Regulator recommends changes for Australia’s rooftop solar sector

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Australia’s Clean Energy Regulator (CER) has recommended changes to the federal government’s Small-scale Renewable Energy Scheme (SRES) in a bid to better protect consumers and improve integrity and accountability in the rooftop solar PV sector.

The recommendations are included in the Integrity Review of the Rooftop Solar PV Sector published on Thursday. The review was announced by the federal government in August 2020 following reports of consumer issues, defective installations, misuse of installer accreditation details, and safety and quality concerns in the sector.

While the CER noted in its review that the Australian rooftop solar industry is “strong with most participants doing the right thing” the final report identified changes which could be made to the current SRES regulatory framework “to better manage quality, safety and compliance risks more effectively”.

“The reforms will help safeguard those businesses currently providing quality services and products by focussing on removing unscrupulous operators from the market,” the CER said.

The report sets out 13 recommendations, including implementing new reporting requirements for installers, solar retailers and manufacturers, and giving the CER more effective powers to monitor and enforce compliance, including the ability to suspend installers, disqualify retailers and de-list components.

It also recommends giving the CER the sole responsibility for setting the eligibility requirements for, and oversee the operation of, installer accreditation schemes and the listing of approved solar components.

Change is coming

This means a significant change in the role of the Clean Energy Council (CEC), which currently has a co-regulatory role in the SRES with the CER, as the legislation relies on the CEC-developed and administered installer accreditation scheme and guidelines, and component approval and listing process.

The CER found the existing arrangement has “the potential to lead to role confusion” and recommends all enforcement be undertaken by the Regulator. The CER said this would still allow for an industry body or bodies to administer installer accreditation and component listing, with accountability to the Regulator.

The CER highlighted that the CEC has “undertaken its regulatory roles diligently” but said it is difficult for the CEC to undertake enforcement against accredited installers and component manufacturers when it doesn’t have the statutory investigation powers of a Commonwealth Regulator.

“As its primary role is as an industry representative body, it doesn’t have all the investigative, intelligence and in-house litigation capability of a regulator,” the CER said.

“There may be the perception of a conflict of interest with an industry body trying to take enforcement action against parties who may be its members.

“A single regulator with the typical statutory powers and capability of a Commonwealth Regulator will be a stronger deterrent to non-compliant behaviour and enable more effective enforcement.”

Other recommendations listed in the final report include increased sampling and testing of solar PV technology; for the installer to prove they were onsite during the installation of the rooftop solar PV system; and that retailers provide written verification the system will perform to the quote provided and that it is complete, connected and generating.

Government support

The federal government has welcomed the CER’s recommendations with energy minister Angus Taylor confirming $19.2 million has been allocated in the 2021–22 Budget to implement the SRES reforms.

Taylor said the regulatory arrangements recommended through the review will help ensure that rooftop solar PV systems installed under the SRES are consistent with the value of the incentive paid under the scheme and with consumers’ expectations.

“The recommended reforms will also ensure that any solar installers, retailers and manufacturers who are found to be doing the wrong thing can be held to account,” he said.

The CEC has also provided its backing for the reforms with chief executive Kane Thornton saying it is “appropriate to continually reflect and improve the regulatory framework to ensure industry integrity and proper oversight”.

“We welcome the greater role for the CER to leverage the compliance and enforcement tools of a Commonwealth agency to crack down on the worst behaviours in the industry,” he said.

“A more active approach to regulation and compliance from the Commonwealth Government is a good step forward and the industry looks forward to working closely with the CER to refine the regulatory framework for the sector,” he said.

Thornton did highlight that the solar industry has already begun acting on a number of the recommendations, including the requirement for installers to be on-site during installations, increased training and awareness about the expectations on installers.

“The Clean Energy Council is committed to continually raising the bar, improving standards and driving the few dodgy players out of the industry,” he said.

“This includes advocating for further regulatory reform such as cracking down on phoenixing in the solar industry, creating a national electrical safety body and the introduction of nationally consistent inspection regimes.”

Smart Energy Council chief executive John Grimes also welcomed the CER’s recommendations.

“The Smart Energy Council has long called for a single regulator for the Australian Government’s solar scheme. We totally support that recommendation,” he said.

“The Smart Energy Council also welcomes proposals for increased sampling and testing of solar PV components and increased accountability for solar retailers.”

The government said it will now consult on the regulatory changes to the SRES framework in the second half of 2021. This consultation will inform the final detail and implementation of the reforms.

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