Help to avoid a bad heat pump installation

 

Follow our guidance to avoid the pitfalls of poor heat pump installations

As we ramp up the installation of renewable energy systems - air source heat pumps in particular - so more of us will embark on a brand new heating installation journey. Unfamiliarity and low technical standards amongst some operators means you are at risk of spending a lot of money on a renewable energy system that is not suitable for your home or does not operate as cheaply as promised.

The good news is that a framework of consumer protection exists to make sure you carry as little risk as possible, but it only applies if you use certified installers/companies and those certified installers/companies follow the right procedures. In this blog we take you through the measures in place to protect you from bad installations, what to check before you buy and the minimum standards certified installers must meet in their service to you. Our aim is for you to avoid a substandard installation. If you already have a substandard installation we provide guidance here.

Contents

1. Introduction
2. Let’s start with MCS registration - they’re a bit like Gas Safe
3. Picking the right MCS certified installer
4. ‘Consumer Codes’ and how they protect you
5. The role of the installer’s Certification body
6. Insurance backed guarantees and their limits
7. Mini summary - steps to getting it right
8. Get 1-2-1 help

1) Introduction

Most of us are at least a little familiar with gas and oil systems. We know where the boiler is, where the thermostat is and could name a few household boiler brands. We know how to get three quotes and we know we can complain to Gas Safe (formerly Corgi) when things go wrong. In short it is a highly ‘evolved’ market that has been 40 years in the making.

Buying a renewable energy system is a lot more difficult to navigate. There are far fewer operators and we are much less familiar with what the technology entails in terms of equipment and how it all works. This coupled with horror stories of heat pumps being removed because they are too expensive to run and/or did not keep the house warm makes it seem a risky business.

Heat pumps are in fact a good replacement heat source for many homes and with the right advice and right installer you are well protected from substandard installations. Consumer codes, insurance backed workmanship guarantees and deposit protection schemes are designed to remove as much risk as possible for households taking a leap of faith with these new technologies. When the system works well, you should even be advised when the technology is not suitable.

BUT, for you to be protected you must use a company certified by all the relevant organisations with a track record for quality work. Just like the gas industry, the quality of installation will vary from outstanding to incompetent. The work you put in at the beginning, by following our guidance, will mean you are much less likely to need to use the complaints procedures.

2) Let’s start with MCS (they’re a bit like Gas Safe)

The Microgeneration Certification Scheme (MCS) is what is known as a ‘quality assurance certification scheme’ for the installation of renewable technologies. MCS certified installers must meet the qualification criteria for membership and agree to uphold the high installation standards set by MCS for the technologies they fit. When you use an MCS certified installer, MCS will issue you with a certificate to confirm compliance with their standards on completion of the installation.

Of course, using an MCS certified installer does not guarantee that these standards will be met (as is the case for all such schemes). MCS installers self-certify compliance (as gas installers do) which means the installation is generally not checked by a third party. (Exceptions are the annual surveillance check at renewal and random inspections.) Never-the-less, the odds are much better that you do get a high quality installation and you are protected when an installer fails to meet these standards.

Unlike Gas Safe, it is not mandatory for renewable energy installers to be certified by MCS, however to claim the Government grants you must use an MCS certified installer/company. Mortgage companies and home insurance providers also increasingly require an MCS certificate to demonstrate that the renewable system meets an industry standard.

As well as setting technical standards, MCS requires installers to provide you with documents that give a clear understanding of cost, efficiency, performance and operation. Good conduct is a core part of membership. All MCS certified installers are required to sign up to one of two consumer codes (RECC or HIES) each of which offer significant levels of protection for households. MCS installers are required to be honest - never overstating savings or performance - and to advise you when the technology is not suitable. Importantly they must never promise energy savings for mains gas customers moving to an air source heat pump.

In practice the lure of Government grants and the resulting boom in sales draws less scrutable operators into the market who are not sufficiently technical and incentivise salespersons to sell installations. This is where things can and do go wrong. Whilst there are provisions in place to remove harmful operators from the market, there is always a time lag. It will take disgruntled customers of fitted technologies to go through the complaints procedures before such companies are stripped of their membership.

It is not a perfect system clearly, but it is still important that you use an MCS certified installer as you stand a much better chance of securing remedial works or a full refund via the consumer code dispute resolution process (see section 4 below).

Other points to note:

Installers are certified by MCS for each individual technology, e.g. air source heat pumps, solar PV, solar thermal, battery storage, ground/water source heat pumps. You must check the installer you use is certified for the renewable technology being fitted.

Manufacturers’ products (heat pumps, solar panels etc) are also listed with MCS. They too must meet a minimum standard for efficiency and quality. Again it is not mandatory to use a MCS product, but you will need to do so in order to claim Government grants.

3) Picking the right MCS certified installer

Our primary advice to you is to use an MCS certified installer, but in our experience this alone is not enough to guarantee a good installation. The purpose of this blog is to get it right first time and not have to rely on a complaints procedure due to a poor buying decision. In our experience, the better operators are those that do not use subcontractors, rather the person carrying out the survey and quote is the person who will install your heat pump.

