BEST PRACTICE REGULATION OF THE AUSTRALIAN SOLAR INDUSTRY CLEAN ENERGY COUNCIL FEBRUARY 2015

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1 BEST PRACTICE REGULATION OF THE AUSTRALIAN SOLAR INDUSTRY CLEAN ENERGY COUNCIL FEBRUARY

2 This paper outlines the current regulatory framework for the Australian solar industry, and the range of initiatives underway to continue to refine this regime. This framework and approach has been developed over more than a decade. As the pace of change in the solar sector accelerates, it is important that stakeholders understand the roles of different bodies, the current framework, initiatives underway and have the opportunity to provide feedback on further initiatives that can ensure ongoing best practice in the solar sector. Feedback on this paper is welcome to accreditation@cleanenergycouncil.org.au. 1. THE ROLES OF DIFFERENT REGULATORY BODIES The current compliance regime applying to solar is overseen by a number of bodies including the Federal Government Clean Energy Regulator, state government electrical safety bodies, Standards Australia, state-based consumer protection bodies, distribution network service providers and the Clean Energy Council (CEC). These bodies continue to work together to refine the regulations and standards that relate to the sector as it evolves. A summary of each of these bodies and their role with respect to solar is outlined below. Organisation(s) Clean Energy Council Role(s) Oversees accreditation of solar installers including installation guidelines, continuing professional development programs and dispute procedures. Maintains listings of products eligible to be installed (based on Australian and International Standards) and to access incentives. Manages Solar PV Retailer Code of Conduct. Clean Energy Regulator Overall responsibility for management of Renewable Energy Target. Ensures incentive is only provided where systems have been installed by accredited installer and with valid products. Undertakes independent inspection of a statistically BEST PRACTICE REGULATION OF THE AUSTRALIAN SOLAR INDUSTRY 2

3 significant sample of installations. State-based electrical bodies State-based consumer protection bodies Distribution network service providers Standards Australia Overall responsibility for electrical licences, electrical safety, and electrical product compliance in each state. Oversight for consumer related complaints in relation to Australian Consumer Law, including product recall (in collaboration with relevant state authorities). Maintain and operate the high and low voltage electrical networks. Their role is to ensure the network is supplying reliable, safe electricity to the electricity meter at every household and business. Oversight for the development and implementation of relevant Australian Standards including AS4777 and AS/NZS CURRENT LEVELS OF PERFORMANCE AND COMPLIANCE The CEC believes that the solar sector has a strong record of safety and quality, acknowledging that isolated issues will arise from time to time. Coming to this conclusion and assessing the effectiveness of the current regulatory framework requires an evaluation of a number of relevant data sources, as follows: Clean Energy Regulator (CER) data that shows that replacement solar panels account for just per cent of all certificates issued under the Small-scale Renewable Energy Scheme (SRES). There have been 67 complaints relating to solar systems lodged with the Clean Energy Council in the past twelve months. Eight were related to products, of which six were related to inverters, one to a DC isolator and one to solar panels. More than 173,000 solar PV systems were installed in 2014, and only 24 complaints about panels have been received by an industry complaints portal run by the Australian PV Institute 1 for the 4,500 installers and hundreds of thousands of solar customers. The CER has administered an inspection scheme since May There have been 13,015 independent inspections of solar PV systems and 3.86 per cent (or 503) were assessed as unsafe 2. The CER notes that substandard rates have declined, which coincided with increased communication by industry and improved solar products. Over 80 per cent of systems assessed as unsafe were in relation to DC isolators, the majority relating to the rooftop installation of these devices as recently required. This 1 Australian PV Institute fault reporting portal: 2 Inspections update No. 12, CER website: BEST PRACTICE REGULATION OF THE AUSTRALIAN SOLAR INDUSTRY 3

