The ACCC Is Fighting Battery Cowboys Backwards

Last week the Australian Competition and Consumer Commission (ACCC) published a 114 page report on the electricity market which uncovered the following insights:

• People bought lots of batteries after the battery rebate came out
• People with batteries have lower bills than people without
• People on VPPs have even lower bills.

And revealed the following problems:

• Complaints about dodgy battery sales and installs went through the roof after the rebate
• VPPs are not taking off like the industry had hoped because folks are reluctant to give up control of their battery
• VPPs are hard to understand and compare, and some consumers are getting dodgy deals.

I hate to think how much money and effort was spent writing that report – but 5 minutes with anyone sensible in the industry could have provided those insights for free.

This week I’ll discuss the first problem identified by our bureaucratic super sleuths – the dud installs – because the diagnosis was never the hard part. The prescription is, and that is where the ACCC has got it wrong.

The ACCC’s Plan For Dodgy Battery Installs

The ACCC wants a mandatory code of conduct for battery sellers offering the rebate, built on the NETCC solar + battery code it already sanctions. Then the same again for VPPs.

Think that’s enough paperwork? Oh no… There’s another wad of rules proposed that all battery sellers offering the rebate must sign in blood – called a ‘consumer duty’.

Finally the energy ombudsman schemes – which currently only cover electricity retailers and networks will be stretched to drag in the battery installers and sellers too. In other words, they propose that installers, good, bad and ugly, will have to pay for yet more memberships – potentially 3 different bastard-sons-of-NETCC, then a ‘consumer duty’ promising to put the consumers’ best interests first and finally membership of an ombudsman in every state or territory they operate in.

Every piece of paper waits for the rules to be broken, the harm to happen and tries to put out the fire afterwards, once the customer has already been burned.

The ACCC report highlighted a 107% increase in consumer reports about consumer energy resources over the past 12 months.

The Problem With The Code Of Conduct

Before we get to the fix, look hard at the tool the ACCC leans on right now to keep solar sellers honest: the New Energy Tech Consumer Code (NETCC), the solar+battery code, administered by the Clean Energy Council. The ACCC assessed it as part of the 114 pages, and its own verdict is savage. This is what an industry-run code looks like once it meets the real world:

• It is voluntary unless tied to a state rebate or other scheme.
• The audits are questionnaires.
• A customer with a complaint gets no recourse to independent external dispute resolution through the code, and no right to appeal the administrator’s decision.
• Most breaches stay secret. Anything short of suspension or expulsion is never made public.
• Signatories can resign while they are under investigation. The code’s ultimate sanction is being thrown out of the club, but the operator about to be thrown out can quit first.

The Problem With The Ombudsman

Right now the ombudsman gets sold as the backstop if sellers breach a code of conduct or the proposed duty-of-care, but the report’s own case studies show it often cannot touch the problem. State schemes like EWOV in Victoria and EWON in New South Wales only have power over electricity retailers and distributors. When the fault sits with the installer or the seller, which is where most of the harm starts, they have no jurisdiction, and the customer gets sent sideways to a fair trading office or a tribunal that warns of a year-long wait.

To its credit, the ACCC wants to close that gap. It proposes new laws to compel battery sellers and installers to join the ombudsman schemes, the same way retailers already must. Fair enough as far as it goes. But look at what it actually is: a plan to make every seller and installer pay into a bigger complaints machine that still only starts working after the customer has been stung, and will only be used by the misbehaving few, mostly paid for by the well-behaved majority.

The Problem With The ACCC And Vetting

It is worth being precise about why the ACCC reaches for codes and duties. It is a competition and consumer law regulator. It does not run licensing schemes or hold a register it can strike people off. Vetting installers is licensing, and that sits with the Clean Energy Regulator, the state electrical licensers, and the National Technical Regulator now being established. Codes and duties are the only tools in its shed.

The trouble is that the body that could vet is standing right there, handing out the money.

Every one of the rebates flows through the Clean Energy Regulator, via the STC mechanism.

Make access to the money conditional on being good. Vet the installer before they get near a switchboard, and most downstream problems go away. When a bad ‘un gets through the Ombudsman needs to share the info back to the regulator so they can continuously improve their vetting.

NETCC RIP?

To be fair, the ACCC is not proposing to copy the NETCC shambles. Its mandatory code would have to fix every leak in the NETCC: an independent administrator in place of the industry body, external dispute resolution, public reporting of breaches and resignations, periodic independent reviews. On paper, a proper watchdog.

But in reality it’s a whole new institution to design, staff and fund.

Vet at the gate and most of it becomes unnecessary. You don’t need a rulebook telling the survivors not to be cowboys. So bin the codes and keep one thing.

A Simple Customer Duty Of Care Could Work

What you keep is the consumer duty. A duty is a single obligation: act in the customer’s best interest. You are judged on whether they ended up with a fair outcome, not on whether you ticked every box.

The ACCC’s version is described as a duty underpinned by supporting principles, with guardrails, designed and distributed in a consumer-centric way. That is a sentence that needs its own consumer duty cuz I sure don’t understand what it means. I suspect it will end up being a really long document that no one reads and everyone signs.

I propose one-pagers. One page each for solar, batteries and VPPs, in plain enough terms that a customer can hold the installer to every line, and so everyone is on a level playing field when quoting. It is what every good installer or salesperson knows they should do – but in the heat of the sale can forget or skip – especially if you know you are up against someone that will skip all these and wing it on the day of install.

Here is a battery one off the top of my head:

The Battery Installer’s Duty Of Care

Do right by the customer. On a battery job, that means:

1. Do a site visit before you quote. No exceptions.
2. Agree the mission first: self-consumption, energy trading, blackout prevention or all three. Everything else follows from that.
3. Talk through tariffs and VPPs so they understand the options.
4. Confirm the system design and hardware supports the tariff or VPP they choose, before you quote it.
5. Match the battery to the solar array. Only pair a small array with a big battery if the strategy is charging from cheap or free grid power.
6. Account for the main breaker. Quote to upgrade it, or add dynamic load control, if the load needs it.
7. Explain how backup works, and be honest about what it will not run.
8. Raise EV charging. Agree how an existing or new EV charger will work with the battery.
9. Factor in temperature. A battery baking in the afternoon sun is a battery that dies young. A battery without a heater in the cold is bad news.
10. Agree the battery location before quoting.
11. Consider any dynamic or fixed export limits the DNSP imposes, so it can maximise ToU feed-in rates – if that’s a use case.
12. Commission it properly. Complete the checklist, share it with the customer, walk them through the app before you leave, and stay reachable after the install.

Not dozens of pages. No detailed explanation of how to do each step – because the good guys don’t need to be hand held. No stupid pyramid diagrams. A sparky and salesperson can work to it, a customer can ask whether each line was done, and a regulator can enforce the spirit of it without a flowchart.

The Catch

Proper vetting is not free. Fewer accredited installers, higher prices, upset rejected battery retailers.

But a rebate that pays for dud installs, then asks the taxpayer to pay again to adjudicate the complaints, is worse in my opinion. Gatekeeping has a body count. So does letting the cowboys in.

Disclosure: I founded SolarQuotes and its core product is vetting installers. So “just vet them” is a conclusion I am rather fond of, because it works. If it didn’t, I’d have been bankrupted by the Good Installer Guarantee many years before I sold to Origin.

Phase Shift is a weekly opinion column by SolarQuotes founder Finn Peacock. Subscribe to SolarQuotes’ free newsletter to get it emailed to your inbox each week along with our other home electrification coverage.