Written evidence submitted by Charles Montlake, Director of Use the Sun Ltd

Please find below my written submission.  I confirm that

-         As far as I am aware it is the truth

-         I am happy for all or part to be published with or without my name and/or that of my company

-         I am writing as a director of Use the Sun Ltd and also as a customer who has made 3 applications for Grants

INTRODUCTION

In September 2020 ours, and every company I know, was expanding with orders streaming in.  Then it was announced that there would be a grant coming soon.  The market came to a shuddering halt as customers put their installations on hold whilst applying for the Grant

No Grant in September or October left 6 weeks with hardly any work.  A few trickled through mid-November, by Christmas we had 5 vouchers, half our sales team had left and we were using reserves to pay the back office staff.

We have to fight for every voucher

Rather than help the industry the Green Homes Grant Scheme send out slanderous emails telling our customers to go to other suppliers.

Installations are running at 20% of potential because

our clients are waiting for their Grants

There are currently just over 400 installers of Air Source Heat Pumps (A.S.H.P.) in the UK, most have a couple of teams qualified to complete installations, approximately 1,000 teams

Like us these companies are accredited by MCS (Microgeneration Certification Scheme) and either HIES or RECC and their installations are partially funded by the Renewable Heat Incentive. 

It is estimated 30,000 A.S.H.P.s have been installed leaving approx. 32 million more to be completed in order to attain the Government’s 2050 target,

That is over 1,000,000 a year, or 20 per week per team, current average fit time is 3 days

The market needs the supply side to grow

I have spoken to 3 other installers (4 installers = 1% of the population, you have access to more if that is not enough) who all report the same thing

Grants are running below 20% of applications.  1 has said they will stop accepting Grant sales, 1 other has said they, like me, are on the brink of extinction and the last is OK as only has 1 team and their main focus is PV which, luckily, is not covered by the Grant.

This is exacerbated by the Green Homes Grant Scheme (G.H.G.S.) writing to our customer and telling them we are overpriced and they should get another quote.  Destroying our reputation whilst refusing our sales is truly killing us and the market

In theory the purpose of the G.H.G.S. was to promote A.S.H.P.s so that post Covid the industry is stronger and ready to meet the installation required to hit the 2050 targets

In practice the G.H.G.S. is destroying the market. 

-         Highly qualified tradesmen are having to go elsewhere for work and will not come back.

-         Highly trained salesmen have already started moving on to other industries

-         Healthy firms will have to close their doors and will not come back. 

-         Suppliers will move their supplies to mainland Europe and those installers left will not be able to get hold of A.S.H.P.s at all (hard enough before the Grant existed to get them in time). 

Crazy thing is the Grant is actually worth £ ZERO (see below for why). 

More, we are all MCS Accredited and audited annually, our paperwork is sufficient for MCS and HIES.  On top of this all our customers receive the Renewable Heat Incentive; this is an amount far greater than the Grant.  But G.H.G.S. refuse to recognise the expertise of these organisations that have been in existence a lot longer than them.  They have their own (lack of) expertise and they are only prepared to listen to themselves. 

THEY ARE REINVENTING THE WHEEL AND THEY ARE

STARTING WITH A TRIANGLE!

At this rate by March 2022 (when the grant finishes) there will be a lot fewer companies installing and a lot fewer tradesmen and a serious shortage of equipment.

The Green Homes Grant Scheme needs to be told they have to give Grants.  They need to be given a target of 90% within a month of application and a good and full explanation to this Committee as to why they refused the other 10%

I was talking to a large supplier of Spray Foam to the installers this week.  He told me the last quarter of 2020 was one of the worst quarters he had ever seen with sales down on the previous 2 quarters and lower than the last quarter for the past 4 years.  This is a direct result of G.H.G.S strangling the market (his words).  His buyers are all suffering

A colleague who runs an installation service had 6 teams of Heat Pump Installers at the start of September, fully booked until the end of the month with new jobs coming in daily.  He now has 2 teams working ¾ time.  He has let go 7 people from his back office

These are real people losing their jobs.  This is the real truth of the market.

As of 15 Jan 2021 we have applied for £33,666 from the G.H.G.S. and received £0.  This is an unsustainable position.  As well as starving us of work the G.H.G.S. is also starving the industry of cash.  We understand no one else is being paid either so the market is going to grind to a halt very very soon.

There is a desperate need to get someone in to the G.H.G.S. who understands business and Green Homes.  I have seen a webinar with G.H.G.S. represented and they are so busy patting themselves on the back about what a good job they are doing that they don’t have time to see everyone struggling around them

Basic Common Sense would go a long way.   But G.H.G.S. is run by Civil Servants, they are paid no matter what, what do they care if the market is destroyed and people lose their jobs?  It seems they don’t as long as they follow the rules they set out for themselves then all is well for them.  God help us!