4 matter and initiatives to address this issue are discussed below in this paper. The CEC continues to work with the CER and state-based electrical safety bodies to reflect on these findings and emerging and common issues to improve and evolve the regulatory approach. Many of these developments are outlined below. In reviewing this data it is evident that there may be clear benefit in undertaking an annual assurance report of the sector. The report could collate data, evaluate trends and recommend improvements to the regulatory and compliance framework. The CEC would welcome further discussions about such an initiative with regulatory bodies. 3. ENSURING SOLAR PRODUCTS ARE SAFE Any solar panel or inverter that is eligible under the Small-scale Renewable Energy Scheme (SRES) must meet well established international and Australian standards for quality and safety. These standards are recognised and adopted throughout much of the world and ensure robust consumer protections are in place, including stringent safety requirements. Only products that meet these standards will be listed by the CEC and therefore be eligible under SRES. Eligible product lists are regularly reviewed. Panel approval The CEC has a robust process for listing panels on the CEC-approved panel list, which is reviewed regularly and benchmarked against international standards. AS/NZS 5033 requires modules to comply with: EN/IEC and -2 Class A (Safety Class I), and either EN/IEC 61625(Crystalline silicon) or EN/IEC (Thin film) Since 16 July 2013, PV modules installed on buildings must also be certified as Fire Safety Class C (fundamental fire resistance) or better. Additionally, panel testing must be performed by a test laboratory approved to test PV modules to these standards under the IECEE CB scheme (CBTL). The certificate must be issued by a national certifying body (NCB) associated with that laboratory, which is accredited to certify PV module testing under the IECEE CB scheme. Standards development is a key component to improving the PV industry. The CEC plays an active role on the EL 42 standards committee that recently oversaw the revision of AS/NZS 5033, released on 6 November The CEC is also involved in the development of the new inverter standard AS/NZS The ongoing evolution of these standards ensures that Australian products keep pace with emerging issues and international best practice. In addition, the CEC has also recently strengthened the requirements for listing of products. The key changes are: BEST PRACTICE REGULATION OF THE AUSTRALIAN SOLAR INDUSTRY 4

5 All applications now require the Construction Data Form (CDF) associated with the certificate to be supplied. The CDF details the materials certified for use in the modules. This requirement was effective as of September All modules on the approved product list will soon be required to display the certifier mark on its label. This is so that the organisation responsible for certifying the module can be easily identified. This will apply to all new applications from 1 March Existing approved modules will be required to carry this mark on all shipments from the factory after 1 June All PV connectors must be certified to meet EN Sales datasheets must not show the PV connector as 'MC4 compatible'. All datasheets or installation manuals must specify the actual connector make and model used. Installers are required to use the same connector to terminate the array. Datasheet power ratings should specify both a sorting and a measurement tolerance. If only a 'power tolerance' is given, this will be understood to include both the sorting and the measurement tolerance. Measurement tolerances of +/-3 per cent are considered the norm for crystalline modules. The module label should correspond to the samples provided at approval. Labels must not be changed after modules leave the factory. Changing labels without the written approval of the CEC may be regarded as fraudulent and could lead to suspension of approval. Inverter approvals The CEC administers a list of approved inverters for installation by CEC accredited installers. The process is based on a certification scheme where the inverter manufacturer or their agent must provide evidence to a certifying body that their equipment is safe for use and meets the required Australian Standards. The appropriate Australian Standards are listed on the certificate. The CEC listing process will only accept certificates from JAS-ANZ (Joint Australia-New Zealand) accredited certifiers or directly from state electrical regulators. On the application to list an inverter the CEC also requires evidence that the manufacturer or importer has registered as the responsible supplier via the national responsible supplier database. The CEC listing process is rigorous, bearing in mind that solar inverters under current state electrical safety requirements are considered Level 1 (non-prescribed) equipment. Without the CEC certification process in place, this equipment would not require any certification (unlike power points, toasters and other electrical appliances). Improving DC isolator products and installation As outlined above, Clean Energy Regulator inspections have revealed issues relating to DC isolators. The majority of these issues relate to DC isolator products, rather than their installation per se, and the majority of cases in relation to their installation on rooftops. As outlined below, the CEC has been working with state electrical safety bodies to highlight this issue and review potential solutions. AS/NZS 5033 (the array installation standard) requires DC switch disconnectors used in BEST PRACTICE REGULATION OF THE AUSTRALIAN SOLAR INDUSTRY 5

