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.

Microgeneration Strategy published - but will it over-achieve?

The government's new strategy envisages the ideal cost of installing renewable microgeneration technologies to move to around £5-6,000 with a payback period of around five years so that millions of householders take it up. But it's worried that if its strategy is a success, then its support schemes may run out of money.

Its new Microgeneration Strategy and Action Plan for England, published yesterday, aims to remove non-financial barriers to the spread of these technologies, and calls for more demonstration homes, which are known to be the best way to promote uptake, and for industry, local authorities and government bodies to work together.

But the Government is worried about the scheme becoming a victim of its own success. Its accompanying impact assessment warns that implementing the strategy "could encourage greater uptake than we have projected" which ″could drive up subsidy costs of the schemes".

As a result it promises to keep tight watch on levels of uptake given that more funding would not be available over and above the ｣15 million allocated to the Renewable Heat Premium Payments, ｣850 million funding for the Renewable Heat Incentive or the ｣610 million a year for FITs.

Launching the strategy and action plan, Greg Barker said, "The onus is on the industry itself to make the most of the opportunities presented by the financial incentives - supported by Government action to streamline regulation such as planning and standards, while at the same time ensuring consumers are protected."

As an example of what could be done, the Government proposes that information on financial incentives could be included in Energy Performance Certificates (EPCs) to stimulate take-up of renewables. Market research by Consumer Focus has shown that more people would take up renewable energy in their homes if this was included at the point of property sale or rental as part of the green deal advice process.

An army of skilled workers will be required to meet the demand but accreditation needs to be standardised. A survey is to be undertaken of all training schemes to recommend what's needed to create the competent installers of tomorrow to be completed by October 2012.

Industry must do its bit as well, including analysing the whole product life-cycle for each microgeneration technology to pinpoint where things could go wrong in advance and bolster customer confidence. It should do more to market the concept of microgeneration and the potential benefits to consumers with independent source of advice by September this year, and produce a guide on warranties and insurance schemes for customers and factsheets for each technology with information on maintenance and the longevity of key components, by April next year.

Micro-hydro will be removed from the Microgeneration Certification Scheme for the purpose of Feed-In Tariff eligibility to make it easier for customers to find an appropriate installer. Schemes under 50kW are already rigorously regulated under environmental and planning consenting requirements. The Chief Executive of the British Hydropower Association, David Williams, called this "a great relief".

Importantly, the strategy recognises also the value of heat pumps, micro-CHP and, into the future, compressors and absorption chillers which could provide solar-powered cooling.

Wood fuel is also considered vital and the Government is developing a Bio-energy Strategy for publication later this year, which will set out the government's strategic direction for bio-energy to 2020 and beyond.

Building Regulations and the Standard Assessment Procedure (SAP) will also be amended to better quantify the benefit of including renewables in developments.

Government and industry will work together to explore opportunities to expand the microgeneration sector by working with European level initiatives. This includes, for example, Smart Cities, which launched on 21 June, and addresses technologies, local production and energy networks, including electricity, heating and cooling.

Launching the initiative, Energy Gnther Oettinger said: "With an 80 million Euro package we plan to demonstrate smart integration of urban energy technologies in selected pilot cities. This will kick-start important new markets for European industry. Cities are key to the EU's objectives of 20% energy saving by 2020 and to developing a low carbon economy by 2050, because 70% of the EU's energy consumption takes place in cities." Manchester is the English city taking the lead in this imaginative scheme.

Community energy

Connected with this, the Government wants to encourage more communities to take up district level renewable energy schemes that would be owned by the communities themselves.

Currently there are many barriers forming an uphill battle to communities that wish to do this, such as lack of knowledge about planning, local awareness, skills, time and access to finance. DECC has pledged to do more to address these issues with a stakeholder group to be set up next month, including developing the Community Energy Online web portal and engaging in collective purchasing of renewable energy in order to get a better deal.

The latter opportunity was identified earlier this year in a BIS proposal, Better Choices: Better Deals. It cites the pioneering example of Barnet in achieving this and, in fact, many of the initiatives set out in the microgeneration strategy.

Good Energy in particular has welcomed the recognition in the strategy that community energy projects come in all shapes and sizes and could be as large as 20MW in capacity, and that the Government is committed to a wider distributed energy strategy as part of its Electricity Market Reform.

