Solar News: 2 Feb 2011 also 14 and 18 March 2011 Solar Energy Investigation. Office of Fair Trading in Solar Panels Probe. OFT Investigate Renewable Energy Market. Off-Grid Energy Market to be Examined. Solartwin Welcome OFT Market Study.
OFT launch “Off Grid Energy Study” ahead of schedule. Solar industry included.
Solar OFT Off-Grid News Update: 18 March 2011: The scope of the OFT study has now formally been stated to include solar water heating. Barry Johnston, MD of solar Twin Ltd commented on its inclusion today:
“Hopefully, as a consequence of this welcome news, potential consumers solar water heating consumers will eventually benefit when:
- Safer solar water heating installations standards will eventually come into existence, via which, British innovation will start to be encouraged rather than blocked by old solar interests who have, in the past, been responding to well-founded fears of several disruptive innovations.
- Today’s state-sponsored performance estimation formulae for solar heating systems will start to give such innovations proper credit for actually being better
- Fraudulent oveclaiming for non existent energy is seen by DECC officials as a real problem (even though this wholescale fraud will never be pointed out by self-interested trade bodies).
- Several money-grubbing consultants, barely qualified experts and other heroes of incompetence who who currently “lead” and “represent” the solar industry will start taking a very serious interest in their stamp collections.
- the marketing tsunami of false performance claims for solar thermal will starts to ebb, and warnings about them will be heeded rather than ignored by regulators.
- Industry-led consumer watchdogs develop adult dentition (and optically, stop gazing up and protecting their assets).”
- Royalty-led “organisations with secrets” will openly declare any involvement in the operation and maintenance of the UK’s construction and energy industries (surely that’s going a step too far for the Great British Establishment?).
Original 2 Feb 2011 solar OFT news story.
Solar panels supplier, Solar Twin Ltd are delighted to reveal to UK’s long-suffering renewable energy consumers that the renewable energy industry will, at last, be examined closely as part of the Office of Fair Trading’s suddenly accelerated programme of work.
Barry Johnston, Managing Director of Solar Twin Ltd commented today:
“This OFT study is amazing news both for off-gas-grid energy customers, and also for ourselves at Solartwin.
“Renewable energy is a supposedly clean-green sector which, for over a decade, in some sub-sectors, has been plagued by poorly-overseen, self-serving self-regulation. Its consequent competition shortcomings and consumer interest deficits are long overdue for independent examination.
“We had virtually given up on any UK competition regulator ever looking at, not merely our particular company’s multiple competition challenges, but at the very deep structural issues which make it so self-serving, which result, too often, in the consumers’ interests simply being sidelined.
“On the issue, for example, that our competitors have given themselves about an 11% price/performance advantage over safer forms of solar in the retail market by cutting corners on legionella safety, our proposals for change have been repeatedly blocked, most recently by a non-technical committee of the relevant regulator (MCS) making an inappropriate technical decision that our concerns do not need to be taken forward to a technical committee. This delay / impasse means we are taking the matter public.
“On another issue, that our competitors have given themselves about 8% price/performance advantage over PV pumped solar in the market by not deducting pump electricity use from the “performance estimate” formula under MCS, again our proposals for change have been repeatedly blocked by the relevant committee which is dominated by mains pumped interests. Again this delay / impasse means we are taking the matter public.
“Some parts of the solar thermal industry are deeply self-serving. There are numerous other similar areas where the introduction of a level playing field is being delayed or blocked, despite us spending twelve years, lobbying and putting forward solid arguments for progress. In the context of the forthcoming RHI subsidy scheme, in which price/performance is the main determinant of a purchase, we need to make progress now. As with banks, industry self-regulation has served the industry very well but less so the consumer and the innovator.
“Credibility-wise, one challenge for us is, I suspect, that “green energy” is probably viewed as more cuddly, more trusted than the banks, so until the OFT stepped in on 25 January, we had found that the views of the trade bodies and the lobbyists (who control the regulations and hence the market) were largely trusted by the civil service who also heavily depend on them for expertise, and to whom we are generally presented as consensus-breakers and troublemakers who undermine their members’ interests.
“It is therefore very heartening to see that in light of increasing public concern about aspects of the market, the OFT, despite recent budget cuts, has decided to start this vital study early, ahead of schedule speaks volumes about its potential seriousness. Ahead of UK’s proposed new solar water heating systems subsidy scheme, the Renewable Heat Incentive (RHI) is the ideal time to look at these matters because it would be a mistake to boost an industry which operates in such a muggy climate.
“Solar Twin Ltd have been asking for a clean-up and we are all extremely grateful to our customers who have joined us in asking for change.