6 Australia be certified to meet the IEC series of standards. The most appropriate version of the standard IEC is currently undergoing a number of significant amendments with regards to the testing regimes for these items. The state electrical regulators are aware of these amendments and are currently investigating whether these amendments would increase the level of safety of the switchgear in the Australian context. Ultimately it will be up to the state regulators to decide whether to adopt or refer to the IEC standard. In addition, the CEC has established a working group to review and recommend measures that increase the safety of PV installations where DC isolators are installed. This working group includes representatives from state electrical regulators, certifying bodies, equipment manufacturers and equipment wholesalers. This working group has commenced a review of DC isolators and it will consider the most appropriate standards to which DC isolators should be certified, how best to deal with issues raised and the development of a best practice product listing process to display DC isolators that have been deemed fit for purpose for the Australian environment. There have been several recalls of PV switch disconnectors over the last few years and it is important to note that every one of these recalls has been due to inherent manufacturing defects. It is also important to note that evidence suggests some of these recalled products were tested and certified to meet the current version of IEC To reinforce the need for ongoing scrutiny, the CEC is also considering the introduction of a random testing regime for PV switch disconnectors. Testing would be carried out to specific and agreed criteria and to a set procedure, possibly from the amended IEC standard or others as advised from consultation with state regulators. The CEC is also drafting a revised set of installer guidelines to address the issue of array isolator location. The guidelines will advise on alternative locations and installation best practice procedures with the intention of protecting the equipment from the effects of weathering by sun and rain. Best practice PV mounting frames In order to improve the quality of information available to CEC accredited installers, the CEC has completed the construction of a best practice listing process for PV mounting frames. Many frame manufacturers have entered the Australian market, and much of the documentation available to installers fails to provide sufficient information on the where and how for the safe and compliant installation of the hardware that secures the PV panels to the roof structure. The best practice procedure contains a stringent set of requirements that will need to be met in order for a product to gain a listing. 4. ENSURING THAT PRODUCTS ARE PRODUCED TO THEIR CERTIFICATION STANDARDS While a panel or inverter may be certified to a variety of national and international standards, BEST PRACTICE REGULATION OF THE AUSTRALIAN SOLAR INDUSTRY 6

7 concerns have been raised about subsequent product entering the Australian market that is not produced to the same level to which it has been certified. There are a number of ways this issue can be addressed including: Undertaking testing of products to ensure that they meet their certification levels Sharing information across the industry where products are not performing as expected Requiring that eligible products are manufactured in facilities with an ISO accreditation The status and approach to each of these is outlined below. The CEC has responded to this issue by introducing a new testing program to ensure that panels are produced to the standard to which they are certified. As it is impractical to test every panel on the Australian market, the CEC has developed a targeted testing regime to investigate non-compliant and poor quality modules. Targeting is guided by complaints received from consumers and installers. The effectiveness of the testing program will be reviewed regularly. The CEC initiates testing that is carried out at university-based laboratories that have AAA-class solar simulators with calibration certificates. Modules are subjected to a range of tests (including flash testing) to ensure they meet their specifications. Components are also examined to ensure they have been certified for use in those model numbers. If there are discrepancies, the manufacturer or certificate holder will be asked to show cause as to why their module(s) should not be taken off the approved modules list. This program was established recently and the first results will be released shortly. If testing reveals that the installed product does not deliver against the certification of the product, a range of actions will be taken by the CEC. This includes: Notification to the Clean Energy Regulator (CER); Publication on the CEC website; and Subject to CER advice, removal from the CEC list and subsequent loss of eligibility for rebates under the SRES. The CEC has recently tightened requirements relating to listings of inverters, to allow inverters to be removed from product listing where the supplier has not been responsive or cooperative to certain issues including where there has been a breach of Australian Consumer Law or evidence of continued product failure or a recall notice. While a panel testing program has been established to address concerns about panels being installed that have not been produced to the level of their certification, there is scope to introduce a similar program for the testing of inverter technology to ensure they also perform to the level of their certification. The CEC welcomes feedback on such an approach. Consumers can have greater confidence about the quality of products where they are manufactured from facilities with stronger quality control, as recognised by ISO accreditation. Further consideration could be given to requiring products to be produced from ISO accredited facilities, to be eligible to be installed (and access SRES) in Australia. This proposal is worthy of further consideration and the CEC is seeking feedback from stakeholders on the feasibility and impact of such an approach. The Australian PV Institute has established a fault reporting website portal for anyone who BEST PRACTICE REGULATION OF THE AUSTRALIAN SOLAR INDUSTRY 7