Microgeneration may be eligible for £10,000 Green Deal support

The Green Deal, the Government's flagship scheme for giving buildings £10,000 of energy-saving improvements, will include microgeneration technologies like heat pumps and solar power.

Climate Change Minister Greg Barker has published further details of how the Green Deal scheme will work, with a draft list of measures that the scheme will permit to be financed; a Green Deal Code to protect consumers; and details of the new Energy Company Obligation (ECO) to tackle fuel poverty.

Businesses as well as householders will be able to access up to £10,000 upfront to pay for energy efficiency work, repaying the costs through savings on energy bills from next year.

Consumers will get BSI quality assurance from a Green Deal Code of Practice which will cover providers and installers, and a Green Deal advice line will be set up.

The principle of the Green Deal is being called The Golden Rule, under which expected savings from measures will repay the costs over 20-25 years. The cost-benefit levels for each measure are still being calculated.

Consumer groups are welcoming the proposals. Audrey Gallacher, head of energy at Consumer Focus, said: "Particularly welcome moves are the introduction of an independent advice line and more robust complaints handling and redress measures. This should not only help consumers make informed decisions on products and services, but mean support is there if things go wrong.

"The Green Deal will be sold through a spread of providers from energy companies to DIY chains."

Confirming what I've observed myself before, Richard Lloyd, CEO of Which?, cautioned that: "Our latest research into cavity wall insulation uncovered inadequate inspections and poor advice. For this scheme to be a success, Green Deal assessors need to be held to the highest standards. £10,000 represents a major investment for most people, so the Government must ensure that the financing of the scheme is fair and good value for customers."

The £10,000 is not to be seen as a cap, however.

"Central to the scheme is the fact the repayments have to be lower than energy savings," said a DECC spokeswoman. "As long as the likely savings from a package of measures are more than the costs, the project will be financed. There is no cap."

This is great news for the most energy-inefficient buildings, for example in the rented sector, which could benefit from a host of much-needed measures.

The eligible measures

An industry-wide Call for Evidence and Literature Review on the costs and benefits of a range of measures was issued in March 2011, and the results are not yet in, so the published list is indicative only, but it includes the following:

• Heating, ventilation and air conditioning: Condensing boilers; Heating controls; Under-floor heating; Heat recovery systems; Mechanical ventilation (non-domestic); Flue gas recovery devices


• Building fabric: Cavity wall insulation; Loft insulation; Flat roof insulation; Internal wall insulation; External wall insulation; Draught proofing; Floor insulation; Heating system insulation (cylinder, pipes); Energy efficient glazing and doors


• Lighting: Lighting fittings; Lighting controls


• Water heating: Innovative hot water systems; Water efficient taps and showers


• Microgeneration: Ground and air source heat pumps; Solar thermal; Solar PV; Biomass boilers; Micro-CHP.

When making an inspection of a building, Green Deal Assessors will draw from this list of eligible measures to make property-specific recommendations.

The assessor will then work out whether the estimated annual saving is expected to be equal to or greater than the expected annual repayment costs. If it is, then the work can go ahead.

Certain measures could have an extra upfront subsidy - via the Energy Company Obligation. Alternatively a householder could choose to pay a top-up to bring down the repayment cost.

As an example, the documents cite that external wall insulation could pay for itself in 30 years based on an installation cost of £7,600. With a subsidy, the repayment period could be significantly reduced and brought within usual finance periods of 20 to 25 years.

The list has been welcomed by the industry. "It's encouraging to have as wide a list of technologies as possible included," said John Alker of the Green Building Council.

He added that as the scheme allows people to top up the Green Deal financing with their own money, and includes microgeneration technologies, this would encourage them to invest in upgrades.

Friends of the Earth's Dave Powell commented that adding microgeneration technologies to the Deal could make it more attractive, but it might reduce the amount of money available for insulation and draughtproofing, which is always more cost-effective.

The Government has realised that often it only makes sense to install a measure while other renovations are occurring, such as under-floor heating, or to add an additional measure to a package, such as installing heating controls when fitting an upgraded boiler. Further guidance will therefore detail the effects of sequencing.

