Consumer Protection: A tool to strengthen off-grid solar businesses and safeguard impact

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Image: PEG Africa

We know that consumer protection is key to ensuring the sustained, impactful growth of the off-grid solar industry. It protects consumers through transparent, responsible practice and high-quality products and services, and safeguards companies through mitigation of brand and financial risks. This is why GOGLA developed the Consumer Protection Code and is now leading the initiative to embed the principles in industry best-practice.

Today, as the world reels under the impacts of the COVID-19 pandemic, consumer protection is more important than ever. In our work with 60 Decibels – surveying more than 5,300 PAYGo solar home system (SHS) consumers over three months – we’ve seen that the pandemic has had a significant impact on incomes and household finances (85% reporting a decline in financial health since before the pandemic), with many having used coping mechanisms such as borrowing money or selling assets to meet their needs. However, customers value their solar product highly (68% report a ‘very much’ improved quality of life, compared to the pre-covid benchmark of 54%) – showing that the lighting, entertainment and connectivity are more important than ever.

Listening to consumers

Hearing what off-grid solar consumers have to say and then adapting to help meet their needs is vital as we build back better and recover from the effects of the pandemic. Here’s some of what we’ve heard from consumers, and what it means for consumer protection.

It is clear that consumers really value their SHS and the positive impacts they bring for their families. According to the survey, even at the height of local COVID-19 restrictions, many SHS customers prioritised payments for their PAYGo solar products, despite financial hardship. To avoid over-burdening consumers, companies should ensure they have in place robust methods of assessing credit-worthiness and maintaining responsible sales and pricing (one of the six Consumer Protection Principles); and as a sector, we should work to find ways to further support and extend access to the most vulnerable.

Furthermore, owners of SHS (especially in more mature markets) are not passive consumers and have reasonable quality expectations from their products. Good product quality is another of the GOGLA Consumer Protection Prinicples and is seen as key to unlocking higher rates of consumer satisfaction and repayment.

Agent management is regularly acknowledged as a difficult area for SHS companies, and a challenging but important aspect of ensuring minimum standards of consumer protection. How agents behave and are perceived as is essential to consumer satisfaction, which is reflected in the Consumer Protection Principles of responsible sales practice, transparency, fair and respectful treatment, and good consumer service.

The survey revealed that SHS customers place a high value on the communication and service provided by SHS companies. Honest, clear and accessible information that offers transparency to the customer is key throughout the customer journey and can have a positive impact on customer experience and repayment rates.

Commit to or endorse the GOGLA Consumer Protection Code

Unsurprisingly, the consumer insights data shows that top performing companies, by Net Promoter Score (NPS), had lower levels of customer burden, fewer product challenges, higher repayment rates, and a higher proportion of customers ‘very confident’ of making payments for the month ahead. This shows that improving company performance in the areas highlighted by the Consumer Protection Principles can lead to higher rates of customer satisfaction and increased rates of repayment.

It is important to acknowledge that the off-grid solar sector faces a difficult task in finding a balance between business survival and consumer relief in the response to and recovery from the pandemic. But putting consumer protection at the heart of operations could benefit both companies and consumers simultaneously – creating a path to sustainable growth and enduring impact, and increasing future resilience.

GOGLA encourages all off-grid solar companies to commit to the Consumer Protection Code and asks investors and donors to endorse it; to demonstrate that as a sector, we value and strive for consumer-centric practices.

Find out more about the GOGLA Consumer Protection code and how to commit or endorse the code on our Consumer Protection Hub.

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