Electricity Industry (Solar Power Purchase Agreements) Exemption Order 2016

Solar power purchase agreement is defined in clause 3 as an agreement between a supplier and a customer under which the customer purchases electricity generated by a solar power system specified in the agreement. This definition matters because it limits the exemption to true power purchase agreements, not leases, loans, or outright purchases of solar panels. If the agreement is structured as a lease of equipment with no purchase of electricity, the exemption does not apply. The supplier would need the retail licence or another exemption. The “solar power system” is defined as “a system of photovoltaic arrays” - standard solar panels that convert sunlight directly into electricity. This excludes other renewable technologies such as wind turbines or solar thermal.

Supplier is defined functionally in clause 3 as “a person who is a supplier under clause 4(1).” So the concept is not generic; it is tied to the list. The term is used throughout the Order to identify who owes the disclosure and reporting duties. The list currently includes 19 named companies (some entries were deleted). The Order does not provide a mechanism for a person to become a supplier other than by a legislative amendment. This means the concept of “supplier” under this Order is static unless the Minister amends the schedule.

Coordinator means the Coordinator of Energy as defined in the Energy Coordination Act 1994 section 3(1). The Coordinator is the recipient of the annual reports under clause 6. This is a state government officer, not a private entity. The reporting requirement therefore gives the government data on the solar PPA market, including complaint data.

complaint is defined in clause 3 as “an expression of dissatisfaction made in writing and given to a supplier where a response or resolution from the supplier is explicitly or implicitly expected or legally required.” This definition is broad: it covers any written dissatisfaction. The supplier must report the number and type of complaints received during the financial year. The definition does not require the complaint to be valid or to relate to a breach of the agreement; any written expression of dissatisfaction about the solar PPA counts. This imposes a compliance cost: the supplier must track and categorise complaints.

Financial year is not defined in clause 3 but is used in clause 6(1) to mean the most recently ended financial year (presumably ending 30 June each year, consistent with standard usage in Australian legislation). The annual report must be given before 31 August in the following financial year, so there is a two-month window after year-end.

The Order also introduces the concept of “assigned” agreements in clause 5(2). If a solar PPA is assigned from one supplier to another, the disclosure condition is taken to be observed by the assignee if the original supplier observed it. This protects the assignee from being deemed in breach of the condition for a pre-existing contract, but it places reliance on the original supplier’s compliance.

The primary regulated entities are the 19 named suppliers on the list in clause 4(1). They are the ones who receive the benefit of the exemption and must comply with the conditions. The list includes a mix of companies: origin energy (Origin Energy Retail No. 2), several smaller solar companies, and some that may be special-purpose vehicles. Being named means these suppliers can offer solar PPAs without the cost, delay, and ongoing obligations of holding a retail licence under the Electricity Industry Act. That is a significant competitive advantage over would-be competitors not on the list. The Order also affects former suppliers whose names have been deleted (paragraphs (a), (c) and (o)); they no longer have the exemption and must either obtain a licence or cease selling under solar PPAs.

Customers of those suppliers are directly affected. A customer entering a solar PPA with a named supplier will not have the protections that come with a licensed retailer. For example, under the standard retail licensing regime, customers may be entitled to a retailer of last resort, a standard customer contract with prescribed terms, and access to the Energy Ombudsman. This Order strips those protections. The disclosure statement must tell the customer that the supplier is not required to hold a licence (clause 5(1)(b)), but it does not have to list the specific protections the customer will forgo. The customer gets only the contractual rights in the PPA and the protections of the Australian Consumer Law. That shift in risk from the supplier to the customer is a notable economic trade-off: the customer bears more counterparty risk in exchange for potentially cheaper solar electricity.

The Coordinator of Energy is affected as the recipient of annual reports. The Order imposes a data-collection duty on the Coordinator (though the Order does not say what the Coordinator does with the reports). The reports give the government visibility into market activity, complaint numbers, and generation capacity. This information could inform future policy, but the Order does not require publication.

Competing licensed retailers are indirectly affected. They must hold a licence to sell electricity, even under a solar PPA. The Order therefore creates a regulatory asymmetry: the named suppliers can undercut licensed retailers on compliance costs, potentially offering lower prices or higher margins. This may encourage other retailers to seek inclusion on the list, but the process for that is opaque. The Order does not set criteria for addition or removal. Over time, the list has been amended to add some suppliers and delete others, but the basis is not stated. This creates uncertainty for market participants and raises the risk of rent-seeking.