It is not yet clear how, if the Green Deal will cover microgeneration, it will fit in with the Renewable Heat Incentive (RHI) - kicking in at the same time for domestic properties - and Feed-in Tariffs (FITs) for renewable electricity.

The Energy Company Obligation

The ECO will make sure that cases will still receive attention where the Golden Rule will not work but where energy efficiency improvements are needed.

For these cases, it will mandate energy service companies and utilities to meet the needs of the lower income and most vulnerable first, followed in priority by those properties needing the next most cost-effective measures that do not meet the Golden Rule for example, solid wall insulation (SWI).

This is intended to boost the supply chain for SWI, which is still relatively small, and bring prices down, which will help the measure meet the Golden Rule.

The ECO's funding 'pot' is expected to provide between £1bn and £2bn a year, but will inevitably result in higher general fuel prices.

ECO support is intended to be integrated into the Green Deal framework so that where they combine to deliver improvements, the consumer will just see one seamless package on offer from a Green Deal provider.

Suppliers and Green Deal providers will therefore need to work together to provide an offer to the consumer that comprises the optimum mix of support between Green Deal finance and ECO subsidy.

New grants for renewable energy

The Government has announced £12 million in funding for industry, businesses and community groups investing in biomass-fuelled heating and combined heat and power systems, including anaerobic digesters, in England.

It's a pittance, a drop in the ocean, but it's better than a kick in the gonads.

Round 5 of the Bio-energy Capital Grants Scheme is now open for applications until at least 30 April 2009.

It will pay 40% of the difference in cost of a biomass boiler and the fossil fuel alternative up to £500,000. “Nearly half of the UK’s carbon emissions come from heating, so it’s essential to change how we heat businesses, hospitals, schools and community buildings,” says Sustainable Development and Energy Innovation Minister, Lord Hunt of Kings Heath.

Since the scheme was launched in 2002, £55 million has been used to set up biomass power stations, biomass-fuelled heat and power plants and biomass heating systems.

Schools, hospitals, charities and local authorities can also apply for a slice of £7 million from the Low Carbon Buildings Programme for microgeneration technologies.

Government says 'yes' to feed-in tarriffs - or does it?

The use of feed-in tariffs as an incentive for microgeneration, which have proved so successful in Germany, "will be investigated", according to a press release from Defra*.

The announcement was buried deep within a release about home energy use advice on 18 November, but is the first time that such a positive statement has been made by the government on the issue.

This will be welcomed by many people - but there's one thing wrong with the announcement - it shouldn't have been made! Someone in Defra dropped a clanger.

Many and loud have been the clamours for such a tarriff over the years, from the industry - eg the Renewable Energy Association - but also recently both the Conservatives and the LibDems have made it their policy. The reason for it is that countries which have such a tarriff have generated robust renewables industries, and it's been highly effective in increasing the amount of renewable electricity generated, combating climate change and helping countries meet EU targets.

The reason the Treasury has rejected it for years and years is, of course, the cost: up to eight times the current subsidy level.

The feed-in model guarantees producers a fixed price - 49 euro cents for a KW/h photovoltaic electricity in Germany and Italy, and 50 cents in Greece - for electricity generated from PVs. It was introduced in Germany in 2000, and revised in 2004 to cover the full costs involved in producing solar electricity, sparking a boom. Germany will have almost 20 times as much PV by the end of 2007 as in 2000 when there was just 44MW, according to the German Solar Industry Association. It has led to around 800,000 properties having the technology installed and 55 percent of the world's photovoltaic power is generated on solar panels set up between the Baltic Sea and the Black Forest.

In the UK we have the Renewables Obligation, which compels suppliers to purchase an increasing proportion of electricity from renewable sources. In 2006/07 it is 6.7% (2.6% in Northern Ireland) and will rise to 10.4% by the period 2011-12, then by 1% annually for the five years following. It has often been criticised for being ineffective, bureaucratic, slow, and in particular excluding small generators such as householders.

However, when I sought clarity for the announcement and more details from Defra, I was referred to BERR, being responsible for energy, as the press office knew nothing about it.

The spokesperson for BERR went away to investigate, and came back to say there was no work, no plans, and certainly no policy at the moment on feed-in tarrifs, and no idea why Defra stuck this in.

I should go back and ask Defra.

