A press ad, seen on 6 April 2012, included the text "EARN UP TO £1,500 A YEAR TAX FREE, AND FEEL GOOD ABOUT THE DIFFERENCE YOU'LL BE MAKING TO THE ENVIRONMENT AS WELL AS YOUR BANK BALANCE. Invest in a Sunsolar Energy system for your home or business and start reaping the benefits immediately".
The complainant challenged whether the claim "EARN UP TO £1,500 A YEAR TAX FREE" was misleading and could be substantiated.
Sunsolar (Sunsolar) provided details of the electricity generated from a 4 kW retrofit scheme based on a "perfect install" with the “maximum Photovoltaic system” and stated that 3434 kWh of electricity would be generated per year resulting in a total annual benefit of such a scheme of £1778.81. They stated however that the chance of this being exceeded was extremely unlikely which was why the ad had included the claim "up to £1500 a year tax free". They quoted from a utilities price comparison website stating that the average household used 3,330 kWh of electricity per year costing around £585 and that a system with 12 solar panels would generate 2960 kWh of electricity per year, 37.5% of which would be used by the household. The quoted website also stated that the average household would use 1110 kWh of electricity meaning that they would have to buy 33.64% less electricity resulting in a saving of £176.93. With regard to the Feed-in Tariff (FiT), the solar panel household would earn 21p for every unit of electricity generated plus £0.03 for every unit sold back to the grid and that based on those figures (savings plus earnings), households would generated total FiT earnings of £677.10 resulting in a total saving of £854.03.
Sunsolar said they were also members of a scheme upon which their calculations were based and that this could be used to demonstrate the authenticity of the claim. They said that based on information from a third party, customers could obtain a typical return of £1190 a year on a 2.9 kW installation which, when broken down, showed that £1060 came from the generation tariff, £40 a year from the export tariff and £90 a year reduction on the pre-installation electricity bill.
The information supplied by Sunsolar demonstrated that various schemes and energy websites reported the average amount of electricity that could be generated from a 2.9 kW solar system along with the subsequent savings and money generated from FiT and therefore the potential earnings that could be achieved from such a system. We noted, for 4 kW retrofit systems (such as the one that was used as the basis of Sunsolar's calculations) with an eligibility date on or after 1 April 2012; the higher rate FiT (with an Energy Performance level of D or better) was 21p for each unit of electricity generated. However, Sunsolar did not provide documentary evidence (including from existing customers who had used their 4 kW systems) to demonstrate that their solar systems typically generated 3,434KwH per annum and that the basis for the typical savings/earnings claims were therefore as stated. Furthermore, even if the 3434 kWh per annum could be regularly achieved through the 4 kW system, we noted the calculations did not demonstrate that at a 21p FiT rate that applied when the ad was seen by the complainant, the £1500 yearly earnings rate could be achieved.
Furthermore, we understood that where systems had an eligibility date on or after 1 August 2012, the FiTs would change to new rates, none of which were as high as the one that was used as the basis of the earnings claim in the ad. Therefore, whilst it was possible that installations made between the ad's publication and 1 August 2012 could achieve the 21p FiTS rate, we considered that the ad should have included information to indicate that for systems with an eligibility date after 1 August 2012, this rate was going to change to 16p per kWh. We concluded that the claim "EARN UP TO £1,500 A YEAR TAX FREE" had not been substantiated and that the earnings claim had been exaggerated and was misleading.
The ad breached CAP Code (Edition 12) rules 3.1 3.1 Marketing communications must not materially mislead or be likely to do so. (Misleading advertising), 3.7 3.7 Before distributing or submitting a marketing communication for publication, marketers must hold documentary evidence to prove claims that consumers are likely to regard as objective and that are capable of objective substantiation. The ASA may regard claims as misleading in the absence of adequate substantiation. (Substantiation) and 3.11 3.11 Marketing communications must not mislead consumers by exaggerating the capability or performance of a product. (Exaggeration).
The ad should not appear again in its current form. We told Sunsolar not to make claims for which they did not hold robust substantiation.