Finally, contractors and financiers involved in solar PPA transactions may be affected if the supplier fails to comply with the conditions. If the exemption is lost, the supplier cannot enforce the agreement for sale of electricity (or the contract may be void for illegality). Parties providing maintenance or repairs (named in the disclosure) may be affected if the PPA terminates early.

The Order imposes two main duties on suppliers: the pre-contract disclosure duty and the annual reporting duty. There is also a duty to update the disclosure if information becomes incomplete, false or misleading. There are no duties on customers, but customers have rights to receive the disclosure and updated disclosure.

Pre-contract disclosure duty (clause 5(1)): Before the customer executes the solar PPA, the supplier must give the customer a written disclosure statement containing 17 items. These include a statement that the PPA is separate from any standard form contract with a licensed retailer; a statement that the supplier is not required to hold a retail licence; a statement that the PPA may be subject to the Australian Consumer Law (WA); the term of the agreement; the customer’s options at the end of the term; all fees and charges including the per-unit rate and how it can change; the type and accuracy of the meter; the supplier’s estimates of generation output and cost for the first 12 months; billing format and frequency; a summary of termination rights and obligations; a summary of customer obligations; contact details for maintenance and repairs; the dispute resolution procedure; and “any other information that is reasonably necessary to enable the customer to make an informed assessment.” This last item is a catch-all that could impose a significant duty if a court or tribunal later finds that a particular fact was necessary for an informed decision. The supplier must assess what a reasonable customer would need to know.

Crucially, the condition is that the supplier “had given the customer a written disclosure statement before the solar power purchase agreement was executed by the customer.” The statement must be given before execution, not just at or after. If the statement is given after the customer signs, the condition is not satisfied and the exemption is lost. The supplier bears the risk of proving the timing.

Update duty (clause 5(3)): If the supplier becomes aware, or ought reasonably to have become aware, that information in the disclosure statement is incomplete, false or misleading, the supplier must give the customer an updated disclosure statement “as soon as practicable.” This is a continuing obligation. “Ought reasonably to have become aware” imports a negligence standard: the supplier cannot simply ignore obvious changes. For example, if the estimated generation output turns out to be significantly wrong, the supplier must update.

Annual reporting duty (clause 6(1)): By 31 August following each financial year, the supplier must give the Coordinator a written report containing: (a) number of PPAs executed or assigned during the financial year; (b) number of PPAs to which supplier was party at year end; (c) number of solar power systems covered by PPAs executed/assigned during year; (d) number of systems covered by PPAs at year end; (e) generation capacity in kilowatts of systems under PPAs at year end; and (f) number and type of complaints received during the year. The report does not need to include financial data or customer names. The condition does not apply for a financial year if the supplier was not a supplier at any time during the previous financial year (clause 6(2)). So a new supplier’s first year of operation does not require a report.

Rights of the customer: The customer has the right to receive the disclosure statement before executing, and the right to receive updates. The customer also has the right to access the dispute resolution procedure described in the disclosure. However, the Order does not prescribe that procedure; it is left to the supplier to set. The customer does not have a statutory right to challenge non-compliance with the Order directly under the Order; enforcement would likely occur through the licensing offence provisions of the Act or through the Australian Consumer Law (for misleading conduct in the disclosure).

Rights of the supplier: The supplier has the right to sell electricity under a solar PPA without holding a retail licence. That right is conditional. If the conditions are satisfied, the supplier is exempt. The supplier also has the right, under clause 5(2), to treat the disclosure condition as satisfied if the PPA was assigned from another supplier who had observed the condition.

The Order itself does not create any penalties. It is an exemption order; the penalties exist in the parent Act. Section 7(4) of the Electricity Industry Act 2004 makes it an offence to sell electricity without a licence. The penalty for a breach is not stated in the Order, but the Act provides for significant fines. If a supplier fails to comply with a condition of the exemption, the exemption does not operate, and the supplier becomes a person selling without a licence, liable to prosecution. Therefore, non-compliance with the disclosure or reporting conditions effectively triggers the licensing penalty.

The Order is also supported by general enforcement mechanisms in the Act: the Economic Regulation Authority may investigate, and the State can seek injunctions or penalties. Because the Order is part of the regulations under the Act, a breach of a condition could also be a breach of a regulation, potentially attracting its own penalty under the Act’s general penalty provisions, but the Order does not specify one.