8 owns, operates, installs or inspects a PV system and/or has detected a fault/problem with whole or part of the system. This PV Module and System Fault Reporting Portal has been developed to increase the understanding of the PV industry about the types of problems that are found with different system components when they are exposed to the Australian environment. It helps to improve future PV system design, component selection, product development and product approvals for Australian conditions. Feedback on the effectiveness of each of these approaches is invited from interested stakeholders. 5. ALLOWING CONSUMERS TO CHOOSE PRODUCTS OF HIGHER QUALITY The solar modules on the CEC-approved list must meet the relevant standards as outlined above. This is a minimum requirement. There is a range of independent PV module rating systems that set quality and performance standards above the minimum standards. These can give consumers and installers more information on the modules they are looking to install. There are also some well-regarded testing facilities that provide data on in-situ operation of modules, which can give an indication of the longer-term performance of modules. The additional independent tests that are accepted by the CEC and are shown on the approved module list are: PV+, VDE Quality Tested, TÜV Thresher Tested, Atlas 25+ certification, Fraunhofer PVDI testing This information is available to consumers 3 to help them understand the differences in these certifications and make informed choices. 6. HELPING CONSUMERS MAKE WELL INFORMED CHOICES The solar sector is highly competitive, with a large numbers of businesses offering many different systems with different designs, levels of quality and performance and price points. This has helped to provide choices for consumers and reduce prices. It does, however, mean that consumer awareness is critical. It must be recognised that 3 PV module standards, Solar Accreditation website: BEST PRACTICE REGULATION OF THE AUSTRALIAN SOLAR INDUSTRY 8

9 consumers will make different choices with respect to the quality and costs of systems they may purchase. To help consumers understand their options and make a decision that suits them there are a number of important measures in place: A range of consumer guides produced by industry and consumer groups, including the CEC s guides to installing solar PV for households and businesses 4. This is supported by a range of consumer bodies such as Choice and the Alternative Technology Association. The CEC s Solar PV Retailer Code of Conduct, which allows consumers to purchase their system from a retailer who voluntarily offers a higher level of service and support (as detailed below). Expansion of the CEC product listing to provide information about additional certification levels for panels, and details of which panels have any additional certifications. This information is available to consumers so that they can understand the differences in these certifications and make informed choices. The CEC s consumer guide also provides advice on maintenance and support for systems. As the uptake and age of systems increases, further consideration needs to be given on tools and information to assist consumers to maintain their systems, monitor system performance and safety. Smart meters can assist with performance monitoring. There are also commercially available products designed to monitor solar system performance. Some distribution network service providers proactively inform their customers regarding solar system maintenance, and in some cases they refer their customers to the CEC s consumer information and online guides. The CEC and the solar industry are continuing to seek ways to better inform consumers and welcome additional initiatives and suggestions to ensure consumers are well informed of the choices they have in purchasing and maintaining solar panel systems. We welcome additional efforts by governments and industry to improve consumer awareness of these matters. 7. ENSURING THE SAFE INSTALLATION OF SOLAR SYSTEMS The Australian solar industry has an established reputation for responsible self-regulation. The industry has had an accreditation process since Many other countries either do not have an accreditation process or commenced their program much later than Australia. The Australian solar industry advocated for renewable energy training to be part of the electrical national training package from the mid-1990s and this proposal was adopted around in the early 2000s. Many other countries still do not have national training for renewable energy competency. To be eligible for a rebate under the Small-scale Renewable Energy Scheme (SRES) solar PV systems must be installed by a professional who: Has an electrical licence; Is accredited by the Clean Energy Council (CEC); and Has completed the necessary level of training. The installation of solar PV systems is overseen by the CEC accreditation program, which 4 Solar guides for households and businesses, Solar Accreditation website: BEST PRACTICE REGULATION OF THE AUSTRALIAN SOLAR INDUSTRY 9

