Ofgem has threatened to revoke energy supplier Solarplicity’s license unless it pays money it owes to customers.
Small energy supplier Solarplicity, who have around 60,000 UK customers, have been ordered by Ofgem to pay the outstanding money they owe to Feed-in Tariff generators. The industry regulator has issued the firm with a provisional order while it investigates why payments haven’t been made.
Under the Feed-in Tariff (FiT) scheme, which was established in 2010, energy suppliers were required to pay owners of small-scale renewable energy generators such as solar panels, at a fixed rate per unit of electricity produced. The scheme ended in April this year, but Solarplicity has failed to pay what it owes. Ofgem has ordered the supplier to pay up by May 16, or face losing its operating licence.
“Not paying FiT generators will impact their finances and affect their viability, which is why we are taking swift action to ensure that Solarplicity makes the payments due,” said Anthony Pygram, director of conduct and enforcement at Ofgem. “Suppliers must comply with their obligations and if they do not, ultimately we can take steps to revoke their licence.”
This is the second time in recent months that Solarplicity has been issued with a provisional order by Ofgem. In February 2019, the small energy supplier was banned from taking on any new customers because of complaints about its switching process and its poor customer service. Solarplicity has stated its ‘disappointment’ over Ofgem’s latest ruling.
“Solarplicity has offered voluntary undertakings to Ofgem to assure Ofgem of continued compliance and has proposed additional arrangements above and beyond Solarplicity’s obligations around payment handling,” said a spokesperson for Solarplicity. “Ofgem did not engage with Solarplicity prior to issuing the provisional order to understand the robust processes Solarplicity has in place, or the arrangements we have made in respect of FiT generator payments.
“Earlier this year, Ofgem imposed restrictions on Solarplicity’s business under a separate provisional order which remains subject to consultation and legal appeal. Following this, however, Solarplicity made arrangements to ensure FiT generators would continue to receive FiT payments. All payments due to FiT generators are being made and arrangements are in place to make all future payments.
“The previous provisional order related to issues Ofgem identified with Solarplicity’s complaints handling, customer contact, vulnerable customer identification and switching/contracts renewals process. Solarplicity has rectified all issues identified by Ofgem and is now demonstrating performance equal to or above comparable suppliers across all areas. Solarplicity fully expects that the restrictions imposed by the previous provisional order will be lifted on or before Ofgem’s decision deadline of 22 May 2019.”
Solarplicity is not the only small energy supplier in the UK facing tough business challenges. Increasing competition, rising wholesale costs and the introduction of the government’s energy price cap at the beginning of this year have contributed to a growing number of small suppliers going out of business recently. In the last year alone, over ten energy suppliers in the UK have gone bust.