The Clean Energy Regulator has recommended that buy now pay later finance arrangements used in the purchase of small-scale rooftop solar systems be monitored by regulators, with the aim of making the financing arrangements more transparent.
The CER has released a review of the rooftop solar photovoltaic sector, focusing integrity issues around accreditation of installers and systems, as well as an increase in customer complaints about installation defects, quality concerns and false and misleading claims by retailers and salespeople.
The CER called for much tighter regulation of the sector and clearer responsibilities when it comes to enforcement.
On the issue of financing, the report noted that while BNPL is a popular and useful product in the small-scale solar market, “there are concerns that BNPL may be causing harm to some consumers”.
It said concerns were raised about the extent to which there is transparency of the terms of finance, the cost of the system (including the potential for inflated prices due to BNPL arrangements) and the practices of some retailers that offer BNPL products.
It said both the ACCC and the Consumer Action Law Centre submissions to the review referred to a lack of transparency of BNPL finance costs.
The CER said monitoring should be done with a view to ensuring there is better education about consumer rights, that the Australian Finance Industry Association’s BNPL Code is implemented across the sector and that there be greater transparency in financing arrangements.
The review quotes the Clean Energy Finance Corporation saying: “The CEFC would prefer to see full disclosure of all amounts being paid to the vendor, both in dollar and percentage of equipment purchase piece as mandatory disclosure in the customer finance contract. We also think it is appropriate for the customer contract to disclose an effective interest rate in the same manner as the NCCP requires disclosure of comparison rates.”
The CER endorsed this position, saying: “There appear to be no proposals from any Australian government entity to further regulate BNPL arrangements at this time. However, the minister could consider whether discussions with the Treasurer on this matter, including potentially considering the suggestion from the CEFC is worthy of further exploration.”
The CER said it planned to talk to the ACCC about the potential for consumer education on buying rooftop solar and this could include assistance in understanding consumer rights when it comes to BNPL finance.