There’s a triple win for strata communities adding solar PV, an embedded electricity network and EV charging as part of a retrofit package – lower energy bills, lower carbon emissions and improved capital values.
But as one townhouse strata community in Glebe, Sydney is discovering, there are a few hurdles that first need to be addressed, including solar access rights, gaining majority owner approval and deciding on the right financing strategy.
Blackwattle Mews is a community of 18 townhouses across four blocks. Back in January 2017, four members of the owners corporation decided to look into options for adding solar power to their community. They received an environmental innovation grant from the City of Sydney to support the initiative and engaged Wattblock to undertake a feasibility study.
Executive committee member Neil Watson, a retired organisational consultant, told The Fifth Estate an emerging challenge regarding implementing low-carbon energy technology was whether it would be funded from the community’s sinking fund or a specific levy on owners.
The first step, however, was finding out if it was even worth proceeding.
Wattblock analysed a range of options, including solar PV installed by individual owners at that owner’s cost, community-owned solar with separate metering for solar PV and grid power, and solar with an embedded network to enable a single gate meter for grid power and solar together to distribute energy to individual dwellings. It found that an embedded network with shared solar was the way to go.
At the same time, it also surveyed the community’s intentions regarding future electric vehicle (EV) purchases and member preferences for charging arrangements, finding that adding EV charging to the individual garages of the properties would also be a smart move.
The feasibility analysis by Wattblock estimated a project cost of $46,680, including solar PV, switchboard upgrade, EV charging for each garage, embedded network and the legally required embedded network manager.
Currently, the combined energy use for the townhouses is estimated to be 70,655 kilowatt-hours a year, with a combined cost of $24,906.
With the addition of 18.2kW of solar, grid use is projected to drop to 23,690kWh a year. The system would ideally be configured to make supply of solar-generated power a priority energy source into the network over grid power.
There would also be a saving of up to 30 per cent on grid energy prices, as an embedded network enables the community to bulk purchase power that is then shared among the community via the embedded network.
Annual cost savings were therefore predicted to total $10,976 a year, giving the whole project a payback period of just over four years.
Getting the community onboard
As part of community engagement, Watson and the other Blackwattle team members – former State Library chief executive and electrical engineer Dr Alex Byrne and international lawyer Paul White– organised a community BBQ and information session.
Wattblock representatives and local MP Jamie Parker also attended the event, which Watson says was very successful.
“We were able to answer a lot of questions,” he says. “We felt very encouraged at that point.”
By this stage tenders had gone out for the various parts of the package recommended by Wattblock’s study.
“We are conscious no other strata that we know of has gone so far. The closest would be Stucco in Newtown,” Watson says.
“We were warned of the difficulties. But we were convinced [of the value] in terms of decreasing energy costs and decarbonisation.
“We think it is something of benefit to owner-occupiers, investors and tenants [of Blackwattle]. We need to be able to show the value to all those stakeholders.”
Currently, Watson says the team has an indicative support of between 60-70 per cent of the strata owners. By law, however, 75 per cent or more support is required for the owners corporation to endorse the initiative formally.
Solar boosts capital value
While the community’s two owner-investors may not see a benefit from reduced energy bills – that will go to their tenants – Watson says they will benefit from a value increase on their properties.
“There is a premium value attached to properties with renewable energy and that are EV ready,” he says.
In its feasibility study, Wattblock cited a number of examples proving the value uplift.
They include research conducted by Lendlease in 2013 showing installation of a $1500 solar system on an apartment increased sale value by over $10,000.
Applying the Lendlease metric to Blackwattle would see a value uplift averaging $17,000 per townhouse.
Research by Infinite Energy in Queensland found median valuation increases as high as $130,000 – 19 per cent – where there were three or more sustainable features.
Wattblock director Ross McIntyre says there are already some developments actively marketing themselves as having solar and being EV-ready in Sydney, including Sasco Development’s Genesis at Meadowbank.
Resolving the challenges of solar access
One of the important aspects of Blackwattle Mews as a case study is it illustrates how to resolve challenges around solar access, McIntyre says.
Generally, in strata, the roof of the buildings is owned by the strata community. So for an individual owner to install solar, they need permission from the strata body.
However, if the decision is made to install it as a community, then there is a choice between systems that feed direct to the dwellings below that section of roof, or a shared system where the power is shared.
Where systems feed directly to dwellings below, there is an equity issue, as some roof sections have better solar access than others. In the case of Blackwattle, only one of the four buildings has the orientation and quantity of solar exposure needed to generate substantial amounts of energy year-round. All of the other roofs have substantial patches of shading from the tree-cover that is a feature of the community’s common areas.
So putting the solar on the optimum roof space, and then sharing it equally, was the most equitable solution.
“You get a better outcome for everyone,” McIntyre says.
Being a larger project also means it attracts economies of scale in terms of the cost of the PV and other technology, and the community gains the benefit of aggregation.
“When one person is not at home to use the power, someone else will be.”
Aggregation also means a more even energy use profile, McIntyre says. This improves the economics of the solar, as less energy goes unused.
“One of the big learnings from this study was that the community approach is better.”
Problems with EV charging
Another issue to overcome is to do with electric vehicles. McIntyre says in places where EV uptake is high, such as northern Europe, clusters of EVs are creating strain on the grid.
If an apartment building has high EV uptake, when everyone gets home from work and plugs in to charge up, it is the energy equivalent of adding a second apartment building to the local load.
This has been causing issues including power outages and power degradation, he says.
Solutions can include behind-the-meter technologies that limit when people can charge their EVs.
In the case of Blackwattle Mews, adding EV charging will require upgrading the community’s central switchboard so it has capacity to provide the supply without causing outages. The supply boost from solar PV will also assist.
Strata can play a strong role in decarbonisation battle
McIntyre says Blackwattle is important as a case study is it highlights the role low and medium-rise strata can play in the decarbonisation of Sydney.
He says strata developments comprise 75 per cent of the residential buildings in City of Sydney. Across the 33 suburbs of Sydney the majority of strata buildings are low rise – between one and three storeys.
“Low-rise buildings are all generally really good cases for solar.”
Becoming an active energy market player
Another trend communities like Blackwattle can take advantage of is the predicted boom in the distributed renewable energy market.
McIntyre says the gentailers are currently trying to “get on top of distributed energy”.
“What that means for [a community like] Blackwattle Mews is that if they install enough solar and battery, they can become part of that distributed energy market.”
So a project that started with answering the question of how a community can install solar and reduce its carbon impact has now become about setting up a community to be “an active participant in the future energy market”.
It’s a no-brainer
Watson says he and the team see the whole proposal as a “no-brainer”.
Now they have the costings information from the tender process, he says the next step will be to apply for a demonstration grant from the City of Sydney to help implement the project.
Should they be successful in gaining the grant, they will also be committed to spreading the word about the process of obtaining low-carbon retrofits and the benefits to other strata communities.
At the community’s most recent meeting at the end of May, the project team outlined how things will proceed.
“The executive committee were relaxed and supportive. We were then able to freely discuss many of the complexities of the project and various options.
“At the AGM in July we will put a motion to the owners seeking in principle support so that the grant application has credibility and the exec will be backing that.”
The crucial “go or no go” decision does not need to be made until November, Watson says, when the results of the application for the demonstration grant will be known and the team will have all the data required to show the benefits and costs.