’s total contract price is under $7,500, there’s no maximum deposit limit; the amount is negotiated.

If the amount is between $7,500 and $500,000, then the maximum deposit limit is 6.5%—probably. Two people at the WA Department of Energy, Mines, Industry Regulation and Safety told me this. But while they thought this was the maximum deposit limit for solar installations, neither was 100% sure.

The figure they gave is what normally applies for building work, but I was told that cabinet makers are an exception and they can ask for a maximum deposit of 20% because most of their work is done offsite.  When I pointed out that solar installation was similar because the hardware is made offsite, I was told it was possible they could have the same limit as cabinet makers.  But giving a definite answer was apparently as far beyond their power as plucking the sun from the sky.

Most solar systems installed in WA without batteries have a total contract price of under $7,500 and so don’t have a maximum deposit limit.  On this page, the WA Commissioner for Consumer Protection recommends paying no more than about a 10% deposit for home renovation or maintenance work under this amount.

Image credit: PSW Energy

Hold Music Rating:  While they weren’t good at giving definite answers, they were good at answering the phone, so I was never on hold for long.  But the first time I called the hold music was so bland it was like something the mirror-universe Rick Astley would write to accompany his song, Always Going To Give You Up.  Negative several billion/10.

ACT – No deposit limit

I called the ACT Planning Department and was told there’s no maximum deposit limit.  So it’s negotiable, but hopefully, you’ll just be asked for 10% of the purchase price.

Hold Music Rating:  I wasn’t put on hold!  I called first thing in the morning, so it wasn’t quite a miracle, but I’ll still rate it as God is on my side/10.

NT – No deposit limit

The Northern Territory’s Consumer Affairs told me there’s no maximum deposit limit.

Hold Music Rating:  I was put on hold for just 3 seconds!  It was over so fast, I have no idea what they played.  I know it was contrapuntal music, but what isn’t these days?  That’s all kids these days have listened to since the Renaissance.  I rate this damn! I’m on a roll!/10.

Maximum Deposit Summary

Putting all the maximum deposit limits for full contract prices into a list gives:

• QLD:  20%
• NSW:  10%
• SA:  No limit under $12,000. Maximum $1,000 deposit from $12,000-$20,000.  Deposit limit of 5% if over $20,000.
• TAS:  No deposit limit
• VIC:  No deposit limit
• WA:  No deposit limit under $7,500.  Probably 6.5% for amounts from $7,500 to $500,000 – but maybe 20%.
• ACT:  No deposit limit
• NT:  No deposit limit

Compulsory Insurance Summary

The state where compulsory insurance can definitely apply and the state where it may apply are:

• NSW:  Home Building Compensation cover is required if the total cost is $20,000 or more
• WA:  Home Indemnity Insurance MAY be required if the total cost is over $20,000

Hold Music Summary

If all government departments were required to play a continuous loop of Waltzing Matilda or Wollongong the Brave as their hold music, it would be an overall improvement.