USE THE SUN

Use the Sun Ltd was incorporated in November 2009

We are accredited by

-         M.C.S. (Microgeneration Certification Scheme)

-         H.I.E.S.

-         OLEV

-         Tesla

-         Trustmark

To instal

-         Solar PV

-         Air Source Heat Pumps

-         Solar Thermal

-         Batteries

-         EV Car Chargers

-         Spray Foam Insulation

We are a small family run company, employing 5 people directly and (until recently) 40 or more indirectly. 

ME PERSONALLY

I am the founder of Use the Sun Ltd (now a 50% shareholder and semi-retired)

I have a number of Buy to Let properties, 3 of which are suitable for A.S.A.P..

I have applied for the grant for 3 of my properties.  I am resigned to the fact that they won’t be granted because G.H.G.S. main aim is to reduce the number of A.S.H.P.s installed

Their attitude makes no sense to anyone in the market other than themselves.  3 homes not going Green because G.H.G.S. have invented a rule to stop it!

ACCREDITATIONS

What I don’t understand is we have been M.C.S. accredited for 11 years.  Why is that not good enough?  For 11 years we have completed the annual Audit and filled in the forms.   Everything G.H.G.S. needs to know is there.  A look at the certificate will tell them when and where it was installed.  I am not about to risk my business by making up fraudulent installations

We are members of H.I.E.S., we buy insurance from them for every one of our jobs.  Sometimes they randomly phone our clients.  I am not about to risk my membership and my business by making up jobs or doing them badly.

G.H.G.S. ignored the industry experts and instead made us join Trustmark.  We completed paperwork and paid a fee but there is no benefit gained, just time and cost expended.  

11 years we have satisfied the experts employed by MCS and HIES at the annual audits.  And along come G.H.G.S. and treat us like children

HOW MUCH IS THE GRANT WORTH?

Actually, nothing for A.S.H.P..  

The Renewable Heat Incentive (R.H.I.) is calculated based on calculations we submit

Anyone receiving the Grant has their R.H.I. reduced by the amount of the grant

The only advantage is cashflow.  £5k off now or £5k over the next 7 years.  Either way Grant plus R.H.I. = R.H.I.

Grant zero R.H.I. is 100%

Grant £5k RSI is 100% less £5k

TIME FRAME

PRE GREEN HOMES GRANT SCHEME

We survived the lockdown and were enjoying a purple period.  Our sales team was increasing and we were up to 2 to 3 instals a week and booked for the next 4 weeks, with new sales coming in daily. We set ourselves a target of 5 to 6 instals a week by the end of January and set about finding and training a third team.  We took on another surveyor and more back office staff.

SALES PROCESS

In September it was announced that from October a Grant would be available for the installation of Air Source Heat Pumps.  Although details were initially sketchy the majority of our booked installations asked if they could put their installation on hold while they applied for the grant.  It would have been more sensible to announce the Grant when they were ready to grant it and not weeks before!

This was an obvious result of the announcement.  G.H.G.S. doubly insured that all installations should stop by also saying that M.C.S. and H.I.E.S. accreditation was not enough we also needed Trustmark and that any job started before the voucher was approved would not be entitled to a grant neither.  And a whole host of other rules to stop anyone reciving the grant.  And they were not ready so no one got the grant anyway and the industry shuddered to a stop.  Lack of planning, lack of preparation, the industry suffered whilst those responsible for the disaster carried on getting paid.

It is as if they specifically wanted all jobs to stop until they themselves decided that the jobs could carry on.  This level of arrogance is repeated again and again at the expense of the industry.

They also insisted we join Trustmark.  We are M.C.S. and H.I.E.S. accredited, these are 2 experts in the field of Renewable Energy but G.H.G.S. (not an expert) insisted we pay to join Trustmark (not an expert). 

It is appropriate to emphasise.  Before G.H.G.S. existed the market was good and growing.  Once G.H.G.S. made their announcement the industry started to die and is getting worse by the day.

ON RELEASE

On the 30th September the form was released and I completed it 3 times, once for each property that I own (nothing to do with Use the Sun Ltd).  

G.H.G.S. designed the form we filled in.  I completed the form 100% uploading everything I was asked for.  I should have no problem

Personally, I though the form was a little light but frankly all they needed to say was send us a copy of the M.C.S. certificate and we will send the grant

OCTOBER

I phoned mid-October to be told that they had a lot of applications and it would be a while.

No vouchers were issued to anyone in October (I have made an FOI request to check that).  Industries like mine, Air Source Heat Pumps (A.S.H.P.) but also other industries, i.e. insulation, found they had gone from mid-September to the end of October with practically no installations as all their customers awaited vouchers.