It is important to make a distinction here between heat pump companies that use salespersons/subcontracted labour to deliver the works and local independent heat pump installers who use an ‘umbrella company’ where they are classed as a subcontractor. Local heat pump installers use umbrella companies to handover responsibility for administering the requirements under MCS, which can be a burden for sole traders and small businesses. Your main contact will likely be with the installer and they will still fit your heat pump, however the umbrella company will be fully responsible for the works and this is important to remember should you need to raise a complaint (more under section 4 below).

Based on our experience, there are broadly three types of operator:

• Sole traders who are MCS certified in their own right, i.e. the person coming to survey your house is the person fitting the renewable technology. However MCS certification can present a barrier for some sole traders and this prevents many excellent installers entering the market.
• MCS certified businesses, i.e. small local companies of employed installers working under the company's MCS certification.
• 'MCS umbrella schemes' whereby the MCS certification is held by a company, but they subcontract the installation works to a non-MCS installer. In this set up your contract will be with the MCS umbrella company and they will be responsible for the design and certification of the heat pump. The MCS umbrella company remains responsible for the entire installation and must create the certificate for your installation via their own MCS user account. They must also give you the name of the subcontractor and describe what work they will do.

Our insider tip is to make sure the person coming to your house and quoting you for the works is the installer (even where they use an umbrella company) or an ex-installer in an off-the-tools role. If the only person who can attend is a ‘technical salesperson’ - who does not have any experience of fitting the technology themselves - decline the visit and keep looking. We’re not suggesting they are all bad, but this is about reducing the risk to you, so stick with experienced installers.

4) Focus on umbrella schemes

Whilst your initial contact may have been with a local installer, if they use an umbrella company to certify the works the umbrella company assumes full contractual responsibility for the design, performance and installation of your heat pump. This is the same where you go to the umbrella company directly and they assign you a subcontractor. NB where you are assigned a subcontractor the umbrella company must also give you the name of the subcontractor and describe what work they will do.

Who do you pay for the works?

It is increasingly common practice for umbrella companies to split the cost of the works between the equipment, which they supply, and the labour charges of the local installer. I.e. you pay the installer for their time and the umbrella company for everything else.

It is not clear whether this is a valid approach under the MCS standards but it is important to emphasise that this separation of payments is not a separation of responsibility. The umbrella company is fully liable for the whole of the works, which extends to the workmanship and even negligence of the local installer, irrespective of whether your relationship began with a local installer or the umbrella company.

At the end of the installation, it is the umbrella company that creates the certificate for your installation via their own MCS user account, provides the handover documentation and claims the grant voucher. It has come to our attention that some umbrella companies are withholding the handover documents until they have received the government grant. MCS companies must issue the handover documents promptly once the system has been commissioned irrespective of whether they have received the final payment instalment.

5) Consumer Codes and how they protect you

MCS certified installers must be a member of a Chartered Trading Standards Institute approved consumer code. Consumer codes set out and enforce high consumer protection standards for selling, leasing and installing small-scale renewable energy systems. They are specific to renewable energy systems but closely follow the consumer protection laws already in place.

Only two consumer codes are approved for the installation of small scale renewable energy generating systems: Renewable Energy Consumer Code (RECC) and Home Insulation & Energy Systems Contractors Scheme (HIES). To be absolutely clear, all MCS approved installers must be members of RECC or HIES. You can check their membership via their websites (all links are at the end of this blog). Installers that are members of HIES do not have to also be members of RECC. HIES membership will qualify them to fit renewable technologies.

Both consumer codes broadly set the same standards with some slight differences. These cover most aspects of your journey and are designed to prevent high-pressure sales techniques, over-promising on financial benefits, losing money and suffering the effects of a bad/inappropriate installation. Under the consumer code the MCS certified installer must provide you with a compliant contract, undertake a technical survey and make clear that you have a cooling off period. NB if you use a local installer who works with an umbrella company, your contract will be with the umbrella company.

MCS contract

MCS certified installers must provide you with documentation that provides a breakdown of installation cost, equipment, performance and grants available. This will include a prediction of energy costs which must be based on actual use and current energy prices (electricity is 25p per kWh). These will form your contract documents and must be provided before you sign the contract. The contract must comply with the consumer code.

Technical survey

MCS certified installers must carry out a full technical survey and they may do this before or after you sign the contract. The technical survey includes a room by room heat loss calculation to more accurately understand if your radiators need to be upsized or predicted running cost needs to be adjusted up or down. If they carry out the technical survey after you have signed the contract, they must update your contract documents with the results of the technical survey.

14-day cooling off period

Both consumer codes require MCS certified installers to give you a 14 day cooling off period after you have signed the contract in which you are entitled to a full refund if you change your mind. Failure to notify you of your 14 day cooling off period is a consumer code breach and will likely void the contract.

When the 14 day cooling off period starts depends on where you signed the contract. If you signed it in the home or away from the MCS certified installer's trade premises, you can cancel the contract up to 14 days after the last item of equipment is delivered to your home. If you have signed the contract at the MCS certified installer's trade premises you have 14 days from the date you signed the contract.

