Saturday, July 09, 2011

Solar industry in danger of provoking green backlash

"Cowboy" solar PV companies are undermining consumer confidence in the technology by mis-selling, and the industry is failing to police itself in a competent manner.

The sting operation by consumer magazine Which? and evidence from the small scale renewable industry's own self-regulating bodies shows that consumers are not adequately protected from bad practice.

The sting operation in which mystery shoppers got solar PV installers to estimate for a domestic system funded by Feed-in Tariffs found that three quarters of solar PV companies overestimated how much energy the PV modules would produce, and most underestimated how long it would take for the system to pay for itself.

One company overestimated profit by £4,275 over 25 years and underestimated the payback time by three years, compared to their expert’s calculations.

Seven out of the 12 salespeople even recommended installing solar PV panels on a shaded part of the roof. Eight companies didn’t question customers about how much energy they used.

Hard-sell approaches were being used: one company, Green Sun, gave the customer 24 hours to make a decision. Another, Skyline Solar, said their discounts were on a 'first come first served' basis.

Ten out of twelve companies failed to mention that the inverter would need to be replaced at a cost of around £1000 every ten years.

And half the companies tested, such as Anglian Home Improvements, sent sales people to make a technical assessment to provide the quote.

Unsupervised selling appeared to be the main cause of the mis-selling problem.

Which? advises consumers needing impartial advice to check the Energy Saving Trust website.

The consumer rights body is also calling for installation quotes never to be given on the basis of sales visits alone, always to include a site specific estimate and clear information on the life expectancy of equipment and cost of replacements, and the full cost (including scaffolding) of installation.

Which? did another operation last year on solar water heating companies and found similar levels of poor selling.

The importance of location

The Government’s building assessment rules, the Standard Assessment of Performance (SAP), are used to work out a PV system's energy output by installers. Yet Which? criticises this practice because they do not take into account the location of the property, which can seriously effect the output of the modules.

It therefore suggests revising MCS rules on energy performance prediction.

“It seems extraordinary that the Government’s rules require companies to ignore whether you live in Cornwall or Scotland when working out how long it’ll take to pay for the solar panels," said Richard Lloyd, Which? executive director.

In fact the only place in the country which gets enough sunshine to make the modules work financially without a subsidy is Cornwall.

However, SAP and EIR ratings are supposed to be unaffected by geographical location in order to make it possible to compare buildings throughout the UK.

Yet, given that a large part of a building's performance is based on solar gain - the amount of heat from the sun captured by the building - this is bound to depend on the building's specific location. Therefore there is a strong case for changing SAP requirements to provide a more accurate overall picture of the building's performance.

To determine a PV system's output, rather than relying on a SAP rating, which is laborious to undertake, it is easier to use the latitude of the location together with the amount of shading the site receives throughout the year.

The failure of industry self-regulation

The industry is supposedly already self-policed, firstly by the Microgeneration Certification Scheme (MCS), and secondly by the REAL Assurance Scheme Code, set up by the Renewable Energy Association - a case of the industry policing itself. This is a consumer code for suppliers of renewable and low carbon micro heat and power generators to domestic consumers.

Consumers can only obtain Feed-in Tariffs for systems installed by members of the MCS.

Which? wants MCS and REAL to better monitor and enforce rules, remove rogue traders from the MCS scheme and publish results of enforcement action on an annual basis.

The efficacy of such confidence-boosting measures is crucial because unless the public has confidence in these schemes then there will never be the mass roll-out of energy-saving measures which the Government is hoping for in the future under the Renewable Heat Incentive and the Green Deal.

"We take the allegations in this report very seriously, and they will be thoroughly investigated," Gideon Richards, Interim CEO of the MCS and MCS Steering Group Chair said in response to the Which? report. He has set up a meeting with their investigators to discuss their findings.

The REAL Code is backed by the Office of Fair Trading as part of its self-regulation initiative, the Consumer Codes Approval Scheme, and supposedly specifically bans false or misleading information.

Virginia Graham, Chief Executive of the REAL Assurance Scheme, commented, "It is particularly disappointing to see one of the companies offering a discount to consumers for signing on the day and another offering a discount in return for providing monitoring information. These practices are expressly outlawed in the Consumer Code and we will be referring these two companies to the Non-compliance Panel."

It took a consumer watchdog to do what both of these bodies are supposed to do themselves, but neither did.

A staggering 2,791 companies are now registered with the REAL code to install solar PV.

For this reason, "we have to work hard to ensure 100% compliance with the Code," says the REAL website.

Many of the requirements demanded by Which? are already in the REAL Code. Its self-auditing questionnaire for its members includes the question, 'Are the company’s procedures for calculating its performance estimates, financial savings and payback time correct?'.

REAL claims to employ mystery shoppers to inspect one in ten of its members each year, but on questioning could provide no substantive evidence of how effective this is.

REAL does log customer complaints, which can be lodged and viewed on its website, but without the naming and shaming of specific members.

They received 75 complaints last year and have had 70 so far this year. 48% of this year's complaints are about PV installations, 14% about solar thermal (down from 27% last year) and heat pumps are receiving 35% of complaints - three fifths of which are for ground source and two fifths for air source.

For solar PV, half the complaints are about high pressure sales techniques and a quarter about a delay in refunding a deposit. Other reasons for complaints include making exaggerated payback claims, and falsely claiming to be MCS certified.

Last year there was a similar Which? report on mis-selling by solar heating companies. And 40 websites of such companies were reported for making exaggerated or misleading claims about the financial or environmental performance of solar water heating systems.

At least twelve of these forty solar heating websites were claiming to be run by supposedly REAL Code compliant companies – who displayed the REAL Code logo on their website.

REAL's Consumer Guide urges consumers to use well-established companies and obtain multiple quotes.

Solarcentury, for example, has been in operation since 1999. Its CEO, Derry Newman, attempted to reassure the public by saying, "Currently our network consists of 25 companies, those we consider the highest quality solar installers in the country. Many have been established and working with us for a number of years, otherwise they have all undergone an audit to establish the robustness of their business operations from accounting through to install.”

Barry Johnston, Managing Director of Solar Twin Ltd., also called for revising the MCS rules on energy performance prediction in order to improve the quality of solar PV installations, as well as for solar thermal.

Both companies are calling for the rogue traders to be punished or disqualified so that the rest of the industry does not suffer. "The last thing we want is a backlash," said Newman.

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