Monday, 15 September 2014

The MCS Hoard

So here's an interesting thing about the Microgeneration Certification Scheme  (MCS)

The MCS is supposed to be self-funding, with fees applied on a 'per-registration' basis with these fees currently set at £15 per registration.  MCS installation companies also pay £110 annual fee, collected through the Certifying Body that accredits the installer.

Gemserv administers the scheme, and its latest annual report show that MCS has a surplus of £6.6m at the end of March 2014.

Indeed, the surplus grew in the most recent financial year by £1.3m, so this is not purely an artefact of the dash for PV of late 2011.

Figures for the number of installations the registered on the scheme database are available from the MCS website and show this:

So there were 122 thousand installations in the same period that the scheme ran a £1.3m surplus, corresponding to £10.65 of surplus per installation.
All this begs the question, why?  Why is the scheme building up such a large surplus, when its terms of reference are to be no more than self-financing?  What's all this money for?  How does MCS anticipate spending it within its terms of reference?
I'm personally not against accumulating some money from each installation if it's spent for the good of the whole industry, but just saving it up for a rainy day?  What use is that to anyone?
How would you spend it if you were in charge of the MCS?  Would you just lower the registration fee, or would you be happy to keep paying the extra, were the money to be spent on something useful.  Write in the comments below...


  1. If MCS plan to do nothing then they clearly need to reduce their registration fees! If i was at MCS.....

    ...Cash-back grants (e.g. RHIPP) would be a popular (and welcome) use of this hoard. (As the surplus is primarily funded by Solar PV registrations it could be seen as unfair to use it to raise awareness for less popular technologies)

    ...Alternatively, invest it in online MCS compliance management software, including design tools for each technology, which would improve installer efficiency (less days spent on mounds of paperwork), improved certification assessments, guaranteed quality of customer handover packs, etc etc. These would be made available for free to all registered MCS installers, whom I'm sure would be more than happy to pay a surcharge on top of MCS running costs to administer.

  2. Spend a large part of it on rigorous enforcement, inspection visits to a percentage of all installations carried out by each company, then more in depth investigations of companies where repeated faults are found, and enforcement action against those found to be contravening the regulations - and not just the MCS regulations, but particularly the RECC regulations as well.

    I know for a fact that there are at least tens of thousands of solar pv installations out there that have incorrectly sized AC cables, meters fitted into the lofts, and a fair few with panels over hanging gutters / ridges / gable edges.

    The CPS schemes have insufficient funds, and a conflict of interest in investigating and enforcing the regulations on the companies that are registered through them. MCS has no such conflict of interest, it's interests lie in rigorous enforcement of the regulations across the board.

    The state of enforcement in this industry is ridiculously low, and the fly by night companies have taken advantage of this to allow them to get away with shoddy installation practices and shoddy sales tactics for too long, and allowing them to undercut companies who are doing things properly.

    Also further funding into research into improving performance and spreading best practice or similar.

    or they could just sit on a great big cash pile while allowing the industry to go further down the toilet.

  3. Reduce costs for the smaller businesses that only carry out a few installations per year, there are thousands of installers that may want to install systems for their customers to claim RHI but have to sub the work out to a larger MCS registered company. If MCS have a surplus it's obvious they're charging too much and stifling the industry.

  4. Astonishing, thanks for providing these details. Shared & connected on G+

  5. Thanks for the exposé Stuart!

    I doubt MCS has a plan for the cash. It's the government's scheme, set up out of necessity because the industry couldn't be bothered to set up one of their own, and largely neglected?

    Obvious opportunities:

    1) set up your own scheme and pocket a cool £500k/annum by undercutting MCS slightly and maintaining the current notionally-ticking-the-EU-box standard within the industry: the original purpose of MCS.

    2) set up your own scheme to attract the top notch providers; taking the best bits of the MCS standards with you but with far higher installation standards. Keep it cheap for the good guys with rebates for conformance (effectively punitive penalties for nonconformance).

    3) take over MCS when Gemserv's licence expires in October 2015 and tun it yourself with in line with (1) or (2) as applicable When is it up for tender?