For over a decade we have been asking OFT to look closely at the UK solar water heating industry, in the context of gunge like this:
- State-funded “independent” documents and websites vicariously condemning innovation, thus limiting consumer choice,
- Cowboy trade bodies whose conduct and publications deliver the same, since some superior innovations threaten their members’s interests,
- Trade bodies imposing commercially motivated censorship of factual (but critical) marketing material in order to protect their market share.
- Trade bodies imposing unlawful fines on companies which do not self-censor “voluntarily”.
- Product certification processes being dominated by the old guard, “democratically” saying no to innovations and consumer safety,
- Government-owned, but industry-led, defective installation standards which actually require inflated performance claims to be made to customers,
- Widespread industry-consensus-legitimised corner-cutting by installers, leading to easily avoidable legionella risks for consumers,
- State subsidy for tens of thousands of potentially defective state funded domestic solar heating installations,
- State subsidy for thousands of defective commercial “twin coil” solar heating installations which do not comply with HSE safety guidance,
- Concerted safety cover-ups and “burial” of a crucial document which condemned these installations, apparently because of political and commercial implications,
- Dubious “best practice” definitions which perversely deliver the worst practice, from the consumer safety point of view,
- Undisclosed conflicts of interest, contract allocation issues, and the use of industry “consensus” to democratically batter innovation,
- The malign influence of paid lobbyists, and make-or-break market decisions based on the views of poorly qualified “technical experts”,
- Independent technical experts who sit on influential committees who ask for money in return for “fixing” problematic regulations,
- Ex-senior politicians on influential quango committees, who seem to expect consultancy fees in return for “fixing” out of date regulations.
- The sudden abandonment of clients, mid-contract and with no notice by their vital suppliers apparently due to industry pressure on the suppliers to do so,
- State subsidy mis-allocation which delivers, for the taxpayer, questionable value for money in competition, carbon and safety terms,
- Craven regulators and consumer protection bodies which interpret or make up rules on the hoof which protect dominant players,
- Consumer protection bodies “not getting around to reading” what they know all too well are huge consumer issues which are really too hot to handle,
- Warnings from people naming covert organisations, sometimes even direct from top players in the industry: “If you don’t follow my “advice”, I will act [against you again]”.
“Although we are a small player in UK, given our concerns, we have asked OFT if Solar Twin Ltd could, nevertheless, be a contributor to the study.
“Of course, no-one cannot prejudge the OFT’s outcomes, but I hope that some of its outcomes in the renewables sector can be viewed in the context of the whole renewable energy industry, not just in the context of of-gas-grid customers. On the basis of what we and our loyal customers have experienced, we think that the eventual finding simply can not end up delivering a “clean bill of health” for the solar heating industry.”
Eventual outcomes that Solar Twin Ltd would like from the OFT Off Grid study include (and probably many of these are wishful thinking):
- OFT describing some aspects of the UK solar thermal market as being knackered (correction: in ill health),
- OFT requesting a much better deal for UK renewable energy consumers because they are not being properly protected by the REAL Code of Practice, a supposed industry-led consumer code, perhaps by OFT requesting the upgrading (or replacement?) of REAL.
- The REAL Code’s top players will resign – with dignity – and each with a well deserved gong – for fighting valiantly to protect the green energy consumer against the solar thermal industry.
- The REAL Code will gain a better constitution: one which delivers equal treatment for all members and, oh yes, a better look-in for consumers.
- The REAL Code will start to trust (or at least read) evidence of market abuse from the likes of “shoulder-chippers” (their words) such as us,
- The REAL Code will sanction solar thermal member companies which make exaggerated financial performance claims such as “free hot water”.
- The REAL Code will sanction solar thermal member companies which make exaggerated carbon performance claims such as “zero carbon”.
- The REAL Code will sanction solar thermal member companies which make exaggerated energy performance claims such as “free energy”.
- The REAL Code will consistently sanction solar thermal member companies which supply goods which are not of satisfactory quality and fit for purpose
- The REAL Code will thank Solar Twin Ltd (sincerely) for what they have done to stop the industry from bringing itself into disrepute – ho hum!
- The REAL Code will lose and eventually regain its OFT approve status.
- The OFT will gain formal undertakings from dozens of REAL member companies which today make misleading claims such as “free hot water” “zero carbon” and “free energy” to stop making such false claims and OFT will publish the names of those lying companies on its website, as they apparently sometimes do so helpfully with companies which the STA regularly target with apparent assistance of REAL Code.
- OFT will publish information which will help consumers avoid being conned by solar heating salesspivs’ false performance and safety claims.
- Which? Magazine (UK’s top consumer magazine and website) will publish a full not partial expose of the solar industry, not just the STA’s jaundiced point of view and Which? will stop letting solar industry pressure force them to not publish safety articles on solar and Legionella.
- The Solar Trade Association, if it survives, will regularise its conduct.
