removing the barriers to solar - monash council...2017/10/31 · removing the barriers to solar...

Removing the barriers to solar

Solar Savers is a pioneering approach by Victorian councils and four Victorian greenhouse alliances to support pensioner households to install quality, affordable solar systems with no upfront costs.

Scaling up the City of Darebin’s successful program, Solar Savers will be progressively rolled out across 20 Victorian municipalities through to June 2019.

The pilot project, a partnership between the Central Victorian Greenhouse Alliance (CVGA); Eastern Alliance for Greenhouse Action (EAGA); Northern Alliance for Greenhouse Action (NAGA) and the South East Councils Climate Change Alliance (SECCCA), aims to remove the barriers faced by low income pensioner (aged and disability) households wanting to install solar.

One of the major barriers faced by these households is access to affordable loans. In one pilot, Solar Savers will test the use of council special rates charges to fund the installations at 0% interest. Households would pay off the cost of their solar system through their rates payments. The second pilot will offer households a special low interest loan provided by a private sector finance provider.

Through both pilots, the affordability of solar is improved for low income households by extending the loan term to a 10-year period. The result is that each Solar Saver participant will receive a solar system that pays for itself in electricity savings from the very first day.

New Energy Jobs Fund

In June 2016, EAGA and its partners secured a $760,000 grant through the Victorian Government’s New Energy Jobs Fund. The Fund is designed to support Victorian-based projects that create long-term sustainable jobs, increase the uptake of renewable energy generation, reduce greenhouse gas emissions and drive innovation in new energy technologies. Maroondah City Council led the funding application on behalf of Victorian councils and the four greenhouse alliances. The successful grant was the culmination of two detailed business case studies that sought to understand the best mechanisms to effectively scale up the City of Darebin’s solar project and identify groups that would benefit the most from the installation solar. The grant provides operational funding for Solar Savers for two and a half years. During this time, Solar Savers will deliver solar installations for low income households on behalf of councils using a shared services approach. The shared services approach creates efficiencies in the administration and delivery of the project - eliminating duplication, providing a consistent entry point for households into the program and provides the opportunity to evaluate the project at scale.

Supporting pensioners

Solar Savers extends the benefits of solar to support pension card households save money, take control of their bills and reducing emissions through the installation of up to 900 solar systems. The two Solar Savers business cases showed that pensioners are an important group to target. The studies found that pensioners:

• Use most of their energy during the daytime (when solar panels make electricity) • Have high home ownership rates • Spend a higher proportion of their income on energy costs • Benefit from reduced cooling costs • Are interested and support solar energy

Solar Savers will screen households to ensure that solar is a good investment for them and that they will be at least $100 in front at the end of each year after paying for the loan for their solar system. Often households installing solar are confronted by the complexity of choosing the right solar system and installer for their home. This complexity can be paralysing for all those but the most technically minded with homeowners needing information on the number of panels, types and size of inverters, warranty details and whether the installer has the appropriate experience and qualifications. Drawing on the expertise of Victorian Councils, the Municipal Association of Victoria, the Alternative Technology Association and four Victorian alliances for greenhouse action, Solar Savers will select an installer and components giving pensioners confidence that they will receive a quality, reliable and safe solar system for their home.

Participating councils

9385 98512

[email protected]

solarsavers.org.au

Solar PV for Low Income Households Participating Organisation Agreement Page 1 of 11 [6947711: 17590450_1]

PARTICIPATING ORGANISATION AGREEMENT (POA)

1. INTRODUCTION

This POA articulates the arrangements and expectations of Participating Organisations in the Solar PV for Low Income Households project (the project) by:

• providing a framework to guide collaborative work and meet the objectives of the project;

• defining the roles and obligations of Maroondah City Council and Participating Organisations and the project’s governance structure; and

• defining an agreed funding commitment (cash and/or in kind) of Participating Organisations.

A separate POA will be entered into by each Participating Organisation and Maroondah City Council. The terms and conditions of all POAs will be identical, however particulars specific to each Participating Organisation will vary and be defined in Schedule 2 to each individual POA.

Execution of this POA is a requirement and condition precedent of the funding agreement between Maroondah City Council and the Victorian Government. It is intended to be legally binding on those Participating Organisations which execute it.

2. BACKGROUND

In June 2016, Maroondah City Council secured a $0.76M State Government Grant through the New Energy Jobs Fund to deliver the Solar PV for Low Income Households project.

Maroondah City Council led the funding application on behalf of twenty four councils and four of Victoria’s Greenhouse Alliances.

The project seeks to install up to 1,000 solar PV on low income and vulnerable households across the twenty four municipalities in Victoria. The initiative will be delivered between August 2016 and June 2019 and will:

• test a model for scaling-up the use of council rates to provide individual loans to households and recover costs through the rates system;

• catalyse private-sector investment within a community segment traditionally viewed as high risk to investors by establishing and evaluating partnership finance models with the banking sector; and

• establish a shared services approach to project implementation to enable access to dedicated capability and thereby reduce resource requirements and risks to councils. This approach is intended to leverage economies of scale in administration, procurement and governance, and (importantly) enable participation by councils not otherwise able to offer this service to their residents.