Back there, I asked Kate Belson at Defra to dig into it and eventually she came back and announced that the announcement "was just stuck in as an example of all the things we'll be considering" to encourage microgeneration.

It was included merely as an illustration. I wonder why that was picked out in particular.

So, sadly, don't get excited.

Defra is slightly more radical than the Treasury or BERR, so perhaps they're being cheeky. All the same, campaigners for feed-ins should use this as a lever for what it's worth and press the government on exactly what investigations they WILL be pursuing.

[* the announcement is buried as the third bullet point in the second list of bullet points.]

Thinking about installing solar electricity?

Thinking about installing solar electricity? Then learn from others' mistakes!

The results of field trials and lessons from 500 real-life systems in the UK over seven years are now available online from the Large-scale and Domestic PV Field Trials programme.

They have been grouped together for ease of use on aspects of design, installation, commissioning and operation.

The pie-diagram is the result of a survey of users' feelings about their PV installations!

Other useful Department for Business, Enterprise & Regulatory Reform (BERR) technology sites

> Renewables website
> Sustainable Technologies
> Technology Programme
> Technology Strategy Board
[What a shame that Gordon and Malcolm don't pay any attention to them]

Nuclear vs solar water heating and carbon impacts

New nuclear build is carbon lighter than fossil fuels but not as light as some renewables.

All renewables have a carbon impact, but it varies enormously from technology to technology. For example, much electricity is used for water heating. Solar water heating has negligible carbon emssions associated and can provide 30-50% of hot water over a year, depending on the location and orientation.

Electricity is used for space heating, and so is gas. Again, with new buildings, passive solar designs and high efficiency can reduce to almost zero the amount of fuel required. Heat pumps can triple the value of the energy input.

Figures from the LCBP show solar water heating was by far the renewable energy installation of choice for householders obtaining this grant. At the end of May, the figures showed that since it launched in April 2006 the LCBP has directly funded 2175 installations on homes, including 1467 (over two thirds) solar thermal heating systems, 313 (14%) solar PV projects and 242 (11%) mini-turbines.

That proves its popularity and effectiveness. The Energy Act should make it mandatory that all new buildings install this technology, and set retrofit targets. But as far as I can see it doesn't even mention this technology.

Space and water heating counts for 83% of domestic energy use (BNDH12, quoted in EST's Rise of the Machine, page 14) and about the same for office use. Together, offices and homes account for around 35% of UK energy use. Ie, 28% of total UK energy use.

Providing 40% of this by passive solar, solar water heating, heat pumps, domestic CHP, and woodchip/pellet boilers, would account for a significant proportion of the amount of power requirement as that required to compensate for the loss of old nuclear power stations.

It would have almost as great an impact in a shorter time scale and far cheaper but with little environmental impact than building new nuclear power stations, as well as creating more, sustainable jobs.

The above forms my answer to question two of the government's nuclear consultation

Local energy, especially renewable heat, needs more support - Gov Committee

The government should do more to support local energy, according to the House of Commons Trade and Industry Committee.

Preferring the term "local energy" to “microgeneration” because it "is easier to understand and less restrictive", it argues that "there is too much emphasis on electricity production and not enough on local heating schemes - household or community-based." Roughly 1.3 million homes replace gas boilers each year, and Centrica estimates that micro-CHP systems could displace as many as 30% by 2015. It suggests that new housing schemes be fitted with CHP district heating. Furthermore it complains that Government payback figures, particularly for solar water heating panels, are far too pessimistic.

It urges energy suppliers to offer local energy systems with energy efficiency measures as part of a package of services to customers. Planning restrictions on rooftop wind turbines and solar panels should be removed, incentives streamlined, and the electricity distribution firms must pay a proper market rate for any surplus produced by such systems.

It acknowledges thast most forms of local energy are not suitable for all locations or uses. Micro-wind power's potential is "in danger of being oversold", according to one witness, so the government must ensure adequate information is available to consumers.

It says smart metering will be an excellent tool for promoting energy efficiency and export measuring, and calls for a deadline of 1 July 2008 for establishing standards and interoperability and a national roll-out scheme as in Italy.

However, local energy "cannot make a significant contribution in the next decade to closing the capacity gap created by the decommissioning of coal-fired and nuclear power stations—local energy is not a panacea that will 'keep the lights on'."

> Download the report