- The Solar Trade Association, if still extant, will admit us as members instead of banning us from joining (in defiance of their own rules!) because we challenge their ways of working.
- The Solar Trade Association will acknowledge to Solar Twin Ltd the extent of the commercial damage it has caused as a consequence of its exclusionary conduct.
- The Building Research Establishment will acknowledge to Solar Twin Ltd the extent of commercial damage caused by its conduct such as excluding the Solartwin technology from gaining support under UK state subsidy schemes.
- OFT will make wide ranging improvement recommendations to the Government or to sector regulators
- UKs’ regulatory bodies will be required to operate to standardised, published constitutions and rules of operation.
- UKs’ regulatory bodies will all have genuinely independent appeals procedures which are also accessible and free to use.
- UKs’ regulatory bodies will be required to publish full details of their membership, membership affiliations, meetings, operations and decisions.
- The DECC-owned Microgeneration Certification Scheme (MCS) will be required to adhere to pre-existing BSI or CEN rules instead of making up their own on the hoof.
- The DECC-owned Microgeneration Certification Scheme (MCS) will acknowledge to Solar Twin Ltd the extent of the commercial damage it has caused as a consequence of the exclusionary conduct of certain of its members.
- The balance of membership on technical committees responsible for the content of standards at The British Standards Institution (BSI) will be reviewed so that innovation can be better represented.
- Regulators and contractors to government will be required to agree in writing to comply with robust declarations of interest conditions which include in their scope involvement in secret or semi-secret organisations.
- Consumers of renewable energy / microgeneration products will be able to demand typical life cycle analysis data from technology suppliers so that they can choose between energy supplies on the basis of whole of life energy, carbon and environmental impacts.
- Consumers of solar heating products will no longer have to put up with government-legitimised overstatement of system performance.
- The Renewable Heat Incentive (RHI) will not be defrauded of millions of pounds as a consequence.
- Users of unsafe twin coil solar cylinders will be able to claim a free legionella safety upgrade from their installer (with clear support of the REAL Code!)
- OFT will investigate and take enforcement action against companies suspected of breaching consumer or competition law.
- OFT making a formal “market investigation” reference to the Competition Commission.
- OFT will seek extension of the investigation regarding renewable energy into Europe.
Our expectations of regulators have rarely been met. Perhaps we expect too much. Anyway: even only one of the above happens, it will be better than nothing…
Edited extracts from the O.F.T website follow:
The Office Of Fair Trading have announced a market study into energy supplies for consumers who are not connected to UK’s main gas grid. The OFT study will look at whether the market is working for ‘off-gas-grid’ energy consumers who use sources such as heating oil, LPG and renewable energy sources like solar panels.
The OFT has brought forward its study into this market, which was in its draft 2011/12 work programme, following discussions with the Department of Energy and Climate Change (DECC) to allow time to consider any recommendations before next winter and in light of increasing public concern about aspects of the market.
The OFT is now consulting on the scope of the study, which it proposes should cover the whole of the UK, and consider a number of themes including:
- how well competition provides choice for consumers, both locally and regionally.
- whether consumers get clear information, competitive prices and fair terms and conditions
- the experience of customers: OFT proposes to survey the views of off-grid energy users.
Heather Clayton, OFT Senior Director of Infrastructure, said: ‘Two and a half million people rely on off-grid energy and it is vital that the markets that supply them function as well as they possibly can. We will be taking both competition and consumer issues into account through this comprehensive look at the market.’
The Office of Fair Trading has launched a market study into off-gas-grid energy and is initially undertaking a consultation on the scope of the study. OFT have set out an initial proposal for the scope of the study and seek comments from interested stakeholders.
Regarding the scope of the OFT Off Grid Energy market study, it is proposed to consider the supply of off-grid energy, which OFT take to cover a wide range of domestic energy sources including heating oil, liquid petroleum gas (LPG), renewable energy from sources such as solar panels, wind turbines and other forms of micro-generation, red diesel and other alternative energy sources such as coal, coke and wood. The Office of Fairtrading anticipate that the study is most likely to cover competition and consumer issues for heating oil, LPG and renewables. OFT are now consulting on the key matters of interest on which the study should focus and may amend the scope.
The Competition Commission completed an in-depth investigation of the domestic bulk LPG market in 2006. This resulted in orders taking effect in 2009 to remove impediments to switching between LPG suppliers. The OFT proposes to focus on the effect of the Competition Commission’s orders so far in the context of a broader study of off-grid energy, although it has an ongoing statutory duty to consider from time to time whether the orders are being complied with.
