Investigation into Community Energy Scheme UK Ltd and Community Energy Scheme Stoke Ltd's compliance with consumer protection legislation

Investigation
  • Open
  • Decision proposed
  • Closed

Publication date

Company

Community Energy Scheme UK Ltd Community Energy Scheme Stoke Limited

Industry sector

Supply and Retail Market

On 20 August 2021, Ofgem announced the opening of the investigation to consider whether Community Energy Scheme UK Ltd (CES) has contravened consumer protection legislation through its sales and customer service practices. 

CES operates the Community Energy Scheme (the “Scheme”) whereby it installs solar photovoltaic (PV) panels on the roofs of social housing in Stoke-on-Trent and sells the electricity from these panels to the tenants. 

In December 2022, the scope of the investigation was widened to include Community Energy Scheme Stoke Limited (‘CESS’), another legal entity contracting with consumers.

After a thorough examination of relevant law, and the evidence gathered during the investigation, Ofgem has used the powers that were available to the Authority to tackle current concerns related to the Scheme.

As a result, following Ofgem’s investigation, CES and CESS have offered to implement actions that we consider will address key concerns regarding sales practices conducted up to September 2019. CES and CESS have also agreed to amend existing and new contracts signed by consumers, adding a termination clause which will allow consumers to leave the Scheme at any time (by paying a termination fee calculated on the characteristics of the Solar PV system installed and whose amount reduces for each of the remaining years of the contract). CES and CESS have also amended their bill format to provide clear information to consumers about charges applied and whether charges are estimated.

The offered actions will remedy key concerns identified during the investigation and will ensure contracts signed by consumers reflect legal requirements. Therefore, Ofgem has decided to accept them.

Based on the agreed actions: 

  1. Some consumers that have signed up to the Community Energy Scheme prior to 30 September 2019 will have a one-off opportunity to leave the Scheme for free. These consumers will receive a letter from CES/CESS within 30 days of this announcement, i.e. by 27 November 2023, and will have to decide if they want to leave the Scheme.



    a) If they decide to leave the Scheme, they will have 90 days to communicate their decision to CES/CESS. They will then have 150 days to contact CES/CESS and agree an appointment to allow CES/CESS to re-configure the Solar PV system. Consumers will also have to pay or agree a payment plan for any outstanding bill for solar electricity they have consumed.



    b) If these consumers decide they want to remain part of the Scheme, they will have their contract amended to include a new termination clause. CES/CESS considers that the easiest and best way to achieve this result would be for consumers to sign up a revised contract which will include the new termination clause. However, CES/CESS have also agreed that if consumers remain part of the Scheme but do not sign the revised contract, their existing contract will still be considered amended to include the new termination clause. 

     
  2. Consumers that have signed up to the Scheme after September 2019 will receive a letter within 30 days of this announcement, i.e. by 27 November 2023, with the effect to amend their contract to include a new termination clause. The letter will ask them to sign up a revised contract that includes the new termination clause. However, if consumers do not sign the revised contract, their existing contract will still be considered amended to include the new termination clause. 

     
  3. CES and CESS have amended the bill format of monthly, quarterly and final bills with the aim of providing clear information on whether the bill is an estimated or actual bill, what the charges are, and the amount owed or in credit. These changes were introduced fully in September 2023. CES and CESS will also continue working to ensure monthly and quarterly bills are issued regularly. 

Given the circumstances of the case, Ofgem considers that these actions will have the effect of achieving a similar outcome to that the Authority may obtain by exercising its enforcement powers to seek a court order or formal undertakings. Therefore, Ofgem has decided to accept the offered actions. The case will remaining open for the sole purpose of monitoring implementation of the agreed actions and, when these are completed, the case will be formally closed. 

Share the page