3. DEFINITIONS

Funding agreement means the New Energy Jobs Fund Funding Agreement entered into between the State of Victoria and Maroondah City Council on 28 October 2016.

The project means the Solar PV for Low Income Solar program as described in Section 2.

Lead Organisation means Maroondah City Council.


Liability includes any liability, debt, obligation, loss, damage, cost and expense of whatever description and howsoever arising (and whether actual, contingent, prospective, ascertained or unascertained).

Loss includes any cost, expense, loss, Liability or damage (including damages at common law or in equity) and whether arising out of or for breach of contract or quasi-contract, for unjust enrichment, in tort (including negligence), on a quantum meruit, pursuant to any statute (to the full extent permitted by law), or otherwise at law or in equity.

Participating Organisation means a Victorian council, Greenhouse Alliance, Financial Institution or other entity contributing financial or other resources to assist in the delivery of the project.

Project Control Group means representatives of the Lead Organisation and Greenhouse Alliances.

Project Network means a council staff representatives from each Participating Organisation.

Shared Service means the project team or dedicated staff resources employed through grant funding to implement the project.

4. PRINCIPLES

In all matters arising under this POA, the parties will at all times agree to the following principles:

• openness, collaboration, sharing information and learning from each other;

• communicating regularly and pursuing a consensus approach to decision making;

• acting in good faith, foremost in the interests of the community; and

• transparency and fostering a culture of regular monitoring and review.

5. GOVERNANCE ARRANGEMENTS

All Participating Organisations commit to developing and maintaining a robust governance structure to ensure:

• objective and effective decision-making;

• appropriate processes for accountability; and

• effective communications and information exchange.

The project will be delivered under the guidance of:

• the Lead Organisation, which will administer the funding agreement with the State and manage its associated requirements;

• a Project Control Group, consisting of representatives of the Lead Organisation and Greenhouse Alliances to provide strategic direction to the project, oversee the shared service and manage staff hosting requirements;

• a project team, consisting of dedicated staff (program leader and sustainable energy officers) employed specifically to meet the resourcing requirements of Participating Organisations and establish the Shared Service; and

• the Project Network, consisting of at least one council staff representative from each Participating Organisation, to facilitate project implementation at the municipality scale.


Representation, roles, responsibilities and operational processes are detailed in the Terms of Reference provided in Schedule 1 to this POA.

6. PERIOD

This POA will become effective when signed by the parties and will, unless terminated earlier, continue through to 30 December 2019.

7. FUNDING COMMITMENT & PROJECT INPUTS

Each Participating Organisation will contribute the financial and/or in-kind amounts as described in Schedule 2 to their respective POA agreements.

For councils, these commitments and inputs include (but are not limited to):

• Sponsoring the installation solar PV systems on households and recouping these costs over 10 years through property rates and/or promoting and facilitating a bank loan trial targeting installation of solar PV systems on households; and

• Providing in-kind support to the initiative through project officer time (estimated at $2,000) in line with the role of the Project Network (as described in Schedule 1).

For Greenhouse Alliances, these commitments and inputs include (but are not limited to):

• Providing in-kind support to the initiative through Executive Officer time (estimated at 0.2FTE) in line with the role of the Project Control Group (as described in Schedule 1); and

• Providing staff hosting requirements and as described in Clause 8.

For financial institutions, these commitments and inputs include (but are not limited to):

• Providing an uncapped number of tailored loans directly to households recruited through the program, with an interest rate below 5% and a period of ten years

This POA recognises that councils often have difficulty making financial commitments beyond one financial year due to council budgetary processes. It also recognises that the Lead Organisation’s obligations under the funding agreement with the State extend over a number of financial years.

8. STAFF HOSTING & FINANCE ARRANGEMENTS

A Program Leader will be employed by Maroondah City Council on behalf of all participating organisations. The Program Leader will work under the direction of the Project Control Group and will report to the Team Leader Strategic Planning and Sustainability at Maroondah City Council on day to day issues and in regard to their employment conditions. Annual work plan reviews will be undertaken by the Team Leader Strategic Planning and Sustainability in consultation with the Project Control Group.

Maroondah City Council will be responsible for managing the project’s finances. Grant funding received from the State will be used for staff salary and on-costs (including, superannuation, WorkCover accrual, long service leave accrual, sick leave and leave loading, on-costs for the Program Leader) and other operational and implementation costs.

