Victoria cracking down on “solar installer cowboys”

The Age published this article on 28 March 2021:

The state government is considering a ban on solar retailers selling door-to-door and cold calling customers to protect Victorians from predatory behaviour in the booming renewables industry.

Consumer and green energy groups have been calling for a ban for years amid concerns that deceptive and aggressive tactics are undermining confidence in the sector.

Maxwell Johansen paid $10,000 to have solar panels installed on his roof. The door to door salesperson told the pensioner he would never have to pay another electricity bill but the panels are only saving him $2.50 a week.
Maxwell Johansen paid $10,000 to have solar panels installed on his roof. The door to door salesperson told the pensioner he would never have to pay another electricity bill but the panels are only saving him $2.50 a week. CREDIT:JOE ARMAO

The move follows a Federal Court ruling this month that solar retailer Vic Solar engaged in misleading, unconscionable conduct after it told consumers they would never pay another energy bill.

Energy Minister Lily D’ambrosio said she was considering a ban on unsolicited door-to-door sales for retailers participating in the state’s multimillion-dollar Solar Homes Program, which helps fund eight of 10 solar installations in Victoria.

“Unsolicited door-to-door sales practices can be misleading, predatory and lead to poor outcomes for consumers,” Ms D’ambrosio said.

While the state government is set to introduce legislation to parliament in the middle of the year to ban unsolicited sales of electricity and gas, door-to-door sales of solar systems have largely escaped the scrutiny of lawmakers until now.

Consumer Action Law Centre policy director Katherine Temple said dodgy sales practices were eroding confidence in the sector and it was important that any ban applied to all solar retailers, not just those participating in the state government program.

She pointed out that Vic Solar was not part of the scheme.

“We need to clean it up,” she said. “We don’t want to leave any loopholes that unscrupulous providers could exploit.”

A paper to be released by the centre on Monday calls on the state government to ban the unsolicited selling of solar and says industry self-regulation has failed to protect consumers.

“We are seeing misleading conduct, poor quality panels, unaffordable finance arrangements and high-pressure sales tactics ,” Ms Temple said.

Maxwell Johansen paid $10,000 to have ineffective solar panels installed on his roof.
Maxwell Johansen paid $10,000 to have ineffective solar panels installed on his roof. CREDIT:JOE ARMAO

Moe pensioner Max Johansen opened his door in December 2018 to a Vic Solar salesman who had an offer that sounded too good to be true.

The 70-year-old was told he’d never pay another electricity bill if he installed their German-made panels on his roof.

“I fell for it,” he said.

Vic Solar connected Mr Johansen with a finance company and he took on a $10,000 loan to pay for 11 panels, which were installed in January 2019.

But Mr Johansen realised something was wrong when the installers left and he discovered boxes reading “Made in China” strewn across his yard.

His concerns deepened when he received an electricity bill a few weeks later. The solar panels had only reduced his bills by $5 a fortnight and he was paying an additional $70 per fortnight on loan repayments for his panels.

To make matters worse, Mr Johansen said his roof started leaking because the installers drilled holes in the wrong spots. “I’ve been left with solar panels that don’t work properly and they have ruined my roof,” he said.

Mr Johansen contacted Consumer Affairs Victoria and the watchdog interviewed him, along with other consumers who had similar experiences with Vic Solar. It then initiated legal action against Vic Solar and its 31-year-old director Sunny Srinivasan.

The Federal Court found that Vic Solar engaged in unconscionable, misleading and deceptive conduct by using third-party lead generators to knock on residents’ doors, promoting a false ‘community bulk-buy’ of solar systems and telling customers they would never receive another energy bill.

It distributed brochures bearing the Clean Energy Council logo, even though it had no affiliation with the organisation.

The court will determine a penalty at a later date and Mr Johansen’s debt has been wiped.

Retailers in the state government’s Solar Homes Program must be accredited by the Clean Energy Council. Vic Solar, which is now under administration, never applied for accreditation.

A Clean Energy Council spokeswoman said unscrupulous operators had sometimes “misrepresented their association” with the group.

John Grimes, chief executive of lobby group Smart Energy Council, said there had been a heavy focus on installers in the industry, but sales were not policed as vigorously.

“Every solar installation, before it’s connected to the grid, is inspected by a licensed electrician. And you have Solar Victoria doing random inspections. Solar retailers are not subject to the same controls – they are subject to consumer laws and fair trading requirements that any company trading in Australia is, and nothing more.”

“You and I could start a company selling solar panels tomorrow,” he said. Solar installers often arrived at a site not knowing what sales promises had been made by a retailer organising the installation and taking a cut of the price, Mr Grimes said.

More than 130,000 installations of household solar, solar hot water and batteries have occurred under the Solar Homes Program, which gives households a discount of up to 50 per cent of the cost of installing panels.

It has approved $250 million in rebates and is estimated to have reduced greenhouse gas emissions by more than one million tonnes.

Erin Turner, the campaigns director of consumer group Choice said door-to-door sales led to poor outcomes. “It’s a sales conversation that is forced upon you”.

Tristan Edis, an economist and director of power analysis firm Green Energy Markets, said larger installers generally met strict quality controls because otherwise “the law catches up with them. But some of the smaller guys can last for a period of time”.

He said there was an issue with “phoenixing” – when the directors of a company liquidate it and restart it under a different name.

Mr Edis said solar panels were “not a complex product”, and that the bigger problem was that the industry was highly incentivised to sell customers “the biggest system they can possibly install”, even if it was more than the customer needed.

Installing bigger systems often leads to companies getting bigger rebates.

Vic Solar’s director, Sunny Srinivasan, was also the director of a number of other “green” companies, including Eco Connect Solutions Pty Ltd and Clean Energy Co Australia Pty Ltd – both of whom were denied membership of the Clean Energy Council because of concerns about their businesses. The Age contacted Mr Srinivasan for comment but he did not respond.

While Mr Johansen’s largely ineffective solar panels have caused a lot of heartbreak, they have delivered one benefit: they deter solar salespeople from knocking on his door.

“They used to come a couple of times a month,” he said. “Now they look up and see them on the roof and don’t come in.”

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