{"id":33349,"date":"2019-09-12T16:32:34","date_gmt":"2019-09-12T06:02:34","guid":{"rendered":"https:\/\/www.solarquotes.com.au\/blog\/?p=33349"},"modified":"2024-12-31T13:54:37","modified_gmt":"2024-12-31T04:24:37","slug":"deposit-protection-solar","status":"publish","type":"post","link":"https:\/\/www.solarquotes.com.au\/blog\/deposit-protection-solar\/","title":{"rendered":"How Big A Deposit Should You Pay Your Solar Installer?"},"content":{"rendered":"
\"Solar

What are the rules about deposits when buying solar power systems?<\/p><\/div>\n

This post is going to be light on words, but the topic is worth covering. It arose from a couple of questions SolarQuotes founder Finn Peacock asked me to research: what\u2019s a \u201cnormal\u201d start-work deposit to offer a solar PV installer, and is there deposit protection for consumers?<\/p>\n

The request came after Finn was contacted by someone who had lost over $5,000. They paid a 50% deposit to a solar installation company that went into administration before the installation took place.<\/p>\n

So, let\u2019s start with a state-by-state handy table for maximum deposits payable according to state legislation.<\/p>\n

“Small Jobs”<\/h2>\n\n\n\n\n\n\n\n\n\n
State<\/strong><\/td>\nSmall job classed as:<\/strong><\/td>\nMax Deposit<\/strong><\/td>\n<\/tr>\n
QLD<\/strong><\/td>\n$3,300 to $19,999<\/td>\n10%<\/td>\n<\/tr>\n
NSW<\/strong><\/td>\nAll work<\/td>\n10%<\/td>\n<\/tr>\n
VIC<\/strong><\/td>\nup to $19,999<\/td>\n10%<\/td>\n<\/tr>\n
SA<\/strong><\/td>\n$12,000 to $20,000<\/td>\n10%<\/td>\n<\/tr>\n
WA<\/strong><\/td>\n$7,500 to $500,000<\/td>\n6.5%<\/td>\n<\/tr>\n
TAS<\/strong><\/td>\nN\/A<\/td>\nN\/A<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

“Large Jobs”<\/h2>\n\n\n\n\n\n\n\n\n\n
State<\/strong><\/td>\nLarge job classed as:<\/strong><\/td>\nMax Deposit<\/strong><\/td>\n<\/tr>\n
QLD<\/strong><\/td>\nover $20,000<\/td>\n5%<\/td>\n<\/tr>\n
NSW<\/strong><\/td>\nN\/A<\/td>\nN\/A<\/td>\n<\/tr>\n
VIC<\/strong><\/td>\nover $20,000<\/td>\n5%<\/td>\n<\/tr>\n
SA<\/strong><\/td>\nover $20,000<\/td>\n5%<\/td>\n<\/tr>\n
WA<\/strong><\/td>\nN\/A<\/td>\nN\/A<\/td>\n<\/tr>\n
TAS<\/strong><\/td>\nN\/A<\/td>\nN\/A<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Certainly, then, a tradie asking for a 50% deposit is going over the top.<\/p>\n

Builders Warranty Insurance<\/h2>\n

Builders warranty insurance goes by many names around the country, but where it applies it provides protection for buyers in case, as is explained in this post<\/a> by insurer QBE, \u201closs of deposit, failure to start or finish a job and defective work on a completed job\u201d.<\/p>\n

However, it doesn\u2019t apply to small jobs. Here are the minimum job costs in various states for a project to qualify for builders warranty insurance.<\/p>\n

Minimum Job Value For Builders Warranty Insurance<\/h2>\n\n\n\n\n\n\n\n\n\n\n\n
State<\/strong><\/td>\nminimum value<\/strong><\/td>\n<\/tr>\n
QLD<\/strong><\/td>\n$3,300*<\/td>\n<\/tr>\n
NSW<\/strong><\/td>\n$20,000<\/td>\n<\/tr>\n
VIC<\/strong><\/td>\n$20,000<\/td>\n<\/tr>\n
SA<\/strong><\/td>\n$12,000<\/td>\n<\/tr>\n
WA<\/strong><\/td>\n$20,000<\/td>\n<\/tr>\n
TAS<\/strong><\/td>\nNo scheme<\/td>\n<\/tr>\n
NT<\/strong><\/td>\nNo scheme<\/td>\n<\/tr>\n
ACT<\/strong><\/td>\n$12,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Even if solar installations are eligible for warranty protection, it\u2019s likely a great many installations are too small to qualify, unless you\u2019re in Queensland where projects over $3,300 need warranty insurance.<\/p>\n

In its Q1 2019 snapshot, the Australian Energy Council said the average new system size today is 8.1kW (the report PDF is here<\/a>). Typical residential solar systems<\/a> start at 6.6kW. As Finn wrote here<\/a>, 8.1kW puts the system cost somewhere between $7,500 and $11,000, so only in Queensland would an \u201caverage\u201d system qualify for warranty insurance.<\/p>\n

It\u2019s also important to understand builders warranty insurance coverage for solar power is not consistent from state to state.<\/p>\n

We contacted the responsible bodies in each state that has a compulsory scheme, and at the time of writing, had received the replies below:<\/p>\n