Maroondah City Council will distribute salary funds to the Northern Alliance for Greenhouse Action (NAGA), Central Victorian Greenhouse Alliance (CVGA) and South Eastern Council Climate Change Alliance (SECCCA) to support the establishment of the Shared Service through the employment of


three Sustainable Energy Officers (SEOs). The distributed funds will cover all salary, on-costs and operational requirements for employment of the SEOs under the equivalent of a local government Band 5 position. The hosting organisation will have the ability to modify the employment arrangements to ensure the needs of the project and Participating Organisation are met. All participating councils will have access to the Shared Service (project team) irrespective of Alliance membership.

Each host Alliance will report to the Lead Organisation in regard to the budget balance and expenditure of project funds in each financial year to comply with Maroondah City Council’s records audit and inspection requirements.

Should the requirement for staff resources change over the term of this POA, Participating Organisations agree to reach a mutually satisfactory hosting arrangement that best meets the needs of all parties and/or the initiative in question.

9. SHARING OF INFORMATION AND INTELLECTUAL PROPERTY

All Participating Organisations will aim, where reasonably possible, to share information relevant to the project with each other. In the normal course of events, they will work on the assumption that information should be freely exchanged.

Participating Organisations agree that it may be necessary to share confidential information to further the objectives of this POA and that such information is to remain confidential. Where privacy and confidentiality issues arise, they agree to collaboratively address these issues to ensure their timely resolution. Participating Organisations must not disclose or permit the disclosure of confidential information of the State, except with the prior written consent of the Department.

All intellectual property will vest in Maroondah City Council upon creation. Maroondah City Council grants to the State a permanent, irrevocable, royalty-free, world-wide, non-exclusive licence (including a right to sublicense) to reproduce, publish, communicate to the public, adapt, modify or otherwise use the project material for non-commercial purposes.

Any communications and publicity undertaken for the purposes of the project should recognise the contribution of the State, and Participating Organisations should do not anything which damages, brings into disrepute or ridicules the Victorian Government, including attract public or media attention detrimental to the Victorian Government.

10. DISPUTE RESOLUTION

If any dispute or difference arises between the parties in carrying out the principles of this POA that cannot be resolved within a reasonable time, then the parties will seek an agreed independent mediator to resolve the difference. Costs of such an independent mediator will be shared by the parties to the dispute.

11. ADDITION OF PARTICIPATING ORGANISATIONS

Any additional council wishing to join the project can express interest in writing to the Lead Organisation. The decision to accept new Participating Organisations will be made by a majority vote of the Project Control Group. All new councils which join the project will need to sign a POA with the Lead Organisation. Where the addition of new Participating Organisations results in additional staffing requirements, appropriate financial arrangements will be established with the host organisation to ensure all costs are covered.


The addition of financial institutions will be managed through a competitive tendering process that will seek to secure the most attractive financial attractive terms and broaden the reach and benefits of the project. Successful applicants to the tendering process will need to sign a POA with the Lead Organisation.

12. TERMINATION

Any Participating Organisation may cease being party to this POA at any time by giving at least three months’ advance notice in writing to the Lead Organisation. Any unspent contributions will not be refunded to the exiting Participating Organisation’s financial contributions.

Any obligations and commitments agreed to before the date of exit are to be fulfilled by the exiting Participating Organisation. Exiting Participating Organisations are also to provide any information required to fulfil any contractual obligations beyond the time of exit.

13. AGREEMENT REVIEW PROCESS

All Participating Organisations commit to conducting regular and ongoing reviews of the aims and their respective participation and if at any time any party decides that the aims are not viable, they may withdraw their participation in accordance with Clause 12 of this POA.

14. CONFLICT OF INTEREST

Participating Organisations agree that, to the best of their knowledge after making diligent inquiry, no conflict exists or is likely to arise in the performance of the obligations under this POA. If a conflict arises during the period of the POA, Participating Organisations must immediately notify Maroondah City Council and the Department of the conflict in writing, make full disclosure of all relevant information relating to the conflict and take such to resolve or otherwise deal with the conflict.

15. EQUAL OPPORTUNITY

Participating Organisations must comply with the provisions of all applicable Commonwealth and State privacy, anti-discrimination and equal opportunity legislation.

16. INDEMNITY AND INSURANCES

Each Participating Organisation agrees to indemnify (and keep indemnified) Maroondah City Council, its officers, employees and agents (referred to here as 'those indemnified') from and against all Loss sustained or incurred by those indemnified and arising out of or as a consequence in relation to any act or omission of that Participating Organisation, including:

• any claim against those indemnified in relation to any act or omission of that Participating Organisation, its officers, employees, agents or related bodies corporate in connection with this POA or the project;

• the use of any intellectual property owned or otherwise provided by that Participating Organisation, its officers, employees, agents or related bodies corporate in connection with the project, which infringes the intellectual property of any third party; and


• a negligent, reckless, wilful or unlawful act or omission of that Participating Organisation, its officers, employees, agents or other persons acting on its behalf or under its direction in the conduct of the project.

Each Participating Organisation’s liability to indemnify Maroondah City Council under this Clause 16 will be reduced proportionately to the extent that a wrongful or negligent act or omission of Maroondah City Council or its employees, agents or other contractors contributed to the Loss.

