Consumer NZ chief executive Jon Duffy is urging the Government to get on top of a “looming problem” with providers of solar equipment not required to join the Energy Complaints Scheme – a backstop for consumers who can’t resolve their grievances with their energy providers.
The scheme, run by independent Crown entity Utilities Disputes, requires Transpower, all distributors and retailers of electricity and gas to join but it is not mandatory for businesses that sell or lease solar photovoltaic equipment to be members.
Duffy said it left consumers exposed.
“Where you’ve got an existing relationship with a retailer, that’s a long-term thing, so they have less of a commercial incentive to put you into solar when it’s not suitable for your property, rather than an independent who may just be looking to make a sale.
“Now, I’m not bad mouthing the whole industry but there is a tension there, and to leave that higher risk side of the market with no recourse other than the general law, seems like it could be a growing problem.”
Consumer Advocacy Council chair Deborah Hart recently met with Utilities Disputes to discuss the issue and said it was another example of technology moving too fast for the existing regulations.
“As new energy systems increase and consumers generate their own electricity – including to sell onto the grid or to other consumers – we need really good consumer protections in place.
“Requiring membership of [the Energy Complaints Scheme] is a way of future-proofing the system.”
She said solar, and other alternative energy systems, were moving “at pace” and consumers needed to be at the centre of any policy work undertaken.
Electricity Authority figures show more than 35,000 residential households now have solar power and that number is growing, with close to 600 new installs each month.
A Transpower study forecast this could increase to 1.3 million households by 2050.
Utilities Disputes Commissioner Mary Olliver said the entity was regularly contacted by consumers who had concerns about solar providers.
“UDL is only able to consider these complaints if the company that sold and installed the solar is sufficiently connected to the provision of traditional energy services (such as retail, distribution, and transmission services) … many inquiries UDL receives relate to solar companies that are outside of our jurisdiction,” she said.
“It is disappointing when we see energy issues and cannot assist. Over the past two years we have met with the Government to discuss this potential gap for consumers, and we are aware they are considering options to address the situation. This includes not just solar but all new energy sources.”
A number of providers not affiliated with energy retailers are members of the industry group Sustainable Electricity Association of New Zealand (SEANZ), and Olliver said a number of complaints, which Utilities Disputes cannot assist with, were referred to it.
Association chair Brendan Winitana said it was in the industry’s best interests to have a system with integrity and he described the in-house complaints system as “robust”.
“The whole purpose of the industry group is to ensure integrity of the industry and ensuring the consumer is protected.”
He said 95 percent of the complaints that came through were resolved by the group and members faced strong repercussions if they had acted poorly.
“We have a really high standard and we can reprimand by kicking them out of this group, which cuts off access to resources, including technical and legal advice as well as access to government and local government contracts.”
Winitana said companies had to meet a high threshold to even become a member and it was not just a case of “filling out an application form”.
Winitana said the association was committed to keeping “cowboys” out of the New Zealand market and were happy to work with Utilities Disputes, but mandating membership was not necessary given the systems already in place and the relatively low number of complaints.
“We’re talking in the tens not the hundreds or thousands and it’s mostly those outside the SEANZ membership [which] are the ones getting complained about.”
Commerce and Consumer Affairs Minister David Clark said any changes to the jurisdiction of the Energy Complaints Scheme would require a law change.
“Officials advise me they’re aware of complaints related to solar that UDL have raised and continue to monitor trends of solar complaints and in particular whether the complaints fall under the Fair Trading Act and/or Consumer Guarantees Act.”
“Further thinking would be needed in this area before moving to make any changes to this aspect of current legislation.”
Clark said the Electricity Industry Amendment Bill, which is currently going through parliament did provide for the Electricity Authority “to protect the interests of domestic consumers and small business consumers in relation to the supply of electricity to those consumers.”
“This additional objective applies to the Authority’s activities in relation to the dealings of industry participants with domestic consumers and small business consumers.”
He also referred to the Consumer Advocacy Council which was recently created to be an independent advocate for residential and small business electricity consumers.
“These are both part of government’s response to recommendations from the Electricity Price Review relating to strengthening the consumer voice.”
Clark said, with regard to future-proofing other energy types, there would be consumer protection considerations.
“MBIE is progressing work to develop a Hydrogen Roadmap to set Government objectives for the future of a hydrogen economy in New Zealand… The roadmap is in an early scoping stage, but will be developed alongside the Energy Strategy and is likely to consider any effects that the development of hydrogen may have on consumers.”