In a 2022 decision, the Financial Ombudsman Service (FOS) ruled against a claim of mis-selling solar and ASHP products thanks to accurate reviews by EPVS, but found in favour of the consumers on the grounds of irresponsible lending.
This case study highlights the critical importance of robust affordability checks when financing renewable energy systems, installer transparency, and how EPVS continues refining its role in the renewable energy finance journey.
Background & Complaint
Mr. and Mrs. C sought to reduce their energy bills and transition away from an inefficient oil-based system. They purchased a solar PV system and an air source heat pump (ASHP), financing them through two fixed-sum loan agreements totalling over £35,000. The couple claimed they were told the systems would “pay for themselves” through energy savings and government incentives (Feed-in Tariff for solar, Renewable Heat Incentive for ASHP).
Soon after installation, the couple reported colder home conditions, higher-than-expected energy bills, and significantly lower returns than anticipated. Believing they’d been misled, they lodged a complaint under Section 75 of the Consumer Credit Act, claiming that the systems did not deliver the promised savings, their electricity bills increased, and they struggled to repay the loans. They wanted the systems removed and the loan agreements cancelled.
FOS Findings
The FOS dismissed the mis-sell claim, concluding that while the sales pitch was optimistic, the documentation clearly explained expected generation, performance assumptions, and finance costs. The PV system was performing within 10% of its quoted output, and while the ASHP required maintenance, it was broadly functional.
It is crucial to note that the performance and savings estimates associated with the solar panel system and air source heat pump were independently validated by EPVS, which ensured that the quoted savings and benefits were realistic and in line with industry standards. This independent validation was key in disproving the claims of mis-selling related to the system’s performance.
The FOS upheld the claim that the Lender had lent irresponsibly, failing to:
- Adequately verify income despite a high debt-to-income ratio
- Accurately assess outgoings and credit obligations
- Prevent financial overextension, which soon led to repayment difficulties
As a result, the Lender was ordered to waive all interest, refund charges, remove negative credit entries, and negotiate a fair repayment plan on the capital balance.
EPVS Insight
Although EPVS was not directly implicated, the case offers vital insights into where validation and responsible finance intersect:
- Affordability Isn’t Just for Lenders: While EPVS focuses on validating technical accuracy and performance assumptions, this case reinforces the need for coordinated consumer assessment across the installer-finance chain.
- Clarity at the Point of Sale: Even with documentation in place, expectations around “self-funding systems” must be communicated with absolute clarity – especially when incentives or additional equipment (like batteries) are not included in the contract.
- The Power of Documentation: Thanks to thorough system validation and installer paperwork, the FOS found no fault with the performance representations – demonstrating the protection well-executed EPVS processes can offer.
While misrepresentation was not found, the financial harm caused by lending decisions underscores the need for shared accountability.
At EPVS, we believe in raising the bar beyond compliance – to champion a market where consumer trust is built not only on data, but on diligence.
Do you have an opinion, or have you had an experience, relating to the above?
Let us know by emailing info@epvs.co.uk