Each Participating Organisation must effect and maintain adequate insurance coverage having regard to its operational and business risks in relation to the project, including public liability insurance for an amount of at least $10 million per claim.

17. COMPLIANCE WITH LAWS RELEVANT TO PROJECT

Participating Organisations are required to comply with all laws and regulations in the carrying out of the project including:

• by obtaining all relevant authorities, consents and approvals required to participate in, and make their contributions to, the project;

• in relation to the employment of staff and the work environment of staff who are participating in the project;

• in relation to the methods and strategies used to canvass and attract potential participants; and

• to the extent participating organisations provide financial product advice or deal in a financial product.

Participating Organisations are required to comply with appropriate standards and guidelines developed by Maroondah City Council in relation to:

• the methods and strategies used to canvass and attract potential participants; and

• the provision of financial advice.


SCHEDULE 1: GOVERNANCE STRUCTURE - TERMS OF REFERENCE These Terms of Reference should be read in conjunction with the Solar PV for Low Incomes

Households Participating Organisation Agreement. These Terms of Reference have been

developed in line with the agreement to ensure:

• Sound and effective decision-making

• Appropriate processes for accountability

• Effective communications and information exchange

The project will be delivered under the guidance of:

I. LEAD ORGANISATION

A. Role of the Lead Organisation

• Administer the funding agreement with the Victorian State Government on behalf of all participating organisations

• Employ and host the Program Leader

• Oversee project finance and endorse key financial reports

• Report periodically on the activities and decisions of the Project Control Group

B. Key personnel and representation

• EAGA Executive Officer (employed by Maroondah City Council)

• Team Leader Strategic Planning and Sustainability, Maroondah City Council

II. PROJECT CONTROL GROUP (PCG)

A. Role of the Project Control Group

• Provide strategic direction to the project

• Regularly meet and liaise with the members of the Project Network to ensure effective information exchange and facilitate efficient decision making processes

• Oversee and reporting on hosting arrangements for members of the shared service (project team)

• Ensure all participating organisations have equitable access to resources and staff

• To review and manage the project budget in consultation with the lead organisation

• To receive project’s team’s reports and recommendations

• Oversee engagement with any contractors or consultants engaged throughout the project

• Assist with developing and reviewing implementation plans and strategies


• Collate and collect data and information from participating organisations for reporting via the lead organisation

• Provide input on communication and promotional material

• Share resources and knowledge


• EAGA Executive Officer (employed by Maroondah City Council)

• NAGA Executive Officer

• CVGA Executive Officer

• SECCCA Executive Officer

• Program Leader

C. Meetings

Monthly. Meeting agendas and papers will be prepared by the Program Leader. Minutes will be

taken by the Program Leader or shared as agreed. Meetings will be hosted at each PCG member on

a rolling basis and chaired by the Program Leader.

III. PROJECT TEAM (Shared Service)

A. Role of the Project Team

• Work under the guidance of and report to the PCG

• Develop systems and process:

o Develop administration systems and processes

o Develop templates and guidance materials on rates mechanism for councils

o Establishment of evaluation and monitoring plan

o Website and communications

• Recruitment of householders

o Develop recruitment database

o Promotion (letter mail out/targeted letterbox drop/HACC clients etc.)

o Handle inquiries (phone, email, CALD interpreters)

o Conduct community workshops

o Home visits to discuss contracts, check smart meters and switchboards etc.

• Special Charges Mechanism

o Prepare council report of final list of HH and accompanying information

o Handle inquiries from public comment period

o Prepare final SRCS report for council


o Sign individual contracts

• Solar PV Tender and Installations

o Prepare and finalise tender for systems

o Prepare council procurement reports

o Facilitate installations with installer

o Phone calls with electricity retailer approval and network company

o Follow up cert of inspections/smart meter programming

• Bank Pilot Finance Recruitment

o Develop finance options and processes

o Carry out tender and prepare council procurement reports

o Mailouts and handling inquiries

o Facilitate installations with installer

• Evaluation reporting

o Surveying and interview stakeholders

o Drafting a final evaluation reporting


• Program Leader

• NAGA Sustainable Energy Officer

• CVGA Sustainable Energy Officer

• SECCCA Sustainable Energy Officer

C. Meetings

As required.

IV. PROJECT NETWORK

A. Role of the Project Network

• project development and technical discussion

• working collaboratively with Project Team members to undertake targeted recruitment of households through existing channels, such as HACC services, and direct mail outs

• Fine tuning templates (briefing notes, letters etc) provided by the Project Team for communication within the participating organisation

• Facilitating report development for council decisions

• Make recommendations to Project Team



• at least one staff representative from each participating organisation, to facilitate project implementation at the municipality scale

• Program Leader

C. Meetings

Quarterly. Coordinated by the Program Leader. Either via webinar and centrally located workshop.


