Consumer confusion: solar claims under the microscope

Ever since the feed-in tariff rate was axed in half from 43p to 21p the industry has been plagued by chronic confusion in the marketplace. Legal wranglings, deadlines, extensions; it was hard enough to keep on top of market developments for solar companies, let alone customers.

The perceived loopholes and the seemingly never-ending string of consultations left the door open for a minority in the solar industry to start publishing unfounded claims, as customers flocked to take advantage of the higher FiT rate.

The grey area left between the High Court victory and the Supreme Court’s ruling saw some companies erroneously guaranteeing the higher feed-in tariff rate of 43.3p before it was officially confirmed.

Now that the turbulent times of FiT reviews and legal challenges are behind us, solar companies are finally certain over the future. Customers on the other hand, have been left bewildered.

Mainstream media outlets were quick to react to industry lobbying that foretold the death of the British solar industry. Joe public was being told that solar was only a sensible investment with a high FiT rate; not that the lower FiT rate reflected the dramatically lower installation costs.

Even now, after the dust has settled, Government-backed energy advisor, the Energy Savings Trust, openly states on its website that: “Most domestic PV systems cost around £3,000 to £3,500 per kWp installed.”

Cleary, an impartial advisor promoting such a hopelessly out-of-touch figure as a consumer guideline is a major issue. Not only does such an inflated figure leave the door open for nefarious companies to justify exorbitant system prices, but it directly contributes to the ongoing confusion surrounding the solar market.

The choice to purchase a solar PV system is not one that is undertaken lightly. Normally, an interested consumer will undertake their own comprehensive research on such a high-involvement purchase.

A quick google reveals a number of solar firms urging me to act now in order to beat the looming August deadline, when a slashing of the FiT rate will render solar uneconomic. Companies espousing returns on investment ranging from 8 percent to 19 percent clamour for your attention, as promises of earning in excess of £1,000 FiT income per year flood the screen.

How does a consumer even begin to separate fact from fiction with so many conflicting claims, and what can reputable solar companies do to help?

First of all, solar companies need to work on being as transparent as possible.

One of the most misleading aspects of selling a solar system is the avoidance of mentioning that the inverter will most likely have to be replaced over the 20 year FiT lifetime of the system. Companies need to work harder to make consumers aware of inverters life-expectancy and advise accordingly.

Which? recommends that anyone interested in installing solar should obtain at least three separate quotes from solar installers. I understand that some companies will be nervous about actively encouraging interested customers to approach the competition but if you have confidence in your offering and unique selling points then customer retention should be high. The comparison of offers will help establish natural market rules that will not only benefit consumers but the future market environment too.

Another issue that is rife for misinterpretation is the calculation of system output figures. Output figures of PV systems are often quite an abstract notion to the consumer, who will not have the requisite knowledge to research the claims made by some companies. All quotes sent out to consumers should use SAP calculated figures (for all its flaws, it provides a level playing field for easy comparison). Allowing customers to compare and contrast system output figures is another vital step on the path to transparency.

Sue Bloomfield, Head of Monitoring at REAL, explained the challenges the industry watchdog faces in tackling misleading advertising: “Ensuring that companies do not make misleading claims in their advertising materials is one of the key requirements of the REAL Consumer Code. Monitoring a company’s advertising materials is standard procedure when we spot-check companies applying to join or when we audit a member company. If we find the material does not comply with the Code or is potentially misleading, we inform the company and ask them to change it.

“Members who repeatedly fail to comply can find themselves facing disciplinary action. We also liaise with agencies such as the Advertising Standards Authority (ASA) and Trading Standards, who investigate complaints about misleading adverts. REAL can refer adverts to these bodies if the company in questions is not a member of the REAL Consumer Code.”

Solar companies should work together to identify misleading advertising and reporting offending adverts directly to the REAL.

Obviously, we are talking about a very clear minority of solar companies that are engaging in these practices. Almost all customer satisfaction surveys of the UK solar industry point to an overwhelming majority of customers completely satisfied with their solar installs and how it was sold to them.

Hopefully, industry can work hard at dispelling the myths and confusion that continue to plague the marketplace and work together to encourage the 83 percent of the British public who support solar to invest in their own renewable power plants.