This is an unsustainable business model

G.H.G.S. have set themselves up as Jury, Judge and Executioner.   They have added unnecessary complications, extra layers of admin.  They have no knowledge or experience of the industry and yet they are dictating terms.  A colleague in insulation spent £10,000 getting ready, he increased his price to reflect the extra workload and has not received a single voucher.  He estimates G.H.G.S. cost him £40k and he is walking away while he still has a business.

Not a single voucher in October – 6 weeks with our work stopped

If only they had made the announcement at the end of October, we would

have continued to install through September and October

All of our installers are self-employed, we can only offer them 1 or 2 jobs a week, they are all highly qualified so they are free to do plumbing or electrical work elsewhere when we can’t use them.  3 or 5 days a week wages lost, profits lost, back office sitting idly looking for work, not a single voucher for anyone

NOVEMBER

10th November, over a month since I applied, we get the first message

Thank you for applying to the Green Homes Grant Scheme. Vouchers are now being issued. ……

You can only begin work once your voucher has been issued. Any work that was started before that date cannot be claimed under the Green Homes Grant Scheme.

I expected to receive my vouchers imminently.  I wrote right back and heard nothing more

Not a single voucher in November – 11 weeks with our work stopped

We decided to keep paying the back office staff from our reserves until after Christmas.  As for our subcontractors we kept in touch and they were finding work but they did not have the networks and they cannot command the same level of payment as they can when fitting A.S.H.P.s, it is a very skilled job.  They were looking at a bleak Christmas

I am awaiting the results of my FOI request for numbers of applications and numbers of vouchers issued.  I understand some vouchers were issued though, at the time of writing, I believe those installers are still waiting for payment

On the 19th November I wrote to them again chasing up an answer.  Now over 2 months.

DECEMBER

On the 17th December, having not had any response to my previous email I wrote to them again

On the 21st December I wrote again complaining that they did not respond.  This time I got an answer

We are sorry you have not heard yet from your applications. We are working

 through applications at the present time, we do thank you for you patience.

Patience  My company is dying, my staff are losing wages what is there to be patient about?

On the 21st December I was asked for my Land Registry details.  I see this as no more than a way to deflect but I supplied them. 

The address of the property and my name are clearly displayed on the Land Registry Titles

Their first response

Could you please state which document needs to go to each application.

On the 24th December I again chased up the G.H.G.S., 3 months now and still no progression

On the 24th December between 8pm and 10pm I received 3 almost identical emails.

The last email tells me

We have been unable to verify your identity from the information

you provided on the application form

As this is on neither of the previous emails should I assume that their ability to identify me fluctuates.

BTW I am the only Charles Montlake in the world, google it if you don’t believe me.  I have lived at my current address over 6 years. I have bank accounts, credit cards, mortgages, I am identified at companies house, pay tax etc etc. It requires a certain incompetence to have a problem confirming my identity.

In the other two emails they wrote

We have been unable to verify that you own the home where

you have applied to install the GHG measures

I sent them the Land Registry document; it seems enough to identify one property but not the other 2??

I sent back my identification plus proof of mortgage on all 3 properties as I am well aware that if I did not they would simply ask for that next

I have one question for the Committee, if I did not own the properties why am I installing A.S.H.P.’s?   Is this some new strange philanthropic side to me where I go installing A.S.H.P.s on other people’s properties?  What is the logic?

They also wrote

Also, upon review of your application, the quote you

submitted for Air source heat pump is higher than we

would have expected based on average prices for work

of this kind…… if you are unsure, do seek an alternative quote.

Firstly, In a phone call to come soon they will admit that it is not possible for their staff to have expertise in every technology.  So they don’t know what they are talking about

Secondly they are saying I am overpriced (which I am not, see below) which is libellous and ruinous to my reputation

Thirdly I have invested 2 days in preparing that quote, it is unsustainable for a Government organisation with no expertise to tell my customers to get quotes elsewhere.

Talking to various installers in various industries they are all talking of boycotting the scheme.  We can’t afford to advertise, call people, go to their houses, send round a surveyor and upload all the details only to have G.H.G.S. tell our customers to go elsewhere. 

I have been accredited for 11 years with M.C.S. and R.E.C.C. or H.I.E.S. they have never suggested we are overpriced (but then they know what they are talking about).  Suddenly we now have this disaster of an organisation telling people we are overpriced to obfuscate their incompetence at not issuing vouchers.  They are blaming the company and insulting the company to its clients to hide their mistakes.

I spoke to M.C.S. they wrote back

We are aware of the email that has been sent to numerous installers. We have

queried this with BEIS and will be sending out communications as soon as we receive more information on the matter.

This is a crazy situation, the organisation which claims to not be able to have expertise is ignoring all the experts in favour of their own opinion.

I am currently taking legal advice; I am sure this is libel and, with everything else, is going to destroy the reputation and very existence of my once fabulous company. 