SCHEDULE 2: PARTICULARS

This Participating Organisation Agreement is between the parties:

Maroondah City Council ABN 98 606 522 719 as (lead organisation) and

Monash City Council and ABN 23 118 071 457 as (participating organisation)

The participating organisation commits the following contributions to the Solar PV for Low Income

Households program over the project period:

• promoting and facilitating a bank loan trial targeting installation of solar PV systems on 60 households

• providing in-kind support to the initiative through project officer time (estimated at $2,000) in line with the role of the project network

Through participation in the project, the participating organisation can expect to benefit from the shared service provided by the project team, as described in Schedule 1, Section III A.

EXECUTED AS A DEED

Signed on behalf of MAROONDAH CITY COUNCIL ABN 98 606 522 719 by its delegate Phil Turner, Director Planning and Community

Date

)

)

)

)

SIGNED SEALED AND DELIVERED by and on behalf of Monash City Council

ABN: 23 118 071 457 by

………………………………………………………

Witness Signature

………………………………………………………

Witness Name

………………………………………………………

293 Springvale Rd Glen Waverley

Date

)

)

)

)

)

Attachment 3: Solar Savers Program Risk Assessment

People

Risk Likelihood Consequence Risk Rating Mitigation

Injury to people by contact solar panels or installers equipment

Unlikely Moderate Medium Only licensed and CEC accredited installers to work on roof

Approved JSA / SWMS compliant WorkSafe practises

Continue to perform works at a time of least pedestrian traffic, reduce risk

Injury to installer – fall from roof

Unlikely Major High Only licensed and CEC accredited installers to work on roof

Approved JSA / SWMS compliant WorkSafe practises

Ensure Contractors’ staff are adequately trained and observe OHS requirements of company/industry

Disgruntled ineligible householder

Moderate Minor Medium Set out clear eligibility criteria in all communications

Explain pilot nature of project and looking to expand to other groups in the future

Householders confused about availability of rates and bank loan

Moderate Insignificant Low SEOs available to answer enquiries (in person, phone and email)

Promotion of rates loan targeted to small number of (HACC) residents

Householders concerned about inadequate sizing (or number of panels)


Program materials and website will include simplified information on how solar works and the avoided cost of purchasing electricity

Participation is offered on an opt-in basis

Stakeholders concerned about lack of energy efficiency or availability of batteries


Program materials and website will include simplified information on why solar installations are taking place

Project team will explore how project links to other energy programs


Stakeholders concerned with quality and safety of installations

Moderate Minor Medium RFT criteria addresses quality of systems and workmanship and OHS practices of tenderer

Routine spot checks completed


Households that install solar are concerned they are not realising the benefit of their solar system


Participating households will be provided with information packs explaining how solar works and how to get the most of their solar systems

Businesses concerned they are unable to participate

Unlikely Insignificant Low SEOs available to answer enquiries (in person, phone and email)

Project promoted to residential households in receipt of council rates rebate

Households concerned they are ineligible to participate in project


Program materials and website will include simplified information on program aims and the subsequent eligibility criteria

Ineligible households referred to similar schemes/provided with information on future roll out of project

Households concerned they cannot access loan through council rates

Unlikely Insignificant Low Sustainable Energy Officers (SEOs) available to answer enquiries (in person, phone and email)

Promotion of council rates pilot limited to small target group (e.g. HACC clients)

Program materials and website will include simplified information on program aims and the subsequent eligibility criteria

Low income households exposed to aggressive, deceptive or improper debt collection practices

Rare Major High Finance provider required to develop clear guidelines determining engagement with participating household

Finance provider required to maintain debt collection practices in-house for all project participants and abide by ASIC and the ACCC’s Debt collection guideline and relevant codes of practice

Inaccurate information on loan provided to householder

Unlikely Minor Low Finance provider and project team collaborate on materials promoting private low interest loan

Overly tight lending criteria prohibits uptake by households

Moderate Major Extreme Nil – will inform evaluation of the project

Lack of variability on finance offerings

Likely Minor High Nil – will inform evaluation of the project

Householders view project as recruiting on behalf of a financial institution rather than the Council

Unlikely Major High Project communications contain council logos (under consistent project brand) and clearly explain relationship with finance partner

Damage to pensioner’s home

Moderate Moderate High Tenderers required to provide evidence of appropriate training and experience of all installation personnel (as assessed by ATA)

Random inspection of installation practises/spot checks with householder

Household enquiries not captured/not responded to in an appropriate timeframe

Inefficient processes/poor systems result in delays for quotes, installations and details on bank loans

Moderate Moderate High Database tracks expressions of interest and processing times and highlights contacts for follow up

SEOs able to access database remotely

Ability to export householder data to installation and finance provider

Households do not receive the installations they agreed to

Unlikely Moderate Medium Database captures installation quotes, household agreements to raise installation request with provider

Mismatch in householder details – council database vs. details provided by householder

Moderate Moderate High Database look up and verification of addresses provided by householders

