Several years ago, the Clean Energy Council (CEC) launched the Approved Solar Retailer program.
Lately, there has been a bit of debate about its merits and purpose, so I thought a recap of its goals and objectives might be worthwhile.
I am not and have never been employed by the CEC, although I have been involved in various capacities over the last 15 years or so. I was previously the Industry representative on the Approved Retailer review panel, helping to design the guidelines and assess applications, but resigned 3 years ago due to a conflict of interest.
I also act as the Industry representative on the Product Review panel, helping to assess product applications.
For the purpose of full disclosure, one of the companies I operated was a signatory and Approved Retailer and I also assisted several other companies to become Approved as a consultant.
I would add that I have also advised and worked with the Smart Energy Council, SEIA and the APVA over the same time. I aim to equally help all our industry associations where I can and where they will have me.
The CEC programs
The CEC also runs the Accredited Installer program and the two programs are often confused.
The Accredited Installer program is designed for solar designers and installers and sets out to provide a framework for design and installation standards compliance, best practice and a process for removing accreditation in the event of breaches.
The Approved Solar Retailer program is designed for solar retailers who may or may not also be installers and sets out to provide a framework for good retail behaviour, a code of conduct and a process for removing approval in the event of breaches.
From the Code of Conduct itself:
“This non-prescribed voluntary code of conduct (the Code) aims to promote best practice measures and activities for retail businesses selling solar photovoltaic (PV) systems. This Code is for retail businesses that want to demonstrate the commitment they have to promoting responsible activity and development in the renewable energy sector across Australia. This Code is not intended to replace existing consumer, energy or environmental planning legislation, policy or regulations at local, state or federal government levels, but to bring about increased accountability within the PV retail industry”
It’s worth going back 10 or 15 years to understand the Approved Retailer program’s history, limitations and intentions.
Many years ago, pure solar retailers began to emerge which was changing the industry. By using sub-contractors, they could sell solar, make any promise they wanted and there was no way for our industry associations to take any action. It was a big change from installers who also sold the equipment.
The behaviour of retailers is primarily governed by the Consumer Law laid out by the ACCC and managed by various state bodies such as Fair Trading NSW.
These bodies can and do only take enforcement action when a consumer is aggrieved, suffers a financial loss and takes the time to make a complaint.
Over many years, installers debated and helped work on this issue with their industry associations, trying to develop a solution that would ensure that consumers had some degree of protection from bad retailers and installers were not held responsible for their actions in the event they sub contracted to them.
This proved to be extremely challenging, due to the fact that consumer laws were already in place to theoretically protect any type of consumer, and they were changing over time.
Quite simply, the CEC had no legal authority to challenge a solar retailer who was behaving badly.
Eventually the result was the Approved Retailer program which was developed and funded by the CEC. The program underwent extensive industry consultation and eventually a model was settled on which made it voluntary to address the issue of authority.
By voluntarily signing up to the program and demonstrating ongoing compliance, the CEC had the authority to take a company to task and ultimately to strip them of their Approved Retailer status.
However, only the ACCC or state bodies have the power to punish, prosecute or ban a company or individual from trading.
The ACCC validated and signed off on the program as acceptable to them, adding an extra level of confidence that it had been developed soundly.
What the code achieves in a nutshell
The objective of the Approved Retailer program is to assess solar company’s processes, behaviour and systems to ensure that solar consumers are offered a greater level of protection.
The Code of Conduct spells out what it required to be compliant and how it will be assessed in detail.
Again, from the Code itself:
“The Code also deliberately connects the responsibility of the retailer with the obligations of accredited installers/designers, to ensure that retailers are fully accountable for the actions of any subcontracted parties. This Code aims to address identified issues that may impact on the reputation of the solar industry.
These issues include:
- Misleading claims given to consumers regarding the performance of their PV system and future electricity bills.
- Misleading advertising regarding the size of PV systems, the value of available government incentives, and the suitability of the PV system.
- The retailer not taking responsibility for the whole of the PV system including product warranties and workmanship.
- Sub-standard installation work.
- The retailer not taking responsibility for subcontracted parties acting on their behalf and any parties who generate sales leads utilised by the retailer.”
A lot of the focus is deliberately aimed at the “hot spots” of poor retail behaviour including pre-sales activities like advertising and promotions, sales and quoting practices, contracts, approvals and finance disclosure.
Post sales activity is also targeted through the need to have strong processes in place for cooling off periods, refund processes, customer training, connection support, warranty privacy and complaints procedures.
Companies that apply are assessed through review of their documentation, internal processes, interviews and reviewed by a panel including consumer affairs and industry representatives.
The CEC also conducts checks to ensure that Directors are not subject to bankruptcy claims or phoenixing, among other things.
Application costs a couple of hundred dollars and there is a capped sliding scale depending on size once approved.
An average small solar company could expect to pay perhaps $600-$800 for being a signatory. There is a bit of work, of course, to apply and demonstrate ongoing compliance (you get annual audits) but I can tell from experience it’s not too onerous.
The CEC also watched its signatories very carefully and has demonstrated that a failure to comply will result in being removed.
It also rejects around 50 per cent of applications again demonstrating that the bar is high enough to not make it to easy. You have to be a bit serious about compliance and processes or you just wont get through.
The CEC Code of Conduct is not a perfect scheme and can undergoes ongoing improvement.
However, it is the only scheme in Australia (and one of the very few in the world) that has been developed specifically to create additional solar consumer protection measures and targets retail behaviour and practices in addition to installation behaviour and practices.
Given that only one hundred or solar companies are signatories out of perhaps four thousand or solar companies Australia wide, it seems like a no brainer to me for solar companies to sign up and a no brainer for consumers to preference Approved Retailers.