In 2007, the European Council agreed a new Energy Policy for the EU. One of the policies was to ensure that 20% of the EU's overall energy needs are met by renewable sources by 2020.
In 2009, the EU agreed a package of legislation to implement the new energy policy. This package of legislation is known as the Climate Change and Energy Package or the "20-20-20 package", and includes the Renewable Energy Directive 2009.
The Conservatives say that they are aware that British families and businesses are ‘at the mercy of fluctuating energy prices’ and so the government seeks to secure for itself what for decades energy company’s had for themselves – control over how energy is sourced and priced, how information about energy is supplied to consumers and, importantly, it has the right to define, through the law, how energy companies and consumers interact.
A Conservative government seems to intimate a progression towards harmonising the UK better with the requirements of the Directive. However, affordable energy, generated by renewable energy sources, such as Solar, Hydro-Power and Bio-Fuel has been in vogue for some time already. With electricity being produced from sources like Solar Panels, Wind Turbines and Bio Sources, consumers already have various alternatives to power station supply available to them.
Such energy sources have been available to consumers for a number of years but relationships between, in particular, green energy companies and consumers and competition between ‘green’ companies in the renewable energy sector has only relatively recently brought the sector into the spotlight. The sophistications of marketing and selling the technology associated with producing renewable energy and the challenges of the industry’s regulation has brought to the surface problems for both consumers and renewable energy companies alike.
We believe these difficulties could have been resolvable within the current legislative framework – as in need of improvement as it is - with the right legal approach.
Do consumers really understand how renewable energy technologies can work for them from the information they have been given at point of sale? Do they really appreciate how their investment in renewable technology is supposed to produce for them returns and do they know how to seek effective legal redress if their consumer rights are infringed?
Similarly, do renewable energy companies know just how the requirements of domestic consumer legislation affect the way that things such as their marketing methods, their standard documentation, the information they give to consumers, their competitive practices in the marketplace and their statutory and contractual obligations towards customers will be seen if a dispute arises?
There is a whole raft of consumer protection legislation out there. The Unfair Contract Terms Act 1977, the Consumer Protection from Unfair Trading Regulations 2008, the Consumer Credit Act 1974 and the Consumer Contracts Information Cancellation and Additional Charges Regulations 2013 are but a few examples designed to protect consumers from, amongst other things the following:
There are both civil and criminal penalties being risked by businesses for failing to comply with some of the legislation. So knowing your rights as a consumer could mean the difference between being stuck with a renewable energy product which does not meet with your expectations and getting the right redress for the problem at hand.
There are those who regulate the activities of energy companies like Ofgem – whose role is to ensure that energy companies comply with relevant legislation.
Although its role is, in part, to carry out investigations into company behaviour and it does have enforcement powers, it will often be the case that a consumer’s priority – in most cases to pursue immediate financial redress or the reversal of a contractual relationship with a renewable energy company – may not be met immediately or at all by instigating an investigation through the regulator. Consequently, the consumer’s desired outcome may not always be realised.
Additionally, it is worth appreciating the dynamic - which sometimes exists- between renewable energy companies (‘members’) and their regulators. Often renewable energy companies subscribe to voluntary, contractual, regulatory relationships between them and independent non-governmental regulators who design their own codes of practice.
The design of the contractual relationship between regulators such as the RECC and their members is such that the contractual codes which govern members’ selling behaviours are supposed to be there for the overriding benefit of consumers.
This is not necessarily achieved in every case though. Our experience has shown that economic factors, outdated codes of conduct, a lack of understanding of how consumer legislation is supposed to operate in practice and an unfamiliarity with the structure of a particular renewable energy sector can cause regulators’ codes to have a reduced impact.
Large scale disharmony between regulators and renewable energy companies can only serve to bring down the standard of the consumer experience in the long-term. So, as valuable as regulators are, it can often be helpful to turn to legal advice rather than to a regulator if you want a quick fix to a consumer problem.
Pinney Talfourd Solicitors has advised both consumers wishing to take action against renewable energy companies and renewable energy businesses requiring both pro-active and re-active legal input for the purposes of remaining compliant with consumer protection legislation and defending against regulators’ actions against them.
If you would like to have a consultation with one of our dedicated commercial lawyers to discuss any aspects of a renewable energy or consumer enquiry, then do not hesitate to contact us on 01708 229 444 - it could affect how ‘energised you (eventually) feel’ .
Visit our Commercial Litigation webpage to find out more about our services.
This article is only intended to provide a general summary and does not constitute legal advice. Specific legal advice should be taken on each individual matter. This article is based on the law as at May 2015.