Ofgem launches investigation into social housing solar panel scheme
Ofgem has launched an investigation into whether a scheme to install solar panels on the roofs of council homes in the Midlands breached consumer protection laws.
The energy regulator is probing sales and customer service practices at Community Energy Scheme UK Limited.
Community Energy Scheme UK Limited entered into an arrangement with Stoke-on-Trent City Council in 2018, badged the Community Energy Scheme.
Under the agreement, photovoltaic panels are installed on homes owned by the council, with the electricity generated sold to tenants on a 25-year contract.
More than 5,000 of Stoke’s 17,000 council homes have had solar panels installed through the Community Energy Scheme since 2018.
The local authority previously announced it would be inspecting the installations after spot checks found faults with 40 out of 48 homes.
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Ofgem is considering potential breaches of the Consumer Protection from Unfair Trading Regulations 2008 and the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013.
The watchdog did not specify the basis for its concerns.
Solarplicity UK, the renewable energy provider, established Community Energy Scheme UK in 2017 under a different name. Solarplicity went bust in summer 2019 amid a deluge of complaints to the energy ombudsman.
In 2017, Solarplicity told Inside Housing it was seeking to raise revenue by selling energy to residents and landlords in a bid to end its dependence on government subsidies.
It predicted average annual savings of £240 for households using its product.
At the time, more than 70 housing associations and councils were in discussion with Solarplicity about participating in the scheme.
Ofgem said the opening of its investigation does not imply that it has made findings about non-compliance.
Community Energy Scheme UK Limited’s accounts for 2019/20 are nearly five months overdue, according to a note on Companies House.
The company is now majority owned by ABN Amro, the Dutch bank that announced a £160m investment in Solarplicity in 2017.
The Community Energy Scheme and Stoke-on-Trent City Council have been approached for comment.
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