GOGLA recently celebrated the 100th adoption of its Consumer Protection (CP) Code for the off-grid solar industry, which launched in 2018. The CP Code is an inclusive framework for the sector that defines the minimum standards every consumer should expect from their off-grid solar provider. It aims to safeguard consumer rights, responsibly enhancing the impacts of increased energy access for low-income consumers.
Adoptions include both companies with consumer-facing operations that commit to implementing the six principles included in the CP Code, and other industry players such as investors that endorse the Code and make sure it’s used through their funds or programmes.
Isaiah D Nyakusendwa, founder and CEO of Celfre Energy, who was the 100th organisation to adopt the CP Code, explains their motivation to commit: “we want to inspire confidence in the quality of our products, build trust around our brand and, at the same time, make sure consumers get value for their money and can make their payments, while enhancing their livelihoods.”
Why is good consumer protection important for customers?
The off-grid solar sector is improving the lives of millions of consumers and delivering significant social, economic and environmental impacts. Its customers should have access to quality products and services, clear and transparent information, responsible prices and selling practices. They should be treated respectfully and have their personal data protected.
Celfre Energy’s Isaiah states: “We think it’s particularly important to offer good quality and build trust around our brand because we work with the bottom of the pyramid. We need to make sure which product fits their needs and aspirations and that there are sustainable payment methods in place.”
Clear, simple labelling and usage instructions (accessible to consumers with low-literacy levels) and access to warranty, after-sales services and customer support in case something goes wrong ensure that consumers can use and maintain the products to maximise performance and longevity. This is not just positive for consumers but also for the planet, minimising the amount of e-waste generated.
When consumer protection standards are upheld, consumers are empowered to make informed decisions so that products and appliances meet their needs and payment plans meet their means. A satisfied customer who can fully benefit from their off-grid solar product is more likely to make repayments on time, promote the product to their neighbours and friends, and is more likely to make other clean energy purchases in the future.
Why is consumer protection a must for companies?
Companies that make a Commitment to the CP Code can build a positive reputation as trusted brands dedicated to protecting the interests of their consumers and upholding high operational standards. The CP Code provides companies with the framework, tools and resources to help improve consumer-facing operations, including ensuring agents are well-trained, and products meet the Verasol Quality Standards or higher with meaningful warranties and after-sales support. Consumers can therefore be sure that their product is high quality, long-lasting and safe, and that they can access effective customer services.
As consumer trust and satisfaction build, companies can rely on word of mouth as one of their most robust marketing tools. This is a precious resource in last-mile markets where sales and marketing are complex and operations costly. As sales increase, the path to profitability and growth becomes easier. There is a strong correlation between companies with high net promoter scores, low challenge rates, and low repayment burden, and higher repayment rates. Companies that are strong on consumer protection are therefore more likely to get paid by their customers.
Why is consumer protection important for the sector?
Widespread industry action on consumer protection mitigates sector risks and accelerates responsible and impactful market growth. The CP Code also includes an assessment framework which helps companies measure, monitor and report their practices while providing investors and other stakeholders with a framework to promote good practice. The framework includes a self-assessment tool against which companies review their performance against 37 CP indicators; a third-party assessment that is undertaken by an independent rating agency (available via MFR); and a consumer survey tool which helps validate company performance through consumer experience (available via 60 Decibels).
Avi Jacobson, Director and Portfolio Manager at SunFunder explains the importance of the CP Code from the investor perspective: “The Consumer Protection Code supports our success by ensuring a level of mission alignment with our borrowers. As a responsible investor we want to know they also take their responsibilities seriously. The Code maps out the safeguards we think are necessary to protect the ultimate beneficiaries of off-grid solar energy access – and SunFunder’s financing… Implementing the Code is not only the right thing to do, but also sends positive signals to SunFunder and other investors.”
Reaching 100 adoptions is a huge milestone representing the progress made so far and demonstrates that the industry is taking its responsibility to protect off-grid solar consumers seriously. Making a Commitment or Endorsement of the Code is only the beginning of the journey however, and consumer protection can be thought of as the golden thread between impact and sustainable business growth.
GOGLA is targeting 150 adoptions by the end of next year. We invite all actors within the off-grid solar sector to adopt the CP Code so that together, we can create a sustainable, consumer-centric industry.