For customers, the main enforcement route is not under the Order but under the Australian Consumer Law (WA). If a supplier gives a disclosure statement that is false or misleading, the customer may have a claim for misleading or deceptive conduct (s 18 ACL) or false or misleading representations (s 29 ACL). The disclosure statement itself is part of the supplier’s conduct. The catch-all in clause 5(1)(p) (“any other information reasonably necessary”) could be used to argue that omission of a material fact is misleading.

The annual report condition is enforced by the Coordinator. If the supplier fails to give the report by 31 August, the exemption is conditional on compliance. The Coordinator may refer the matter to the Economic Regulation Authority or the State for prosecution. The report is not public under the Order, but the Coordinator can use it for oversight.

The removal of a supplier from the list (as happened with paragraphs (a), (c) and (o)) does not constitute a penalty under the Order; it is simply an amendment to the exemption. The Minister can delete suppliers without cause, presumably upon request or following non-compliance. This means the exemption is revocable without a hearing or formal process. That is a source of regulatory risk for suppliers: even if they comply with all conditions, they could be removed by a future amendment, losing their exemption.

The Order is made under the Electricity Industry Act 2004 and specifically interacts with section 7(4) of that Act. The exemption only lifts the licensing requirement. All other provisions of the Act remain applicable, including provisions relating to network access, distribution licences, safety, and metering. The supplier may still need a licence for any other electricity sales (e.g., to a customer under a different agreement type). The Order does not interact with the National Electricity Law because Western Australia is not part of the National Electricity Market (except the South West Interconnected System, which is regulated under state law). So the Order operates solely within the WA framework.

The Order explicitly references the Australian Consumer Law (WA) in clause 5(1)(c), requiring the disclosure statement to mention that the PPA may be subject to the ACL. This means the ACL will apply to the PPA as a supply of services (electricity) in trade or commerce. The ACL provides statutory consumer guarantees, including that services be rendered with due care and skill, and that they be fit for purpose. Customers can enforce those guarantees. The Order does not limit the ACL. Because the supplier is not a licensed retailer, the customer cannot access the Energy Ombudsman scheme (which deals with licensed retailers). The dispute resolution procedure referred to in the disclosure must be something else, likely private arbitration or a complaints-handling process.

The Order also references the Energy Coordination Act 1994, by using the definition of “Coordinator.” That Act deals with energy coordination in WA. The annual reports go to the Coordinator, but the Order does not impose any duty on the Coordinator to publish or act on them. The interaction is purely procedural.

The disclosure statement must state that the PPA is separate from any standard form contract or non-standard contract under section 47 of the Electricity Industry Act. That section defines standard form contracts (prescribed terms that licensed retailers must offer). By stating this, the Order clarifies that the PPA is not covered by those mandatory terms. Customers therefore have only the terms they negotiate or accept, without the statutory minimum protections of a standard customer contract. This interaction shifts bargaining power toward the supplier.

Finally, the Order interacts with the common law of contract. The PPA is a private contract. If the supplier loses the exemption because of non-compliance, the contract for sale of electricity may be illegal (since the supplier cannot lawfully sell). That could make the contract void or unenforceable. The customer could potentially recover payments on a restitutionary basis. The Order does not address this consequence; it is left to general law.

The Order was first published in the Gazette on 23 December 2016 and commenced the next day (24 December 2016). Since then, it has been amended four times:

• Electricity Industry (Solar Power Purchase Agreements) Exemption Amendment Order 2017 (published 13 June 2017, effective 14 June 2017). This amendment likely added or deleted suppliers, but the compilation table does not detail the changes. The text of clause 4(1) shows that paragraphs (a), (c) and (o) were deleted, but the 2017 amendment may have been the first to make deletions. The current text indicates these deletions were made over time.

• Electricity Industry (Solar Power Purchase Agreements) Exemption Amendment Order 2018 (published 29 March 2018, effective 30 March 2018).

• Electricity Industry (Solar Power Purchase Agreements) Exemption Amendment Order (No. 2) 2018 (published 17 August 2018, effective 18 August 2018).

• Electricity Industry (Solar Power Purchase Agreements) Exemption Amendment Order 2023 (SL 2023/31, published 21 April 2023, effective 22 April 2023). This amendment added “Solar Assets Pty Ltd” (paragraph (oa)), “Sustainable Business Energy Solutions Pty Ltd” (paragraph (ob)), and presumably updated the list. The compilation table shows that the 2023 amendment was the most recent.

