Warnings over solar power deals

Growing numbers of New Zealand households are striking problems with solar power systems, and Utilities Disputes says there should be more consumer protections for them.

Utilities Disputes deals with complaints that cannot be resolved between providers and consumers. It says in four years complaints about solar have increased from 58 in 2022/23 to about 830 this year.

Utilities Disputes Commissioner Neil Mallon said there was a pattern of consumers feeling let down, particularly in situations where they had taken a solar subscription such as from SolarZero.

“The most common issues involve customer service failures, billing problems, and most concerning, marketing complaints where promised savings have not been delivered.”

Utilities Disputes data shows that 86 percent of solar marketing complaints relate to a failure to “realise promised returns, while 68 percent of solar complaints involve customer service issues such as companies failing to act as agreed”.

The scheme’s most recent annual report showed a fifth of complaints were about in-liquidation SolarZero, even though it only had market share of 0.5 percent.

Mallon told Nine To Noon there could be complications from subscription models, such as SolarZero’s.

“What a customer is doing, and in some ways it’s the real benefit of it, is they’re avoiding shelling out the capital cost to put solar on your roof, which is around $20,000 or more. But there’s a trade off with that. You’re signing up to a long-term agreement where that company owns that equipment, but they also own the electricity that’s generated and they sell it to you.

“And there is consequences for you when you put solar on your roof, you’ll lose your roof warranty… And if you want to get out of it early, how much it’s going to cost you to get out of that contract at certain times, and it’s a lot of money.

“But there’s also other things that are ubiquitous across solar.

“You need to know before you sign up for any sort of big purchase, and this is another way of doing a big purchase, is it right for you? Is it right for your home? And what kind of returns are you going to get? You’ve got to be clear how much savings you’re going to get.

“But also, do you have to stick with another retailer for getting electricity from the grid? And has there been price promise guarantees as part of that contract? And are they going to last for the lifetime of the contract? Or are they going to go up as electricity goes up?”

He said Utilities Disputes was not against solar or subscription solar models. “What we’re saying is it’s another form of selling electricity and it has a whole lot of complexities added to it as well.”

He said there was a gap in consumer protection, and more needed to be done.

“We want to come back to simple standards that can be put in place to make sure customers have informed choices, that they’re protected and they have guardrails around traditional complaints we see in other forms of electricity around marketing, billing, disconnection… those things are in the mix, too.

“Western Australia has already put standards like that into place, they’ve worked on this for the last year or so, they’ve grappled with the issue of supply and selling electricity to customers and they have got coming into place from early 2027, really good effective requirements for companies that are selling solar electricity and Solar Zero’s sort of model around marketing, around billing, around hardship, around disconnection. It’s really aimed at making sure customers are informed of the benefits as well as the risks.”

He said it was unusual for him to comment on ongoing complaints but his role also required him to try to remove issues from the system. “So that’s why I’m talking about SolarZero.

“Solar is a great technology, but the sales and service experience is not meeting the standard consumers have a right to expect,” Mallon said.

“Too many people are entering into long-term financial commitments without fully understanding the costs, the risks, or what happens if things go wrong.

“We are now at a tipping point for solar. With so many consumers now investigating a switch to solar, it’s never been more important for people to understand what they are buying and for providers to be upfront with their marketing.”

He said people should access guidance from organisations such as EECA and SEANZ before making a decision, review their current electricity plan and usage to understand their needs, scrutinise any assumptions being made about the savings available, ask what would happen if they switched retailer, and find out about the termination conditions for any subscription agreement.

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