Australia’s rooftop solar expansion has delivered cheap, clean electricity to millions of homeowners, but researchers argue that apartment residents have been largely excluded from those benefits. Apartments accounted for 16% of Australian dwellings in the 2021 Census, yet the combination of split incentives between landlords and tenants, embedded energy networks, and strata governance barriers has kept most of those households from accessing solar savings. With federal and state regulators now moving to close loopholes and cap prices, the question is whether policy can catch up to a problem that subsidies alone have failed to fix.
A Suburban Boom That Skipped Multi-Unit Housing
The scale of Australia’s rooftop solar success is hard to overstate. The postcode registry maintained by the Clean Energy Regulator tracks every small-scale solar PV system installed under the Small-scale Renewable Energy Scheme, and its data reveals heavy concentration in suburban, owner-occupied areas. The federal government has celebrated national milestones, with official updates confirming that Australia reached a major rooftop solar benchmark driven overwhelmingly by detached houses.
The national accounts treatment developed by the Australian Bureau of Statistics now frames household solar generation as a distinct economic activity, tracking metrics including the number of households with solar, cost declines per kilowatt, solar generation share, and estimated aggregate savings. Those figures tell a story of falling costs and rising adoption, but they also expose a gap: the benefits flow almost entirely to property owners who control their own rooftops. Rooftop solar supplied a substantial share of generation in recent years, yet apartment dwellers, who make up a significant slice of the population, have seen little of that output directed their way.
Population and housing data from the ABS data explorer show that apartments are especially common in inner-city areas, where electricity prices and summer cooling loads can be higher than in outer suburbs. That geographic mismatch between where solar is installed and where dense populations live means that, in practice, the suburban boom has bypassed many of the households that could benefit most from lower energy bills.
Why Renters and Apartment Dwellers Miss Out
The central barrier is structural, not technological. A peer-reviewed study published in Energy Policy used interviews with property investors to show that split incentives and investor decision-making keep rental housing far behind owner-occupied dwellings in solar uptake. The logic is straightforward: landlords bear the upfront installation cost while tenants capture the bill savings, so neither party has a clean financial reason to act. Investors cited high costs and regulatory complexity as additional deterrents, particularly where strata rules or heritage constraints applied.
Earlier work on landlord–tenant dynamics in energy efficiency, also published in academic literature, helped define the “split incentive” problem that now shapes solar access debates. That research showed how misaligned incentives discourage both basic upgrades, such as insulation, and more capital-intensive technologies, such as rooftop solar, in rental properties. Despite this, most subsidy schemes have been designed for owner-occupiers, reinforcing the structural divide between those who can invest directly and those who cannot.
For apartment buildings specifically, the obstacles multiply. Shared roof space must be allocated through strata votes, which can be contentious if not all owners live in the building or share the same priorities. Wiring and metering require agreement from body corporates and often involve complex engineering work to connect multiple units fairly. In many complexes, residents do not even have a direct relationship with a retail energy provider because they sit inside an embedded network, a private electricity arrangement managed by a third party rather than the open retail market. These layers of complexity mean that even motivated tenants and owner-occupiers can find it difficult to progress a solar proposal beyond the discussion stage.
Embedded Networks Lock In Higher Costs
Embedded networks are common in newer apartment developments, retirement villages, and shopping centres. Residents connected to these networks often cannot shop around for competitive electricity deals, and pricing can be opaque. Reporting has documented how apartment dwellers described being locked into arrangements where prices ran well above standard retail offers, with limited ability to switch providers or install their own solar panels and batteries. In some cases, residents only discovered they were in an embedded network after moving in, when they tried to change retailer and found they had no choice.
The NSW Government acknowledged these problems directly when it announced a reform plan for embedded network customers. That plan, outlined on the state’s energy policy site, identifies shopping-around barriers and unclear pricing as core harms. It proposes a price cap broadly equivalent to competitive retail offers, along with new consumer protections designed to give apartment residents a fairer deal. The reforms represent one of the most concrete state-level responses to the embedded network problem to date, signalling that regulators see these arrangements not just as technical curiosities but as a source of systemic disadvantage.
Embedded networks also complicate the rollout of rooftop solar. Where a single operator controls the internal wiring and metering of a building, that operator effectively decides whether solar is installed, how costs are allocated, and how benefits are shared. Without clear rules requiring transparent decision-making and fair distribution of savings, residents may see little improvement even when panels appear on the roof. In some developments, solar generation has been used primarily to offset common-area electricity use, such as lifts and hallway lighting, with limited flow-through to individual bills.
Regulators Begin Closing the Gaps
At the federal level, the Australian Energy Regulator has moved to tighten oversight of embedded networks. Its Embedded Network Review Final Decision includes a significant structural change: deemed exemption classes will close to new embedded networks from 1 January 2026. That means developers building new apartment complexes will no longer be able to automatically set up private electricity networks that bypass the retail market. Instead, they will face a more stringent authorisation framework designed to ensure that residents receive protections closer to those available to standard customers.
This decision signals a shift in regulatory thinking, from treating embedded networks as a convenient default to recognising them as a source of consumer harm when poorly governed. By limiting new exemptions, the regulator aims to prevent the creation of future pockets of disadvantage, even as it works through how best to improve outcomes for residents already inside such arrangements. Consumer advocates argue that this is a necessary first step, but stress that enforcement and clear communication to residents will determine whether the reforms deliver meaningful change.
The federal government has also acknowledged practical and legal barriers to solar in rentals and multi-occupancy buildings through its guidance for households considering clean energy. Policy documents highlight issues such as obtaining landlord consent, navigating strata approvals, and ensuring that billing arrangements reflect the contribution of on-site generation. While these acknowledgements do not in themselves resolve the split-incentive problem, they lay the groundwork for more targeted programs, such as tailored rebates for landlords who install solar on rental properties or support for community-owned systems that serve multiple apartments.
From Policy Gaps to Practical Solutions
Closing the rooftop solar gap for apartment residents will require more than tightening rules around embedded networks. Researchers and advocates point to several practical options: shared solar systems with behind-the-meter allocation, virtual power plant arrangements that aggregate small-scale generation across multiple buildings, and tariff structures that reward landlords for enabling tenant access. Some local councils have experimented with facilitation roles, helping strata committees assess solar proposals and understand payback periods under different ownership models.
However, without clear national standards and sustained funding, these solutions risk remaining niche. The experience of the past decade suggests that broad-based subsidies alone will not overcome entrenched structural barriers. Instead, targeted policies that directly address split incentives, strengthen consumer rights in embedded networks, and support collective decision-making in strata schemes are more likely to deliver durable change.
Australia’s rooftop solar success story has shown what is possible when technology, policy, and household economics align. Extending that success to the millions of people living in apartments will test whether regulators and governments can adapt those tools to more complex forms of housing. If they succeed, the next phase of the energy transition could be defined not just by more panels on roofs, but by a fairer distribution of the savings they provide.
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*This article was researched with the help of AI, with human editors creating the final content.
