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Strengthening consumer protection: Why we should put consumers at the heart of off-grid solar

@Biolite / Tory Williams

This article is part of a series by GOGLA and Sun-Connect News about the importance and impact of consumer protection from different perspectives. This series of articles highlights the importance of the Consumer Protection Code initiated by GOGLA for the off-grid market. More information about the Consumer Protection Code here.

Thinking back to the last time you signed up for a new digital or financial service, did you read – and fully understand – the terms and conditions before you clicked to accept them? What about the last time you purchased a product that let you down? Were you able to easily navigate the company’s warranty service, or did it leave you feeling frustrated and cheated? 

If you put yourself in the shoes of a typical off-grid solar consumer, it can feel daunting to be signing a financial contract for the first time; struggle to read the complex legal and technical terms in a language you hardly speak; or live too far from a service point to get your broken product fixed – despite the fact you’re still being asked for payment.

It’s no surprise that if a customer likes their product and feels informed, empowered and cared for, they are more willing to pay for it. In the six years since the GOGLA Consumer Protection (CP) Code was developed, more than 100 organisations in the off-grid solar (OGS) sector have committed to improve standards of consumer protection, mitigating financial, product and service risks. Data and insights from across the industry show a clear link between good standards of consumer protection, customer satisfaction and company profitability. 

“Addressing challenges promptly, ensuring affordability, delivering products and services that meet customers’ needs, and reaching new customers all contribute to higher satisfaction levels” – 60 Decibels

Using the CP Code and data from more than 17,000 consumer surveys, 60 Decibels have developed a new Consumer Protection Score, which is benchmarked at 68% (not bad, but could be better!). The score demonstrates where the sector is doing well – awareness of key contract terms – and where there is room for improvement – ease of use. Two-thirds of customers “say they have not experienced any challenge when using their product/service,” but this means that one in three consumers DO face challenges. We know that success in our industry is possible, but many companies struggle with a difficult operating environment, challenging credit risk management, and low portfolio quality. All of which is bad for consumers and companies. 

GOGLA’s vision for a mature industry is consumer-centric, driven by high-quality products, excellent customer services, robust credit risk management, high investor confidence and smart subsidies that fill the affordability gap. Notable improvements to consumer protection have been made by many companies in the last few years, but we now need a holistic, end-to-end  approach that will tie together the disparate parts – realistic investor targets, effective agent incentives, efficient business processes and clear success metrics. To get there, we need a systemic solution to help bring about a step-change in industry performance and impact. 

This is why we’re building on our work in consumer protection and have launched the Consumer Experience (CX) Initiative. The Initiative puts consumers at the front and centre of activities to improve not only their protection but also satisfaction – as well as product usage and ownership. We are proposing that off-grid solar companies set ambitious targets in this regard to demonstrate their commitment to consumers and bolster the confidence of investors. Investors, on the other hand, must align their strategies with the responsible business growth needed to reach the 700+ million people who lack electricity access.

Aside from support to implement good consumer protection practices, the CX Initiative will help companies with technical assistance, tools and research to improve portfolio quality and profitability, boost investor confidence, and ultimately enhance the day-to-day experiences of off-grid solar consumers. The CX roadmap includes work on 1) investment strategy and drivers, 2) credit reference systems, 3) operational best practices, 4) managing at-risk customers, and 5) standardised KPIs and data insights. Find out more here and reach out to the GOGLA team to learn how you can get involved.

 

 

GOGLA invites all consumer-facing organisations within the off-grid solar sector to make a commitment to the Consumer Protection Code so that together, we can create a sustainable, consumer-centric industry. Committing is only the first step in a company’s consumer protection journey, and we are building a toolbox to help implement continuous operational improvements.

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