10 ensures that any installer has the necessary level of competence. Inspections are undertaken by the CER to reveal the level of compliance. Any issues of concern are raised with the CEC and subsequently investigated. Responses depend on the nature of the issues identified and can include cancellation of accreditation (in cases of serious breaches) or suspension of accreditation, subject to the installer rectifying the issue and demonstrating appropriate competence by completing necessary continuing professional development (CPD). With the recent re-release of AS/NZS 5033, the CEC is currently updating the installation and design guidelines. This will further improve installation practices and reduce the occurrences of common issues. Since October 2012 all renewing installers have been required to undertake training as part of the CEC s Continuing Professional Development (CPD) program. The CPD program enables installers to maintain their current knowledge base, and encourages continuous updating of skills and knowledge on emerging issues. It also helps installers and designers to install correctly and stay informed of changes and updates to relevant Australian Standards. There are currently over 180 approved training courses eligible for CPD points. Courses include those that address issues in the industry (such as electrical skills), and those that aim to ensure installers are up to date with the changing standards in the industry, such as the update to AS The accreditation scheme includes a demerit point system which allows the CEC to recognise and address poor installation practices. The CEC utilises data provided through disputes and complaints, the CER inspection data and data from other information sources to allocate demerit points. Allocation of 20 or more demerit points within a 24-month period will result in the suspension of an installer's accreditation. The compliance procedure allows the CEC to take a variety of actions including suspension until competency is proven, or cancellation of their accreditation. 8. PROVIDING SUPPORT FOR CONSUMERS IF SOMETHING GOES WRONG Most solar PV panels have performance warranties of 20 years or more. Consumers receive a high level of protection under Australian Consumer Law, and have access to effective services provided by state Fair Trading offices. Under Australian Consumer Law solar PV retailers and manufacturers are required to honour express warranties. Further, warranties against defects must comply with the requirements prescribed by the Australian Consumer Law. Despite this, the CEC believes there is more that can be done to ensure consumers are protected. This is the area where the CEC has focused much of its attention in recent years. Consumers, the solar PV industry and the CEC identified the need for an industry code of conduct that would address issues such as: Misleading claims given to consumers regarding the performance of their PV system and future electricity bills; Misleading advertising regarding the size of PV systems, the value of available government incentives, and the suitability of the PV system; BEST PRACTICE REGULATION OF THE AUSTRALIAN SOLAR INDUSTRY 10

11 The retailer not taking responsibility for the whole of the PV system including product warranties and workmanship; and The retailer not taking responsibility for the actions of subcontracted parties acting on their behalf and any parties who generate sales leads utilised by the retailer. To ensure the interaction between PV retailers and consumers is of the highest integrity, the CEC developed the voluntary Solar PV Retailer Code of Conduct, which aims to promote and further develop best practice measures and activities for retail businesses that sell PV systems. The Code aims to drive increased accountability within the PV retail industry and to improve the relationship between consumers and PV retailers. It is designed to provide consumers with confidence that the retailer will act in compliance with relevant laws and regulations, and conduct its business in a professional and ethical manner. One of the key elements of the Code is the requirement for these retailers to offer a five year, whole-of-system warranty. This demonstrates a higher level of commitment to the consumer, as well as driving the retail sector to support higher quality product and installation. The Solar PV Retailer Code of Conduct is approved by the Australian Competition and Consumer Commission (ACCC). Since its launch on 20 November 2013 it has attracted 19 signatories and has become widely accepted as the benchmark for quality. Further information is available online at approvedsolarretailer.com.au. The CEC has recently applied to the ACCC to extend the scope of the Solar PV Retailer Code of Conduct to providers of solar leasing products and solar power purchase agreements (PPAs). A voluntary Code of Conduct can assist with directing consumers to retailers of the highest integrity. However, as a voluntary initiative it cannot directly address warranty concerns across the entire industry. There is scope to substantially improve consumer protection for purchasers of solar PV systems by stipulating minimum warranty provisions for SRES eligibility. Most reputable panel suppliers provide a product workmanship warranty of at least ten years (and up to 25 years) for panels and a performance warranty of 25 to 30 years. The government could consider limiting the availability of rebates under SRES to panels that carry a workmanship warranty of at least ten years. Stipulating a minimum warranty requirement under SRES would also assist in addressing the problem of so-called parallel or grey imports. Grey imports are panels that are imported through ad hoc distribution channels, often from China. Grey imports are legal and are eligible for rebates under the SRES. However, they do not necessarily come with the level of warranty and consumer protections expected by customers. It would strengthen consumer protection if the CER were to limit eligibility to SRES rebates to PV panels that carry an industry best practice performance warranty of at least ten years. While the Clean Energy Regulator currently allows the replacement of panels to be eligible to create certificates under SRES, this approach may require further review to avoid any inappropriate behaviour. While often failed panels may be covered by insurance (such as a house fire) or warranty where the panels fail within their warranty period, there may be instances where incentive for replacement panels remains appropriate. The CEC would be pleased to be consulted further on this matter by the CER. BEST PRACTICE REGULATION OF THE AUSTRALIAN SOLAR INDUSTRY 11