The amendments have only changed the list of suppliers. The disclosure and reporting conditions have remained unchanged since the original order. The deletion of paragraphs (a), (c) and (o) means that three original suppliers lost their exemption. The reasons are not given in the legislation. It may have been due to non-compliance, business closure, request, or policy change. The lack of transparency is a concern for suppliers on the list; they have no guarantee of permanence. The amendment process is solely by Gazette notice; there is no hearing or appeal mechanism. This makes the exemption a privilege that can be withdrawn at any time.

Based on the source provided, there is no mention of any litigation. The Order is a relatively narrow exempting instrument, and reported cases are unlikely. However, there may have been unreported disputes about compliance. Potential litigation could arise in several forms:

• A supplier prosecuted for selling without a licence could argue the exemption applied. The court would examine whether the conditions were satisfied. For example, if the disclosure statement was given but one item was missing, the court would decide whether the condition is strictly interpreted. The wording “before the agreement was executed” suggests strict timing. A supplier who gave the disclosure after execution would lose.

• A customer could sue under the Australian Consumer Law for misleading conduct based on the disclosure statement. If the estimated generation output is significantly overstated, the customer could claim the supplier engaged in misleading or deceptive conduct. The catch-all in clause 5(1)(p) could be used to argue that the supplier omitted a material fact (e.g., the likelihood of shading or system degradation). The court would consider the estimates as part of the supplier’s conduct.

• A dispute about the “dispute resolution procedure” in the disclosure: if the supplier fails to follow that procedure, the customer could claim breach of contract. But the Order itself does not prescribe the procedure; it only requires a summary. If the summary is vague or misleading, the ACL might apply.

• An administrative law challenge to the removal of a supplier from the list. A supplier deleted by amendment might argue that the Order was not properly made or that the amendment is invalid. However, the Order is a legislative instrument, and the Minister has wide discretion. Judicial review would be difficult unless there is procedural failure.

In summary, no reported litigation is known, but the scope for disputes exists, particularly around disclosure accuracy and timing. The small number of suppliers and the specific nature of the exemption mean litigation is likely rare, but the risk remains for any supplier that cuts corners on disclosure.

Several traps in the Order can catch unwary suppliers and customers.

Trap 1: The exemption is personal to each named entity. A supplier cannot assign its exemption. If a company is bought or restructured, the new entity is not automatically a supplier. The list in clause 4(1) identifies specific ABNs. A change of ABN (e.g., from a trust to a company) requires an amendment. If the entity changes its name but not its ABN, it likely remains covered, but any change in legal person is risky.

Trap 2: The disclosure must be given before execution, not at the time of signing. A supplier that hands the disclosure statement to the customer only at the moment of signing, or after, fails the condition. The supplier must have given it before the customer executes the agreement. In practice, a supplier should have a system that proves the timing, such as delivery with a receipt date before the contract date.

Trap 3: The catch-all in clause 5(1)(p) is open-ended. It requires “any other information that is reasonably necessary to enable the customer to make an informed assessment.” This is a subjective standard that could be interpreted broadly by a tribunal. For example, if the solar system faces shading issues, or if the network provider may impose export limits, that could be “reasonably necessary.” A supplier that omits such information could be in breach, losing the exemption and facing ACL claims.

Trap 4: The update obligation in clause 5(3) can arise from information the supplier “ought reasonably to have become aware.” This imposes a duty to monitor. If a supplier learns that its estimates were based on incorrect data, it must update. If a supplier fails to monitor known risks (e.g., degradation rates), it may be deemed to have constructive knowledge. The “as soon as practicable” requirement leaves little room for delay.

Trap 5: The annual report is due before 31 August, but the condition only applies if the supplier was a supplier “at any time during the previous financial year.” A supplier that becomes a supplier on, say, 1 July 2024 will still not be a supplier during the previous financial year (2023-24) for the report due in August 2025. But the wording: “if the supplier was not a supplier at any time during the previous financial year.” If the supplier became a supplier on 1 July 2024, it was a supplier during the previous financial year (2023-24) only if “previous financial year” means the one just ended. The Order says “the most recently ended financial year (the financial year)” and then “in respect of a financial year if the supplier was not a supplier at any time during the previous financial year.” The “previous financial year” refers to the one before the reporting financial year. So a supplier that began on 1 July 2024 would be a supplier during the 2024-25 financial year, and the report for that year would be due 31 August 2025. The condition in clause 6(2) could exempt them only if they were not a supplier during the 2023-24 year. On a plain reading, the exemption applies to the first report after becoming a supplier. The trap is that a supplier that was already a supplier before the Order came into operation (if any) would have to report for the first partial period.