If your contract documents were updated following the technical survey you also have an opportunity to cancel the contract afresh at this point and obtain a full refund.

Complaints

Both RECC and HIES will enforce the terms of their approved codes with their members in the event of a breach and will handle complaints against their members on your behalf. They can use their powers to award compensation, require remedial works or require a full refund where the installation was completely inappropriate. For more on raising a complaint read our other blog.

6) The role of the installer’s Certification Body/Competent Persons Scheme

All MCS certified installers must be a member of a UKAS-accredited Certification Body (which are also Competent Persons Schemes for the purposes of building regulations). The approved Certification Bodies for renewable technologies are NICEIC, NAPIT, HETAS, OFTEC, ELECSA and APHC, i.e. an MCS certified installer must be a member of one of these schemes.

Certification Bodies require installers to hold appropriate qualifications and/or experience to fit a renewable technology correctly and to work with care and skill to uphold their standards of workmanship and safety.

Under the Competent Persons Scheme aspect of membership, MCS certified installers are able to ‘self-certify’ their work meets the standards set by building control regulations (just as they would do for gas and larger electrical works). This means that someone from the local authority does not need to visit your home to check their work is compliant, as is the case for other building works. The installer will instead register the renewable installation with their Certification Body and they will send a compliance certificate to you and the local authority. This must be done on completion of the works before handing over the installation to you. NB compliance certificates must be retained for a future property sale and will likely be required by your home insurance company.

7) Insurance backed guarantees and their limits

It is a requirement of the consumer codes that MCS installers protect your deposit, advance payments and their workmanship in the event they cease trading via a specific type of insurance policy. These policies are designed to refund you any money you have paid out in advance of the works or for another installer to finish the works if the installation is incomplete, however they do not protect you from a substandard or mis-sold installation. There are three work phases during which the installer might cease trading:

Works have not started: If you have paid a deposit but work has not started before the company goes into administration most insurance providers will identify an alternative installer to install the technology for the same price as agreed in your contract with the original installer.

Works are incomplete: If you are in possession of unfitted equipment or will be in possession of equipment once the administrator/liquidator has completed their audit (in the event your deposit money was legitimately used to buy the equipment which is stored at MCS installer’s premises and they are owned by you as set out in the contract) the policy will cover the cost for the equipment to be fitted.

Works are complete: The insurance-backed guarantee will only cover damage incurred during the installation process (as set out in the workmanship guarantee) and will only be valid for the same period as the (minimum 2-year and up to 10 years) workmanship guarantee would have been valid for. To be clear, these policies do not cover claims for substandard installations if the installer has ‘completed’ your works and is still trading. Refunds and claims for substandard installations by trading MCS certified installers must be directed to RECC or HIES.

There are a number of policy providers, and the terms of the policy will vary. For example,

• Period of cover to claim against damage incurred during the installation – most are up to 10 years but some offer 2 and 5 year options
• Length of cover for deposit protection – most are capped at 60-90 days but can be extended if necessary if for example there are supply chain issues delaying the installation date.
• Maximum amount for the works insured – commonly £30-50k
• Time limit for reporting defects – usually within 30 days of discovering a defect
• Some policies will not pay out if the installer goes into voluntary liquidation
• Some policies will not cover costs that can be recouped via other means, such as a credit card

It is really important that you check the extent to which you are covered under the policy offered by the installer. They must take the policy out on your behalf once you sign the contract and provide you with the documentation.

8) Mini summary – 8 steps to getting it right

It is an unfamiliar process, but with the right help you are well protected and it is easy to avoid the big pitfalls. We have summarised our guidance here to help you reduce the risk of paying out for a substandard installation with no chance of getting your money back:

1. Pick a MCS certified installer that is listed on the MCS website or check that your local installer’s umbrella company is listed on the MCS website. It is important to check the MCS website to ensure their membership is current. You may need to find out the limited company name if it is different from the trading name. Also check that the company is certified with MCS for the technology you want to fit.
2. Make sure the person visiting your home is the installer who will fit the heat pump or an ex-installer in an off-the-tools role.
3. Make sure you receive all the information about the installation before signing the contract, including all costs, performance and grants.
4. Check which consumer code the company is a member of – RECC or HIES – and check the RECC or HIES website to make sure the installer’s membership is current.
5. Check which Certification Body the installer is registered with: NICEIC, NAPIT, HETAS, OFTEC, ELECSA and APHC.
6. Check which insurance-backed workmanship guarantee provider they use and check the terms of the policy.
7. Ask to see some case studies of their work.
8. Do not rush. This is a big purchase and you need to get it right. MCS certified installers are not allowed to harass you or pressure you into a sale or offer big discounts for quick sign ups all of which is set out in their consumer code.

9) Get 1-2-1 help

As ever we endeavour to provide high quality, genuinely useful information that is free to access via our website. This blog does not cover technical help selecting the right product for your home. We provide impartial and expert advice on a 1-2-1 basis and referrals to excellent installers. Find out more here or Contact us with your enquiry.