Project feedback is not recorded

Moderate Minor Medium Database tracks stakeholder feedback

Database design informed by the monitoring and evaluation plan

Misinformation/poor communication of project aims, objectives and processes

Moderate Moderate High Project messaging informed by communications plan to ensure consistent promotion of the project

Simple, accessible web layout that facilitates fast and easy access to simple content

Eligibility screening criteria posted on website

Householders confused about relationship between stakeholders / legitimacy of project

Moderate Major Extreme Website has professional but friendly look and feel

Project messaging informed by communications plan to ensure consistent promotion of the project

Website details each stakeholder, their relationship to the project and, in the case of private businesses, how

they were chosen for participation

Logos of participating councils displayed on project website

Contact details for project team provided to answer queries

Households adversely change consumption patterns following installation

Moderate Insignificant Low Clear instructions on ‘making the most of your panels’ provided to every householder

Lack of transparency around additional installation costs due to switchboard upgrade, roofing etc.

Moderate Minor Medium Clear installation process provided to eligible households

Households provided with a re-quote for all installations found to have additional costs

Inability to recruit households

Moderate Extreme Extreme Clear communications campaign

Build M&E to identify reasons for low recruitment

Householder makes complaint through council contact centre

Unlikely Moderate Medium Household interface managed through consistent program brand

Householders provided with project contact details at time of registering interest

Legal / Regulatory

Non-compliance with electrical work regulations resulting in accidents at home or contractors

Unlikely Major High Ensure Contractors’ staff have appropriate training and licenses to conduct electrical works

Random inspection by independent party to monitor safe practises

Solar Contractor is inadequately

Rare Major High Insurance and Licence is part of selection matrix and is required for tender bid to be considered

insured / licensed

Non-compliance with Australian Financial Services license - project representatives give inappropriate advice

Rare Moderate Medium Work with finance partner to ensure project does not contravene licensing arrangements

Non-compliance with National Consumer Credit Protection Act (2009) legislated hardship provisions

Rare Moderate Medium Financiers will be bound to provide relief (repayment reduction, repayment moratorium or other arrangement) until the borrower can resume normal arrangements

Householder engagement process to be included in POA with finance partners

Sustainable Energy Officers contravene licencing arrangements for provision of financial advice

Unlikely Moderate Medium Script provided by finance [provider

SEOs role is to inform the householder that opportunities to attract low interest finance exist and that further information on options can be gathered via banking representatives

Environmental

Waste – recyclable material is sent to waste

Unlikely Minor Low Require contractors to take packaging materials and products off site and recycle.

Contract Supervisor to monitor during life of contract

Financial / Business Continuity

Installers unable to complete contract due to financial collapse

Rare Extreme High Tender process includes evaluation of previous experience, last year turnover, accountant statement.

Affordability of solar panels diminishes during contract & installation period.

Unlikely Major High Ensure Contractor(s) has appraised risk of both appropriately during tender and provided enough ‘fat’ to cover minor variations.

Conservative screening methodology adopted in recruitment processes.

Proactively engage with other councils to broaden potential pool of participants

Hidden installation costs - Distributor requirement for ‘reprogramming’ of smart meters to accommodate Solar PV systems

Unlikely Moderate Medium Factor in a certain percentage of hidden costs based on previous bulk installation data

Proactive engagement with distributors

Participating organisations withdraw their financial and other commitments over the project life cycle

Unlikely Extreme Extreme Proactively engage with other councils to broaden potential pool of participants

Number of householders recruited and number of installations are closely monitored and reported to the State and other key stakeholders

Requirement for contract variation to be assessed at each milestone report

Households unable to make repayments

Moderate Moderate High Eligibility screening criteria ensures only households with a clear benefit participate in the project Finance provider required to offer payment relief to households experiencing financial difficulty

Requirement that loan payments are by equal instalments apportioned over a 10-year period

Interest rate varies during loan term make repayments unaffordable

Rare Major High Requirement that Interest rates are fixed for duration of loan Requirement that finance provider regularly reviews the interest rate to ensure household benefits are maximised

Additional/hidden fees and charges during loan term make loan unaffordable

Rare Major High No fees and charges/one off fee and charge payable on commencement

Finance partner incurs losses which impact on ability to participate beyond the initial pilot

Unlikely Minor Low Access to default fund

Nil – will inform evaluation of the project

Invite applications from sources of finance that will forsake private returns for social/environmental returns (e.g. charitable foundations, ‘angel investors’

Inappropriate claims on accessing default fund

Unlikely Minor Low Clear terms and conditions set relating to accessing default fund

Contractor unable to install solar systems during required timeframes

Moderate Moderate High Tenderers required to provide evidence of stock availability and capacity to install 45 installations/month

Project team conducts weekly meetings with installer

Marginal/no savings for households

Unlikely Minor Low SEOs screen households to ensure participating households are likely to meet $100/yr net benefit

Provider installs systems where no clear benefit exists

Moderate Moderate High Tenderers required to address how they will assess household quotes. Project team completes preliminary eligibility screening of households

Data not captured for program evaluation

Moderate Moderate High Database design informed by the monitoring and evaluation plan Establish register of Smart Meters and seek permission to access electricity export and import data to monitor/ and validate savings.

