Solar deposit limits and contract rules in WA

Western Australia has the tightest deposit cap in the country, and most people paying one have never been told it exists.

The statutory deposit rule

Section 10 of the Home Building Contracts Act 1991 says a builder must not enter into a contract entitling them to demand or receive a payment before work starts unless that payment is "a deposit of not more than 6.5% of the total amount payable to the builder under the contract for the home building work".

The Act applies to home building work valued between $7,500 and $500,000. Outside that range it does not bind, which is why a $4,000 EV charger installation and a $600,000 rebuild are both outside it, for opposite reasons.

Application to solar contracts

A reasonable person could assume a rooftop solar job sits outside a statute about building homes. It does not. Western Australian Consumer Protection's own solar panel systems guidance is explicit: if the contract is worth $7,500 or more, the Act requires the contract to be in writing, the deposit to be a maximum of 6.5%, and any progress payments to be only for work actually performed or materials already supplied.

That covers most battery jobs and a good share of solar-only ones. A 6.6 kW system after the point-of-sale rebate often lands below the threshold. A 13 kW system, or anything with storage, generally does not.

6.5% of what, exactly

The Act says the percentage is struck on "the total amount payable to the builder under the contract". On a straightforward contract that is simply the contract price.

Solar complicates it, because small-scale technology certificates are usually assigned to the installer and taken off the price at the point of sale. Whether the percentage is calculated on the price before that discount or after it is worth asking rather than assuming, and the answer changes the number.

Ask the installer to tell you which figure the deposit was calculated on, and to show the arithmetic on the quote. A business that has thought about its obligations will answer without hesitating. The question also settles whether the job crosses the $7,500 threshold in the first place.

Contracts and progress payments

The deposit cap is the well-known part, and it is not the only protection. On a contract at or above the threshold:

• the contract must be in writing;
• progress payments must represent genuine payment for work already performed or materials already supplied, not money taken in advance;
• upfront payment for variations is not permitted.

A business asking for a large payment before anything arrives on site is not driving a hard bargain. It is describing its own cash position.

Interstate deposit rules

Deposit rules are state law, so the same installation carries a different maximum depending on the border it falls inside. As at September 2024:

• Western Australia: 6.5% on contracts from $7,500 to $500,000.
• South Australia: no limit below $12,000, $1,000 between $12,000 and $20,000, 5% above $20,000.
• New South Wales: 10%, with Home Building Compensation cover required at $20,000 or more.
• Queensland: 20% of the full contract price.
• Victoria, Tasmania, the ACT and the Northern Territory: no statutory maximum.

Those are summaries of eight separate statutes and they change. If you are buying outside Western Australia, confirm the current position with that state's consumer regulator before you pay.

Deposits above the cap

A deposit above the cap does not void your contract, and it does not mean the work will not happen. It does mean the business has taken money it was not entitled to demand, which is worth raising directly and in writing. Consumer Protection takes complaints about home building contracts and can advise on recovery.

The more useful signal is what the answer tells you. A business that miscalculated and corrects it is a business paying attention. A business that argues the point is telling you how it will handle the next disagreement, at a stage when you still have your money.

PSW’s deposit calculation

PSW Energy charges within the 6.5% cap on the contracts the Act covers, and strikes the percentage on the total contract amount before the small-scale technology certificate discount comes off. On a $10,000 system carrying $3,000 of certificates, that is 6.5% of $10,000, so $650, rather than 6.5% of the $7,000 you pay after the discount.

We state which figure it is calculated on because that is the question this page told you to ask, and a business asking you to check its quote should answer it first.

A deposit is the first test of how a business treats your money. In this state, the law already told you what the answer should look like.

The four things to check before you pay any deposit, and what an itemised written quote from us looks like.