Big 6-controlled Gemserv is sitting on millions of pounds of renewable energy industry cash in one of its bank accounts, it can be revealed today.
The company is “looking after” more than £4.3 million of revenues generated from registration and installation fees from the Microgeneration Certification Scheme (MCS).
The money, which is recorded within Gemserv's latest set of accounts, is languishing in a non-interest earning account but cannot be used as the MCS currently has no spending powers.
The issue has raised more industry concern about the role of Gemserv acting as regulators for the renewable energy scheme after it became known the firm is actually owned and controlled by the Big 6 energy companies.
And it has emerged today that senior officials from energy giants Scottish & Southern and nPower even sit on the 4-strong Gemserve board of non-executive directors. However, no representatives from the renewable energy sector the company regulates are present.
There is no suggestion of any improper conduct but the lack of transparency is leading to the inevitable questions as to the extent of influence the Big 6 are exerting in Gemserv and through to the renewable energy industry.
A spokesperson for the REAL scheme, which partners with the MCS, admitted: "REAL has no knowledge of the amount of influence Gemserv’s shareholders exert on its decision-making processes."
And Jeremy Leggett of SolarCentury said tonight the latest revelations raised “serious concern” about how the MCS is operated as “it is essential companies and customers alike have complete confidence in the regulatory regime”.
Gemserv is the DECC-appointed licensee for the MCS programme, which is supposed to be an independent scheme which certificates microgeneration products and companies installing renewable technologies.
Industry leaders are also questioning if Gemserv is trying to create a “monopolised industry within an industry” following its recent consultation to introduce more regulation and cost through the “Competency Criteria”, which they claim propose more stringent rules for renewable energy companies.
Renewable energy installers – who are mainly small businesses with only a few employees – are worried that the added costs of training and the burden of further paperwork will cripple their businesses.
Against this backdrop, the directors of Gemserv this year enjoyed a half-a-million pound bumper payout, with chief executive David Thorne reputedly earning a remuneration package of £198,000.
Critics claim the hefty pay-outs come at a time when Gemserv is looking to increase the burden and criteria on renewable energy operators and subsequently earn yet more revenue.
David Hunt of Liverpool-based Eco Environments said the latest developments should act as a warning for the renewable energy industry to resist further red-tape.
“There are certainly enough qualifications and training courses out there in the market to satisfy the quality and control requirements of a registration scheme,” he added.
“At a time when the industry is focusing on cutting costs and streamlining, this scheme is looking to add costs and administrative burden... and obviously yet more revenue, which most installers can ill afford.
“They have done nothing to change with the times. While the £5 installation fee was not really factored in when projects were costing £12,000 to £15,000, now they’re down to £5,000 the cost is becoming a far higher percentage and therefore more of a consideration – especially if Gemserv want to add yet more training requirements and paperwork.
“They appear to be wanting to create a monopolised industry within an industry and it is unnecessary.”
And Andy Rankin of Cambridge-based solar wholesaler Midsummer Energy said the industry was in a state of limbo awaiting the results of Gemserv’s consultation on the ‘Competence Criteria’.
“We are still waiting to hearing what the outcome of the consultation exercise will be, “ he added. “We have had no details back. It looks very much like the training and accrediting bodies such as MCS have been conniving amongst themselves to add more training requirements so that they can squeeze even more cash from installers in training courses and fees.
“It is typical of how regulators create an industry for themselves within an industry to place more burden and responsibility on the little guy to generate more profit for themselves.”
Solar industry leader Howard Johns said he was surprised to learn that Gemserv was owned and controlled by the Big 6 energy companies.
He said: “Its slightly ironic that one of the most complained about aspects of working in the microgen sector is actually being regulated by the Big 6.
“However, it is good to see it is such a profitable activity – perhaps Genserve should give back to the industry at this point of challenge and help to fund the positive communication campaign that is so urgently needed to get the sector moving again.”
And Jeremy Leggett of SolarCentury, added: “These allegations raise serious concerns about the way the MCS scheme is managed.
“Clearly, it is essential companies and customers alike have complete confidence in the regulatory regime"
However, Dave Sowdon of the Micropower Council and a temporary director of MCS Services Ltd, defended Gemserv's role in administering the MCS programme and said he had never seen any evidence that the company had tried to influence the scheme.
“It is the license that governs how Gemserv administers the scheme and not the shareholders,” he added. “Gemserv is absolutely not in control of the MCS.”
Sowdon explained that Gemserv are currently acting as “custodians” of the MCS cash while the organisation undergoes a transition phase.
“In effect, they are looking after the money while we undergo a transition phase to a more transparent and accountable structure.
“Once that structure is up and running we will then be in a position to make decisions on how the money should be best spent. That may include consumer awareness campaigns for the Renewable Heat Incentive, reinvesting in training and expanding the skills base and generally making standards better.”
A spokesman for Gemserv was yet again unavailable for comment.