Loss of data Moderate Major Extreme RFQ requirement that database is backed up

Finance partner does not offer suitable terms to enable low income households to install solar PV

Rare Major High Requirement that finance provider provide 10-year loan terms and interest rate ≤5%

Use of Local Government Funding Vehicle scoped

Reputation

Poor quality systems and installation

High levels of maintenance

Warranties void

Rare Major High Only licensed and CEC accredited installers to provide services

Independent assessment of tender responses to ensure quality systems and robust maintenance structures

PV equipment fails

Unlikely Minor Low Obtain extended warranties through procurement process

Panels do not work/deliver electricity or savings as expected.

Moderate Moderate High Ensure Contractor(s) has appraised risk of both appropriately during tender and provided enough ‘fat’ to cover minor variations.

Spot check of installations.

Conservative screening methodology adopted in recruitment processes.

Clear communications about expected benefits

Limited uptake of bank loan trial

Moderate Moderate High Proactively engage with other councils to broaden potential pool of participants

Number of householders recruited and number of installations are closely monitored and reported to the State and other key stakeholders

Requirement for contract variation to be assessed at each milestone report

Explore possibilities of converting bank-loan Council trials to a rate-based trial

Householders confused about relationship between alliances, councils, installers and finance partners

Moderate Moderate High Program is promoted via consistent program brand SEOs available to answer enquiries (in person, phone and email)

Program materials and website will include simplified information on the stakeholders and their roles

Community concerns about councils funding the installation of solar systems

Moderate Moderate High SEOs available to answer enquiries (in person, phone and email) Program materials and website will include simplified information on how installations are financed

Participating councils concerned about the number of installations

Unlikely Minor Low SEOs available to answer enquiries (in person, phone and email)

Project team liaises regularly with installers and provides update of installations to councils

Stakeholders concerned about the installation provider

Unlikely Moderate Medium SEOs available to answer enquiries (in person, phone and email) Project materials outline the RFT selection process


Stakeholders concerned about the relationship with private finance provider

Moderate Moderate High SEOs available to answer enquiries (in person, phone and email) Relationship with private finance provider clearly explained on website and project material

Participation is offered on

Councils concerned they are unable to participate


Project Control Group invites councils to participate (where capacity exists to increase the number of participating councils)

Councils lack information about progress of project

Moderate Insignificant Low Project updates, including number of installations and case studies posted on website

Exposure of low income households to on-selling from private business

Rare Moderate Medium SEOs act as householder advocate and provide layer of ‘protection’ from commercial enterprises

The number of proposed and completed installations is unclear

Unlikely Moderate Medium Database tracks status of each registered household Database provides summary reports of number of installations, locations etc.

Database design informed by the monitoring and evaluation plan

Councils miscommunicate program

Moderate Moderate High Councils provided with council information pack

SEOs provide communications template

Project communicated through consistent program brand

Risk Assessment Matrix CONSEQUENCE

Insignificant

(No Injury/effect)

Minor (First aid/minor effect)

Moderate (Medical treatment/moderate effect)

Major (Serious injury/major effect)

Extreme (Death/massive effect)

Almost certain (Expected to occur most times)

Medium High Extreme Extreme Extreme

Likely (Will probably occur most times)

Medium High High Extreme Extreme

Moderate (Might occur some time)

Low Medium High Extreme Extreme

Unlikely (Could occur at some time)

Low Low Medium High Extreme

Rare (May occur in rare instances)

Low Low Medium High High

Local Government Funding Vehicle and Solar Savers

The Local Government Funding Vehicle (LGFV) is a MAV sponsored initiative to facilitate council access

to a cheaper source of debt from the wholesale market.

The LGFV aggregates council debt and issues bonds in a similar fashion to Federal and State

governments and large corporations. Collectively, Victorian local government has a higher credit

rating than the four major Australian banks; with an Aa2 rating from Moody’s compared to Aa3 for the

banks.

Through the LGFV, councils have an opportunity to access low interest finance to extend the reach of

Solar Savers and increase the benefits for participating households.

Background

Solar Savers is informed by two detailed business cases which demonstrated that interest rates and

repayment terms have the greatest impact on the economic viability of solar for low income

households1.

The Solar Savers program has been established to pilot two financing options aimed at overcoming

the barriers faced by low income households wanting to install solar:

1. Council rates loan

Councils directly fund solar installations from their existing budgets and recoup the costs

through the special charge mechanism at 0% interest over 10 years.

2. Personal bank loan

Bank Australia finance solar installations through a 4.75% interest rate, fixed for 10 years.

