Ofgem has confirmed that embattled energy firm Solarplicity will fold, following allegations of poor customer service and the sale of most of its retail customer base.
The renewable supplier had around 7,500 domestic and 500 business energy customers, after selling the bulk of its domestic customers - 43,000 accounts - to competitor Toto Energy in July.
Remaining Solarplicity customers will be transferred to a new firm appointed by Ofgem through the regulator’s Supplier of Last Resort process. Customers will be contacted by the new firm, when it is appointed in the next few days, and their credit balances will be protected. But they’re urged not to switch away from Solarplicity until the process is complete.
Solarplicity joins a dozen other energy suppliers which have gone bust since the start of 2018, including Extra Energy and Brilliant Energy. In June a report from Citizens Advice revealed that collapsed firms have left £172 million in unpaid industry bills, which will now be shouldered by consumers.
Solarplicity chief executive David Elbourne attributed the failure of the company to an “overcrowded, highly regulated market” and to Ofgem’s “overly onerous interventions.”
But Solarplicity had previously been criticised by both the regulator and its customers for poor customer service. Ofgem had banned the firm for taking on new customers following consumer complaints, which included difficulties with switching.
The firm was ranked last out of 30 suppliers in Which? magazine’s annual customer satisfaction survey, published in January, and regularly came in on the bottom rungs of Citizen Advice’s customer service league tables.
The Energy Ombudsman confirmed that it had received “high complaint volumes for a company of [Solarplicity’s] size”, including 3,324 complaints this year and 538 just in July. Complaints had been rising too, up from 1,000 over the whole of last year.
Matthew Vickers, chief executive of Ombudsman Services, said the collapse was unsurprising given the growing volume of complaints.
Additionally, Ofgem had hit out at the supplier for failing to pay money owed to feed-in-tariff (FIT) generators and said it was at risk of having its licence revoked.
Elbourne said that while the company was withdrawing from the retail energy market, it would focus on its activities in the solar panel business.
Following a string of failures of energy suppliers, Ofgem introduced tough new licensing requirements for new market entrants. But Citizens Advice has called for existing suppliers to also be subject to reviews, to ensure they’re treating customers appropriately and not at risk of failures which drive up everyone’s energy bills.
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