Clean Energy Council chief executive Kane Thornton explains the reason behind the new level of rigor which is being applied to the council’s Approved Solar Retailer program.
Purchasing solar is complex and confusing for customers. They need help in determining which retailers meet higher standards of service and will provide a comprehensive whole-of-system warranty, whose marketing claims can be trusted and whose directors haven’t run other dodgy solar companies that avoid their obligations and rip people off.
Six years ago, a group of solar businesses came together to address this problem and preserve the integrity of the solar industry.
It was a diverse group. Many of those present represented small or medium-sized solar retailers. What they had in common was a passion to end a race to the bottom on the cost – and ultimately quality – of solar power systems. They were also responding to concerns raised about a handful of unscrupulous operators who had begun entering an industry on the rise.
After exploring a range of options to raise the bar on retailing practices – and limit the activity of notorious individuals with a history of bad business behaviour – it was agreed to establish a voluntary industry code of conduct to allow the good guys to differentiate from the low-quality players.
While it was recognised that there are a range of regulators in the game (like the Australian Competition and Consumer Commission [ACCC], energy safety bodies and consumer affairs), none of them had the remit or capability to fully tackle dodgy retailing.
It’s also worth remembering that regulators can only take action after someone has done something wrong – what was needed was proactive action to encourage better business practices and protect consumers rather than simply punishing them after the damage has been done.
The Approved Solar Retailer program was the result. Established as a voluntary industry code after extensive consultation with the solar industry, regulators and a broad range of consumer groups and stakeholders, it kicked off in 2013 after being established with an independent review panel and authorised by the ACCC.
The Approved Solar Retailer program was voluntary, meaning it took a while for the program to gain momentum and a reputation. But we believed it was worth investing in for the long haul.
State governments became aware of the program and its potential for sifting out the good operators from the bad ones, and gradually more and more local and state governments have started to prefer Approved Solar Retailers in their own tenders and programs.
It helps to give governments greater confidence that customers will have a better experience, and that government subsidies do not line the pockets of a dodgy business operator whose last company has just folded and started up again under another name. There are now over 250 Approved Solar Retailers in the program, many of them small and medium operators from regional areas.
Yesterday the Victorian Government announced it was requiring all systems purchased under the Solar Homes program – a $1.3 billion scheme supporting the installation of solar on 700,000 Victorian households over the next decade with a subsidy of up to $2,250 – to be from an Approved Solar Retailer.
It will be a phased-in requirement over the next eight months, giving retailers time to get their ship in order and go through the rigorous application process.
This will be annoying news for two categories of the solar industry.
Firstly, low quality retailers who don’t meet the standards required by the Approved Solar Retailer program will be excluded from the Solar Homes program in the future. The current Approved Solar Retailer program rejects 35-40% of all applications. Stand by to hear complaints about this new government requirement being anti-competitive to their business model (which essentially amounts to preying on naive customers with dodgy practices).
But we also need to acknowledge the second category that will be annoyed: some of the good operators. While there are already over 250 of them across the country that have gone through the process to become approved, this new requirement will mean hundreds more quality operators will need to go through the rigorous assessment process, just to confirm that their practices are (and may have been for years) ship shape. Unfortunately, this extra cost and effort is necessary because of a bunch of dodgy players.
Once approved, all retailers need to ensure they continue to deliver on their promises and walk the talk. The compliance regime has been tightened, with breaches of the code investigated and a clear set of actions taken against retailers scaled to the severity of the breach. Retailers are being regularly audited and investigated and a mystery shopper program is being put in place.
We are committed to making sure it is of the absolute highest integrity, and this will involve suspensions and cancellations if they are required.
Yes, this adds more burden onto solar retailers wanting to participate in the Solar Homes program. But governments are recognising the Approved Solar Retailer program as an effective, off-the-shelf way to encourage better behaviour and weed out the unscrupulous players that take advantage of customers and give the industry a bad name.
For most businesses, the cost of doing business has just gone up slightly. But for those who aren’t interested in delivering quality to customers, they’re about to find that the cost of doing business has gone up a lot more than they bargained for.