A third finance options was also identified in the business cases, and is now being developed and

tested through the Solar Savers program:

3. LGFV + Rates

Councils fund installations through LGFV debt finance and recoup costs through the special

charge mechanism over 10 years.

Linking low cost debt through the LGFV with rates repayments

By coupling low interest LGFV finance with the special rates mechanism to recover costs, councils can

deliver Solar Savers at the scale required while tackling some of the constraints posed by the two

financing options currently being tested by Solar Savers.

1 eaga.com.au/projects/solar-rates/

https://eaga.com.au/wp-content/uploads/MEFL-EAGA-Solar-Rates-Final-Report-2016-01-19.pdf

1. Council Rates Loan

Councils directly fund solar installations

and recoup the costs through the

special charge mechanism

2. Personal Bank Loan

Bank Australia finance solar installations

through unsecured personal loans. Council

carries recruitment overheads

3. LGFV + Rates

Council accesses low interest debt on capital

markets to finance solar installations and

recoups the costs the special rates

mechanism

Interest rate 0% 4.75% 3.97%*

Loan term 10 years 10 years 10 years

Solar system cost (2kW) $3,069 (ex. GST) $3,376 (inc. GST) $3,069 (ex. GST)

Quarterly repayments $77 $106 $93

Total repayments $3,069 $4,261 $3,733

Net position from bank loan

over life of loan2 -$1,190 N/A -$573

Loan attached to the

property X

GST saving for household X

Outside of council budget

restraints X

Limitations Dependent on council cash reserves

and ability to subsidise 0% interest

Participants must apply through

separate personal loan process Must aggregate debt across sufficient

councils/projects to access capital

markets

2 The benefits are even greater for 3KW system. The savings are in addition to the energy savings generated by the solar system over the life of the loan.

* Indicative rate based on June 2016 LGFV issuance – please note that the LGFV sources funds at wholesale costs, cheaper than the banks.

Benefits of linking low cost LGFV finance with the special charge mechanism

1. Fully recovering debt over 10 years

Funds accessed through the LGFV to finance low income solar are fully recovered over 10 years

through the special charge mechanism.

2. Removing barriers to solar, at scale

Solar Savers can be effectively scaled if councils harness their unique borrowing capacity to access low

cost finance. It is estimated that between 52,000 and 56,000 low income households are excluded

from solar and could benefit from a scaled up Solar Savers program3.

Amount borrowed Low income households supported

$100,000 32

$500,000 162

$1,000,000 325

$5,000,000 1629

$10,000,000 3258

3. Solar loans attached to the property

Under the special charge mechanism, the cost of the solar system is attached to the property rather

than the individual. This benefits councils by providing them with assurance that investments will be

recouped. This benefits households by providing them with the assurance that if they leave their

home, for any reason, and cease to receive the financial benefit of solar that their responsibility for

servicing the debt will also cease.

4. Leveraging trust in council

Some Solar Savers household have been cautious about the offer of a personal bank due to issues of

trust or a lack of familiarity with the personal loan process. However, these same issues have not

presented themselves with the offer of a rates loan as households are comfortable with the rates

payment mechanism through their council.

5. Passing on GST savings

Solar systems installed using the special charges mechanism are GST exempt resulting in a 10% GST

saving being passed on to the householder. This represent a $307 saving for a 2kW solar system.

6. Providing payment flexibility

Payments under the special charge mechanism can be deferred until the start of the next financial

year. This delay provides time for households to ensure their solar system is up and running before

making their first repayment and generate electricity savings to help meet the one-off solar

connection fees.

3 https://eaga.com.au/wp-content/uploads/Low-income-solar-directions-paper-FINAL-revised.pdf

https://eaga.com.au/wp-content/uploads/Low-income-solar-directions-paper-FINAL-revised.pdf

7. Providing householders with certainty

Solar Savers does not hold a financial services license and is, therefore, constrained in the support it

can provide to households applying for a personal loan. This creates the possibility for participants to

‘fall through the gaps’ following a referral to the bank. Solar Savers is much less constrained in

supporting councils to implement the special charge mechanism and can administer most the special

charge on behalf of councils and remain the key point of contact for households throughout the

process.

8. Access to Clean Energy Finance Corporation (CEFC) funding

By financing solar at scale through the LGFV, there is an opportunity for Solar Savers to meet the

minimum investment size required to secure additional funding through the CEFC.

Next steps

The Municipal Association of Victoria (MAV) is seeking expressions of interest from councils wishing

to borrow funds through the Local Government Funding Vehicle (LGFV) during the 2017/18

financial year.

Members of the Solar Savers project network are encouraged to speak directly with their finance

manager regarding their intentions on responding to the expression of interest before Friday 11

August.

If your council is seeking to access the LGFV for the Solar Savers program, please contact the Solar

Savers team so we can coordinate a conversation between other project partners on aggregation

opportunities for LGFV funded installations.

removing the barriers to solar - monash council...2017/10/31 · removing the barriers to solar...

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