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Renewable Energy Conduct Regulator REAL Code to answer misconduct (!) incompetence and insolvency claims in High Court to Solar Company.

Filed under: Latest News

Company Director and Magistrate, John Oddi is so fed up with the governance of the UK solar industry that he has taken one of its regulators to the High Court!

Which regulator?

The funny thing is that the regulator is the REAL Code. Funny because a conduct regulator is having its conduct challenged. REAL is a conduct regulator which, in our experience:

  • Failed to tell us and the public whether 80,000 defective solar thermal installations could get free legionella safety upgrades.
  • Was unable to stop two giant multinationals (guess who!) from getting away with overstating the benefits of solar water heating.
  • Suggested we should leave the REAL code after we chased them for some missing (awkward) answers.
  • Slags off folk as having a “Large Chip on their Shoulder” if they dare try to clean up the industry.
  • Manipulates markets unreasonably, such as against national companies by telling people to get local quotes.
  • Refused to clean up a plethora of false performance claims being made by leaders of the solar thermal industry.
  • Even welcomed one of these false claimers as adjudicators on their disciplinary committee.
  • Regulates more for the benefit of industry incumbents than for the environment and or the public.
  • Fails to require declarations of interest of potential pecuniary interest, such as freemasonry.

What’s the story?

On one side is Crystal Doors and Windows, a local UK home improvements firm which tried to move into selling and installation solar PV. The main story is here with further information here. The next section comprises information and quotes culled from both articles.

In summary, UK’s Renewable Energy Association and its wholly owned REAL consumer scheme (a “join or you die” scheme to which all renewable energy installers must sign up and adhere to in order for their installations to be eligible from state subsidy, which in turn drives over 95% of the UK renewables market) are facing a High Court legal action over damaging claims it has unfairly targeted companies with a campaign of disruption.

The REA and its wholly owned Renewable Energy Assurance Limited (REAL) are being challenged in court over whether it is acting beyond its powers and unfairly interfering with legitimate companies.

The court papers also raise concern that REA and REAL, which, in a stakes-raising credibility issue, has just been chosen by Government to help regulate the Green Deal scheme, were last year both actually operating while insolvent.

A judge has been asked to force REA and REAL to reassure its members by supplying up to date facts about its finances and reveal the nature of a massive employee fraud that happened in 2008 and to elaborate on exactly what steps it took to recover the loss.

A claim his now lodged with the High Court in London. This sets out in detail how the industry trade association has acted and is asking for a ruling that the REAL must act without bias and provide members with genuine support.

Crystal claims by meddling inside the affairs of companies, REAL is not acting “fairly, reasonably or impartially” and that the national trade association has demonstrated a clear bias against certain industry sectors. Crystal also claim REAL have not adhered to its own code and set of bye-laws.

It adds: “In so doing, [REAL] have failed to act in the interests of the renewable energy industry sector or of the consumer.”

They claims that REA has not exhibited a “necessary or basic level of competence” with regards to the administration of the REAL scheme or the administration of its own affairs, including its finances.

The central part of Crystal’s claim is that REAL discriminated against Crystal because it is viewed negatively as a ‘home improvement’ firm and not a ‘solar energy company’. Crystal quoted the following article posted on the REAL website by Virginia Graham, CEO of REAL, to illustrate its claim:

“… having established themselves with aggressive selling of double glazing in the 80’s, unscrupulous companies shifted to conservatories, driveways, alarms, and solar thermal in the 90’s, and are now trying hard to make their mark in solar PV. With capital costs falling sharply, companies can make a very good margin between now and next April, when the feed-in-tariff level is revised. Sadly, their shenanigans run the risk of ruining the reputation of our industry, so in the REAL office a great deal of time is spent monitoring these companies as well as tip-offs from REAL Installers, members of the public, trading standards officers and others to keep these rogues out of REAL.”

Crystal claims that such rhetoric which is aimed at double-glazing firms is wholly negative, even though many companies (including themselves) are members of the REAL Code.

In an interesting inter-trade body spat, The Glass and Glazing Federation (GGF), of which Crystal are also members, has recently challenged REAL over the matter. GGF are still waiting to receive a reply.

Crystal maintains that in order for solar technology in the UK to become mainstreamed, construction and home improvement companies that REAL are claimed to discriminate against must in fact play a vital role.

Crystal even contests that, in addition to the claims outlined above, both the REA and REAL have been operating whilst insolvent according to accounts published last year. Published accounts show REA and REAL owing £118,244 and £211,651 in liabilities respectively.

Interestingly, the court action is being launched by the same lawyers who defeated the Government over the unlawful cuts to the Feed-in Tariff on behalf of MCS-registered Crystal Windows and Doors. A senior lawyer at Prospect Law said: “There has been growing concern about REAL’s competence and fairness for some time. This is about one company taking High Court action to try to sort these issues out and to stand up for what is right for the renewable energy industry.”

John Oddi, MD of Crystal Doors and Windows, said: “Simply, we want the renewable energy industry to be overseen and represented by a fair and ‘fit for purpose’ organisation. The green economy is far too important for businesses and consumers alike for there to be fundamental issues at the top.

“There are 400 of us here at Crystal and we’re very proud of our business and our diversification into solar power. Companies like ours should be supported, not hindered, whilst we grow and create much needed green jobs.”

Crystal is based in London. It has an annual turnover of £26M, and is one of the largest employers of its kind in the region. Crystal has installed over 120,000 windows and 600 solar PV installations since diversifying into renewable energy in 2011.

On the other side is a national monopoly regulator  called Renewable Energy Assurance (REAL), who has said it will defend with vigour the High Court action that has been taken against it by one of its members over claims of unfair practices and breaches of its own code. For balance we have published REAL’s full statement here and below.

Renewable Energy Assurance Ltd (REAL) runs a Consumer Code for the small-scale renewables sector approved by the Office of Fair Trading (OFT). The purpose of its Code is to maintain the highest standards of consumer protection in the sector.

REAL has been working with both parties to resolve a complaint from a consumer against Crystal Windows and Doors. The complaint remains unresolved.

During this process, Crystal has started legal proceedings against REAL regarding its administration of the Code. REAL treats any attempt to challenge the consumer safeguards under the Code very seriously and will defend the court proceedings robustly.  The claim against REAL’s parent company, the Renewable Energy Association (REA), misrepresents historic events well-known to members at the time and resolved to their satisfaction.  Notes to Editors:

  •  The Renewable Energy Association (REA) represents renewable energy producers and promotes the use of all forms of renewable energy in the UK across power, heat, transport and renewable gas. It is the largest renewable trade association in the UK, with over 900 members, ranging from major multinationals to sole traders. For more information, see: www.r-e-a.net
  •  Renewable Energy Assurance Ltd is a wholly-owned subsidiary company of the REA. It is a company limited by guarantee that administers an industry Consumer Code approved by the Office of Fair Trading (OFT) under its Consumer Codes Approval Scheme (CCAS). For more information, see: www.realassurance.org.uk
  • REAL works to ensure the highest standards of consumer protection in the small-scale renewables sector. It is obliged by the OFT to audit and mystery shop a significant proportion of its members each year in order to ensure full compliance with the Code. REAL is required by the OFT to work to resolve any complaints registered against its members, and to audit any such members.

 

 

 

 


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