Trap 6: The Order does not define what happens to existing PPAs if a supplier is deleted from the list. If a supplier is removed, it no longer has the exemption for new agreements. But what about existing PPAs? The Order does not have a savings provision. The supplier would then be selling without a licence after the amendment’s commencement. The contracts might become illegal. A prudent supplier should seek a licence or arrange assignment to a licensed supplier if removed.

Trap 7: The dispute resolution procedure required in the disclosure is not prescribed. A supplier that includes an inadequate dispute resolution clause (e.g., no independent arbitrator) may still comply with the letter of the Order, but the customer may have little protection. The catch-all could require a meaningful procedure. Also, the absence of an external ombudsman means the customer’s only recourse is litigation or private ADR.

Trap 8: The Order is silent on commissions or incentives paid to third-party sales agents. If an agent sells the PPA and the disclosure does not mention the agent’s role or commission, that could be a missing “other information reasonably necessary.” The supplier is responsible for the conduct of its agents.

For a supplier named on the list, compliance involves three distinct tasks: pre-contract disclosure, monitoring and updating, and annual reporting.

Pre-contract compliance: Before the customer signs the solar PPA, the supplier must provide a written disclosure statement that covers all 17 items in clause 5(1). The safest approach is to use a standard template that is reviewed by legal counsel to ensure every item is addressed. The supplier should document the date and method of delivery (e.g., email with read receipt, physical hand delivery with signed acknowledgment). The statement must be given to the customer, not just made available. The customer’s execution must occur after that delivery. For agreements entered into by electronic means, the supplier should ensure the disclosure is displayed or sent before the customer clicks “accept.” If the agreement is assigned from another supplier, the assignee must obtain confirmation that the original supplier observed the disclosure condition. The assignee can rely on clause 5(2), but should request a copy of the disclosure statement and proof of timing.

Monitoring and updating: The supplier must monitor the accuracy of the information in the disclosure. The estimated generation output and cost for the first 12 months are particularly susceptible to change (e.g., due to weather, system performance, tariff changes). If the supplier becomes aware (or should reasonably have become aware) that any information is incomplete, false or misleading, the supplier must give an updated disclosure statement “as soon as practicable.” This suggests a proactive approach: the supplier should review its estimates periodically and notify customers of any material changes. A good practice is to include an obligation in the PPA for the customer to provide updated contact details, so the update can be sent. The supplier should keep records of all updates.

Annual reporting: By 31 August each year, the supplier must give the Coordinator a written report covering the previous financial year. The report must include the numbers of agreements executed, assigned, and outstanding at year end; numbers of solar power systems; generation capacity in kilowatts; and number and type of complaints. The supplier must define “type” of complaint; the Order does not prescribe categories, but a reasonable classification (e.g., billing, generation output, maintenance, termination) should be used. The report must be in writing and likely addressed to the Coordinator (Energy Policy WA, within the Department). The supplier should ensure the report is submitted on time. If the supplier was not a supplier at any time during the previous financial year, no report is needed for that financial year. But if the supplier was added partway through a financial year, it will need to report for that partial year unless it was not a supplier during the previous financial year (discussed in Gotchas). The supplier should keep a copy of the report as evidence of compliance.

General compliance strategy: The supplier should maintain a compliance manual that tracks (a) the timing of each disclosure, (b) the content of disclosures and updates, (c) complaints received, and (d) the annual report. Because loss of exemption exposes the supplier to prosecution for unlicensed sales, the consequences of non-compliance are severe. The supplier should also monitor the list of suppliers: if an amendment deletes it, the supplier must immediately cease selling under new PPAs or obtain a licence. Existing PPAs become problematic; the supplier should plan for that risk. Finally, the supplier should coordinate with its legal team to ensure that the PPA itself does not conflict with the disclosure (e.g., if the disclosure states a dispute resolution procedure different from the contract). The contract should reference the disclosure statement.