Neither H.I.E.S. R.E.C.C. or M.C.S. have ever implied we are over priced

G.H.G.S. have written this invidious email to my customers without checking one single fact.  They are making up rubbish and emailing untruths.   Our customers are insulted, they are spending north of £12k and now they are being told they are too stupid to check they are not being overcharged and they need G.H.G.S. to remind them of how to behave.   DISASTER does not even come close to describing this horrible destructive organisation

Not a change in Feed in Tariff, Economic Melt Down or

Global Pandemic has hit my company as hard as

the Green Homes Grant Scheme

Their job is to promote the industry, they are killing it, telling customers they are being overcharged

More they are insulting us and our customers with no thought of how it is affecting the market they are meant to be helping but are actually destroying!

We have now received 5 of the 48 vouchers our customers have asked for.  From our friends in the industry, we understand that between 10 and 20% is normal! 

30th December

I wrote again.  I have supplied everything they have asked for within hours of being asked, 3 months have passed and there is no resolution in site

I got a phone call, we have a new time wasting, grant blocking TWIST.  Arghhhhhhh   the frustration

CLAUSE 14 SUB SECTION 4 OF THE TERMS AND CONDITIONS

I don’t know what it is exactly but it blocks me from having my own company do the installation.  

I own a brilliant company, 11 yeas old, annually audited, top class client list and never a problem and G.H.G.S. say I have to go to my competitor??

I am not about to ask my competitor to fit my A.S.H.P., that is just crazy talk from an organisation who are looking for reasons to destroy the industry

This is irrelevant anyway, I applied in the name of Charles Montlake and not in the name of Use the Sun Ltd. I am taking legal advice on this.  Salomon v A Salomon & Co Ltd [1896] lays down the case law separating a company from its owners and operators.  I am not convinced that G.H.G.S.  are allowed to overturn this law

I can understand they wanted to stop one-man band plumbers buying a cheap A.S.H.P. and installing it and claiming £5k.  But if they would read their own rules and regulations installers have to be a member of M.C.S. and H.I.E.S. or R.E.C.C. to receive the grant, which takes months.  It just does not make sense

They may be worried that I would give it to myself cheaper.  Why should that bother them?  Also that would be against VAT rules.  So now G.H.G.S. are claiming they know more than M.C.S. H.I.E.S. R.E.C.C. and HMRC whilst claiming to have no expertise in any of the fields.  

THE REST OF THE CONVERSATION

It was a long chat as we went through all of the other non-issues that exist.  My ID, how many times I have to prove I own the property (just in case I am randomly putting in £13k systems in to stranger’s house I guess)

We did discuss the email.  I was told that it did not say we were overpriced or that customers should go elsewhere.  I could not convince the lady that is what all our customers were saying to us it said and they were all insulted that G.H.G.S. should say such a thing after they had done their research and chosen their supplier

I asked what they were comparing our price with, she did not know

-         I explained we charge just under £700 for an MMSP, she did not know what that was or if the other suppliers also included it, as she explained they could not be expected to be experts in every field (expert enough to refuse vouchers and send insulting libellous emails, not expert enough to understand what they were talking about).   I explained that the MMSP (a controller for the system) is so important that it increases the R.H.I. by £1,500

-         I asked her who we were being compared with and what their price was.  She did not know

-         I asked her if the other installers also change radiators (best practise but not required) she did not know

-         I asked if the other installers included an Insurance Backed Warranty (again best practise but not required) she did not know

HOW can they send an email saying we are overpriced when they don’t know what we sell and who to compare us to?

CONSISTENCY

A friend of mine decided to apply for the grant for his own house.  He applied after me,

His paperwork is identical to mine having been prepared on the same proprietary software that we use for every job (as many people do).  This contract is agreed by M.C.S. R.E.C.C. and H.I.E.S. and meets all the legal and regulatory requirements.

-         His proof of ID was acceptable, my proof was not

-         His proof of ownership was acceptable, mine was not

-         His contract was acceptable, mine was not

-         His price (£12,900) was acceptable mine (£12,900) was not

His voucher was granted and the system was installed.  I am no nearer to having my voucher granted now than I was in September 2020 when I applied

The only similarity is that we were promised we would be paid the voucher in 5 days; it is now 15th Jan and the installation was completed and reported 22nd Dec and we have still not received the money and, like other people I have spoken to, no expectation it will come soon

Just another way G.H.G.S. are choosing to destroy the market, exasperate their refusal to give grants and make sure the installers go broke

CONCLUSION

We have already lost half our staff and more will have to go

Set a target of 90% of vouchers to be granted within a month or close the scheme and let us get on to what was a prosperous growing industry pre the announcement

OR

See the industry decimated between now and (god help us) March 2022

January 2021