Best Practices for Local Governments to Avoid Conflicts of Interest in Strata Sustainability

​Local councils play a key role in reducing carbon emissions in their communities, but the strata sector presents unique challenges. While households and businesses are relatively straightforward to engage, strata schemes involve multiple stakeholders and are susceptible to conflicts of interest, commissions, and poor installation outcomes.

​1. Current Approaches
 
•               Waverley Council Example: Publishes a  list of consultants for strata sustainability (solar, energy efficiency, EV charging, NABERS ratings). This allows strata committees to perform self-directed research without the council favouring any provider.
•               Newcastle Council Example: A leading council in electrification efforts, hosting events like Saul Griffith’s for a town hall. However, they funnel local residents to a preferred solar installer after they ran a tender process to select a reputable one. This approach raises concerns as it favours one commercial entity and exposes councils to conflict-of-interest risks.
 
2. Risks in Current Council Sustainability Program Models
 
1.             Funnelling Work to Single Installers: Directly recommending or channelling residents to one installer undermines competition and may breach fair trading principles.
2.             Commission-Based Models: Previous arrangements with not-for-profits like the Australian Energy Foundation mirrored for-profit models (e.g., Solarquotes.com.au which is now owned by Origin Energy) where vetted installers paid commissions. This narrows market choice and may create hidden conflicts.
3.             Vetting Liability: Councils using third-party vetting must consider the exposure of their appointed partners to poor outcomes, as seen in costly failed strata solar installs exceeding $200,000 in repair costs, after the failed strata solar system was decommissioned and removed
4.             Consumer Protection: Section 47B of the NSW Fair Trading Act 1987 requires disclosure of commissions and referral fees—compliance in the solar market appears low.
 
3. Legal and Policy Considerations
 
•               Buy Local Policies: Councils can encourage supporting local businesses but must avoid tipping the playing field unfairly.
•               Business Activity Restrictions: Councils must steer clear of acting as commercial intermediaries, whether engaging for-profit or not-for-profit or social enterprises as certified by B Corp, People and Planet First, Social Traders (e.g. Solar Analytics is a B Corp which was favoured by some councils who used the product internally)
•               Disclaimer Practice: Councils should clearly state they are not involved in vetting and are not liable for outcomes. However, this is still not the ‘best practice’ method of operation. For best practices, we need to look to other sectors.
 
4. Lessons from Other Sectors
 
The financial planning industry shifted from commission-based advice to fee-for-service following the Banking Royal Commission. Councils can adopt a similar principle through empowering “self-directed research by strata committee members” rather than funnelling residents to vetted or preferred suppliers.
 
5. Recommended Best Practices
 
1.             Self-Directed Research Tools: Provide resources like directories, guides, and case studies that allow strata committees to compare installers and solutions independently. This is an extract of a list of strata solar install references by one particular solar installer:

Self directed research tools allow the strata schemes to ‘click through’ on a reference from a particular solar installer and see the actual install on the strata rooftop using a government aerial imaging system. In this case the solar installer, Atlas Renewables, installed a solar system on 3 Raymond Rd Neutral Bay which is a 3 lot building.

 
2.             Transparent Listing Policies: Maintain publicly available lists of providers, updated regularly, with neutral inclusion criteria.
3.             Avoid Commission or Referral Payments: Any program that creates a financial bias towards certain providers should be avoided.
4.             Awareness of Market Maturity: As markets evolve , councils should mention all competitors to avoid perceived favouritism. (e.g., Allume Energy Solshare vs. Zeco Energy MDU for solar sharing or if mentioning NOX Energy's 1.5m ARENA low power EV charging grant also mention Alchemy Charge, Ready Steady Plug, Combined Energy, Ohmie Go and Powerlog)
5.             Pilot Demonstrations Without Endorsement: Councils can install demo devices for educational purposes but should avoid implying preference.
 
6. Emerging Tools and Industry Examples
 
•               Electrify Strata Installer Directory: A free to use and commission/kickback free national directory with 300+ companies, supporting unbiased selection can be found here.

•               Integrated Self-Directed Lists: with strata references and links to completed projects:
                  Top Solar Installers List for Strata
                  Top EV Charging Installers for Strata
                  Top Heat Pump Installers for Strata
 
7. Key Takeaway
 
Scaling sustainability in the strata sector requires councils to:
• Focus on education and self-directed research.
• Avoid conflicts of interest, direct endorsements, or commission-based arrangements.
• Avoid ‘buy local’ schemes if the result of the buy local scheme actually results in introduction of less experienced installers and more expensive installers for the strata segment
• Continuously adapt to market developments, maintaining fair and transparent support for all suitable providers.
 
This approach protects councils from liability, supports consumer choice, and accelerates emissions reduction in the complex strata landscape which is still recovering from a lot of conflicts of interest which were exposed in 2024.
 
Brent Clark
Wattblock
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