The OFT Off Grid Energy market study will take a comprehensive look at selected off-gas-grid forms of energy. It is expected to consider:
- Competition: including the outcomes for consumers on price, choice and quality and the existence of any barriers to switching (both within and between different energy sources), investment and innovation. Given that the supply alternatives available to consumers will vary considerably depending on their locality, which influences both their access to infrastructure and suppliers and the costs of distribution, the study will consider competitive conditions at local, regional and national levels.
- Supply and distribution: how well the market meets demand, including such issues as the availability of different supply options; the involvement of intermediaries in the distribution of supply and the relationships between suppliers and their distributors; how different options are accessed and purchased; and the fairness of the associated conditions of purchase including any credit agreements;
- The experience of the consumer: including the quality of service provided and the availability of information on costs, risks and alternatives (also covering the appropriateness of labelling and standardisation of information about alternatives). OFT will also consider the extent to which the markets meet consumers’ needs. The study will cover the whole of the UK, while recognising differences between Scotland, England, Wales and Northern Ireland; and, as mentioned above, considering the competitive conditions at the local, regional and national level.
Ofgem is obviously a key stakeholder partner for this study. OFT and Ofgem will work closely together where issues overlap with those within Ofgem’s jurisdiction and expertise. While the study’s focus is not specifically on access to and use of the gas and electricity networks, OFT will be working closely with Ofgem to assess the interaction between access to networks and the development of the off-grid renewables market.
Other bodies, such as the Department for Energy and Climate Change (DECC), Department for the Environment, Food and Rural Affairs (Defra), the Scottish Government (SG), the Welsh Assembly Government (WAG), the Northern Ireland Executive (NIE), the Department for Business, Innovation and Skills (BIS) and Trading Standards (TS), are closely involved and/or interested in various aspects of this important market for consumers. OFT will work closely and collaboratively with these and other relevant parties and take views during the consultation period to ensure that the concerns raised are addressed by the organisation best suited to do so and that all relevant organisations are kept informed.
Next Steps and Timings
The OFT Off Grid Energy Study Team will be contacting and consulting with a range of stakeholders across the industry in order to develop the scoping of the proposed market study. At this initial stage, OFT invite comments by 28 February 2011 on the scope of the planned study and the issues that it will cover. OFT will consider the responses, before formally launching the study in March 2011. At that point, OFT will explain the final scope, focus and nature of the work they will be undertaking. OFT will then undertake research and hold discussions with stakeholders until late summer. OFT intend to publish a report setting out their findings and recommendations in autumn 2011.
Please send your submissions to: email@example.com, or to Off-Grid Energy Market Study (2nd Floor) Fleetbank House 2-6 Salisbury Square London EC4Y 8JX.
Possible outcomes of a market study include one or more of the following:
- giving the market a clean bill of health
- publishing information to help consumers
- encouraging firms to take voluntary action
- encouraging an industry code of practice
- making recommendations to the Government or to sector regulators
- investigation and enforcement action against companies suspected of breaching consumer or competition law
- a market investigation reference to the Competition Commission.
The Q&A section of the O.F.T. website includes the following information, which we have reduced in extent and edited to improve readability:
Why have the Office of Fair Trading included renewables?
Well functioning markets offer consumers choice and competition: OFT want to examine the degree to which renewable/micro-generation energy sources offer an alternative to more traditional supplies like heating oil or LPG.
What are renewables?
Solar water heaters, ground and air source heat pumps, wood chip burners and the like.
What is micro-generation?
In this context OFT mean micro-generation from renewables -that is, the production of energy from renewable sources at a domestic scale.
Why have OFT highlighted heating oil, LPG and renewables as the most likely sectors for inclusion in our study?
These are some of the largest off-grid sectors and therefore the markets where a study can have the greatest impact and help the greatest number of consumers. These are also markets of specific interest to DECC.
How many consumers are off-grid?
2.5 million households are off the gas grid. About 1.5 million use heating oil and about 150,000 million use LPG say OFT.
Have OFT looked at these markets before?
OFT previously looked at LPG and, as a result, referred this market to the Competition Commission in July 2004
Who will OFT be speaking to during the market study?
O F T have spoken with relevant government departments and other bodies such as Ofgem, the energy sector regulator, and Trading Standards, prior to launching the consultation, and will continue to engage with them during the course of our work. OFT are keen to speak with private market participants and trade bodies to clarify our understanding of the issues in the relevant sectors. OFT will be approaching some firms and industry representatives directly. OFT would encourage any interested parties who want to contribute to the market study to contact O. F. T. directly.
OFT talk about the experience of customers / what do OFT mean by this and how / when are OFT going to survey them
Details will emerge after the consultation on scope (ie in March 2011) but broadly OFT are interested in any difficulties consumers have encountered with supply and whether there are common themes.
Breaking solar news: you heard it first from Solartwin! Regards, Barry.
Written and published by -
Genfit - 0844 567 9032