Aberdeen City Council has revealed that it was forced to pay £275,000 in lost income after solar panels installed by a now failed company were switched off following a series of “thermal events” that had to be reported to the Health and Safety Executive.
The local authority engaged Mark Group in 2012 to supply and install solar panels on council buildings which were estimated to result in energy savings of £100,000 every year.
The financial outlay required for the portfolio was made by Our Generation Solar with Aberdeen City Council purchasing the cheaper energy from the company. As part of the deal, the authority had a contractual obligation to pay loss of generation income to the company, which includes loss of income from the electricity sales and Feed in Tariff.
Following installation, the council was forced to turn off the panels after three “thermal events” were recorded which were classed as RIDDOR incidents (Reporting of Injuries, Diseases and Dangerous Occurrences).
As a result the council received claims for compensation for lost income from the supplier between 1 August 2013 and 1 May 2014 totalling £275,000. During this time, Fire Risk assessments of all the properties were carried out and a list of required actions was prepared to enable the systems to be re-commissioned and switched back on.
Mark Group, which had been appointed in the 2012 Agreement to provide the ongoing operations and maintenance of the Solar PV installations entered into administration in September 2015 meaning this cost was met solely by Aberdeen City Council.
Our Generation have now taken over the ownership of the PV Installations and took over the responsibility for the operation and maintenance of the systems in Spring 2016 by appointing Effective Energy.
The authority is investigating if it can recoup these losses from the now dissolved company, which is currently under the responsibility of Deloitte which is acting as the administrator.
However, it is likely to be just one customer of Mark Group to be undertaking this procedure after the latest update from Deloitte showed that previous employees of the company had advised the firm that work carried out by the defunct installer “was not performed to the agreed standard”.
It adds that these customers were having to carry out rectification work and may therefore have valid unsecured claims against the company.
Aberdeen City Council’s audit committee is due to meet tomorrow to discuss the issue.