The Clean Energy Council (CEC) has recently developed a code of conduct aimed at regulating and upholding the standards of the solar photovoltaic (PV) retail industry in Australia. The CEC's decisions to develop the code is not surprising given the increasing demand for solar PV in the commercial sector on the back of the push towards the renewable energy target of 20% by 2020. The proposed code will set standards for retail marketing and the sale of solar PV products.
The code is pointed squarely at concerns regarding potential misleading claims by PV retailers about the performance of PV systems, which can land both customers and PV retailers in courts or tribunals. In particular, some of the recent cases in the Consumer, Trader and Tenancy Tribunal in New South Wales have given rise to generous damages awards, to customers whose PV systems performed below expectations and resulted in a loss of revenue when excess energy is fed back into the grid.
The code will not replace or amend existing energy related legislation or regulations, but rather it will work in conjunction with the existing framework to improve the customer experience and increase retailer accountability in the solar PV industry. One of the main intentions of the code is to prevent customers being misled and so increase the desirability of energy efficient products.
A summary of the key issues the code is likely to address includes:
- Misleading and deceptive conduct arising from claims by PV retailers about the performance of their systems;
- Misrepresentations about the size or suitability of PV systems, and the value of currently available government incentives;
- Instances where the PV retailer does not take responsibility for the whole of the PV system, such as responsibility for product warranties, including those under the Australian Consumer Law; and
- Instances where the PV retailer does not take responsibility for subcontractors acting on their behalf.
PV retailers will be able to voluntarily sign up to the code, after which they will be bound the code's obligations. The penalties for minor breaches of the code are slight, but wilful and repeated breaches can potentially lead to a signatory's expulsion.
Perhaps the biggest incentive for solar PV retailers to voluntarily sign up to the code will be the brandmark that all signatories will be able to use in marketing their products. It is anticipated that consumer confidence in products bearing the brandmark will be higher than those without a code approved brandmark.
When will it come into force?
The CEC has already obtained a commitment from a significant number of solar PV retailers to sign up to the code if it is approved by the Australian Competition and Consumer Commission (ACCC). Subscription to the proposed code will be voluntary and if the ACCC favours the code then CEC will start the process of inviting solar PV retailers to sign up. All signatories to the code will be required to comply with the code and subject to the enforcement regime which includes sanctions for breaching the code or consumer protection laws.
Next steps for PV retailers interested in signing up to the proposed code
Given the potential advantages to being a signatory to the code, PV retailers should review the current draft proposed code, available on the ACCC website, to establish whether or not they are likely to meet the identified compliance criteria, particularly with reference to claims about PV system performance.
Furthermore, before becoming a signatory, PV retailers should also consider whether they have adequate protection against sub-standard installation work or system components supplied by subcontractors, including seeking contractual indemnities where necessary.
PV retailers wishing to align with best practices in preparation for the new code will need to review their standard contract terms and their marketing practices, to ensure misrepresentations are not being made to customers about the performance capabilities of PV systems.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.