The new industry regulator, the Financial Conduct Authority, should help the renewables sector boost credit sales, according to point of sale lender Consumer Credit Solutions.

Following the closure of the Office for Fair Trading (OFT) on 31 March, some solar installers who offer credit have expressed concern over the switch to the Financial Conduct Authority (FCA). Consumer Credit Solutions believes that the new rules and regulations coupled with a time-consuming application process have left installers anxious about the change.

Andy Wallace, managing partner of Consumer Credit Solutions, explained: “Installers are unsure about what compliance will mean for their businesses, as to whether it will be a drain on resources and, of course, what penalties there will be for getting it wrong. It’s my personal belief that if you have business that puts the interests of the customer first and plays by the rules then you should have little to fear from the FCA.”

Wallace is concerned that the level of work involved in becoming compliant is putting some smaller businesses off. In particular, the application process requires companies to provide a business plan, cash flow forecasts, profit and loss forecasts, in addition to information about credit products and promotional materials. Companies are also required to conduct a ‘treating customers fairly’ audit, work out a complaints handling procedures and keep training records for sales staff. Wallace added: “I know smaller installers in particular are concerned about the amount of work involved, but the benefits of being able to offer credit, in my opinion, far outweigh the negatives.”

Wallace concluded: “Availability of finance for consumers has been a real game changer for the renewables sector. In the early days of solar, customers typically used their savings to invest in panels, with the understanding that attractive feed-in tariffs would generate an income. It’s fair to say, that all of this ‘low hanging fruit’ has gone to a large extent. It’s become virtually a business imperative for installers to be able to offer customers competitive, monthly finance options to help facilitate purchases. It gives people the ability to invest in renewable energy products that would otherwise not have the opportunity.”