Recommendation 24

HM Government Acknowledged

Ofgem is the independent regulator for gas and electricity markets in Great Britain. As such, they already have a significant role regulating companies in the heating sector. The Government is committed to legislating within this parliament to regulate the heat networks sector, and in December 2021 announced that Ofgem will take on the role of regulator. Under this regulatory framework, the BEIS Secretary of State will be given powers to introduce a price cap to the market in the future to protect consumers. In addition, legislation will give Ofgem powers to investigate and intervene where prices for heat network consumers appear to be disproportionate compared with systems with similar characteristics, or if prices are significantly higher than those consumers would expect to pay if they were served by an alternative heating system. Ofgem will also have powers to set rules requiring heat networks to publicly disclose sufficient information for the consumer to understand how much they are paying, including but not limited to, their fixed charges, tariffs, and unit rates, and provide clear explanations about how prices are set and how heat network consumers are billed. Under this regulatory framework, the Energy Ombudsman and Citizens Advice will be the frontline organisations to handle escalated consumer complaints and offer advisory services and support to consumers, including those in vulnerable circumstances. This gives consumers options for recourse when things go wrong, while Ofgem will have equivalent enforcement powers to in gas and electricity to deal with systemic issues. As is the case for all home utilities, regulatory authority covers supply up to the property. However, the Government also remains committed to protecting consumers where work is undertaken within the home to install a low carbon heating system. All new heating installations are expected to comply with Building Regulations (2010) and, where applicable, the Gas Safety Regulations (1998). The Government has strengthened consumer rights through the Consumer Rights Act 2015 (CRA). Under the CRA certain standards apply to every transaction for the sale and supply of goods to consumers, which must be of a satisfactory quality, be fit for a particular purpose, match the description, sample or model and be installed correctly. This includes home installations of energy efficiency and low carbon heating. The Consumer Protection from Unfair Trading Regulations 2008 also protect consumers from the mis-selling of goods and services and prohibit unfair commercial practices by businesses against consumers. Consumers can seek free advice on their rights through the Citizens Advice Consumer Service. Government recently consulted on a range of proposals to enhance consumer rights, and ensure those rights are robustly enforced. An important part of this is to support consumers and traders to resolve more disputes independently by improving access to arbitration and mediation services, thus avoiding the need to go to court. The Government is considering the responses received and will publish its response in due course. Contractors delivering energy efficiency or whole house retrofit works within Government schemes must be TrustMark registered, and heat pump installers must be certified by the Microgeneration Certification Scheme or equivalent. Both schemes take steps to ensure that installers demonstrate technical competence, good trading practices and good customer service, including offering a dispute resolution process in cases where things go wrong. These requirements are being kept under review and further consumer protection measures will be considered if necessary.