San Lawrenz renewables zeal leads to grant scheme probe

A solar panel supplier, who came up with a scheme with the San Lawrenz local council to encourage residents to take up government subsidies, is insisting he was simply "sponsoring" the village and not doing anything illegal.

Godfrey Formosa, from D&G Projects Ltd, together with mayor Noel Formosa devised a scheme to enable people from the small Gozo village to invest in photovoltaic panels for just €1,000. The scheme was based on the government’s refund policy to give back 50 per cent of the cost price for a maximum of €3,000.

San Lawrenz residents were given the option to pay €4,000 and still receive the maximum government refund of €3,000 by having the price on their invoice inflated to €6,000, which Mr Formosa claims was the actual cost of the system.

"This was a marketing strategy. We chose to offer them at €4,000 and fork out the other €2,000 ourselves," he said.

Eighty of the 416 who applied for the government scheme came from San Lawrenz, which had about 600 inhabitants.

After receiving a number of complaints from other renewable energy suppliers, the Malta Resources Authority decided to suspend the scheme and later called for a police investigation.

Mr Formosa insists he did not break the law because the MRA’s rules did not rule out sponsorships. His company used this marketing strategy and other companies made similar offers by offering free solar water heaters or reverse osmosis equipment with PV panels.

"Later, we got expert advice to see if we were doing something unethical and we were told the money for the PV system was coming from the EU. The EU has strict rules about sponsorships and benefits, so we regularised our position," he said, without specifying what action was taken.

He added that a similar scheme was employed by other companies last year to offer San Lawrenz residents good prices to encourage them to take up government subsidies for solar water heaters. Three fourths of San Lawrenz households took up the offer.

Oliver Brownrigg, of the Rene­wable Energy Association Malta (Ream), whose complaint with MRA prompted the investigation, agreed that the scheme offered, though illegal, could have been done with good intentions.

"We agree with the government’s intention to take action against people who may have been abusing, intentionally or unintentionally, but we never imagined this would turn into a police investigation," he said. He added that the mayor was very ambitious to put PV panels on all houses in San Lawrenz but never intended to cheat. In fact, he made a call for applications to see which company could give the best offer to the village’s residents.

"He simply chose the most competitive company. I don’t think he realised the company was manipulating the grant," Mr Brownrigg said.

The association reported the issue to the MRA because it deemed it unfair that some companies were taking commercial advantage of the grant. It was also worried that the malpractice could lead to a suspension of the grant or an investigation by the EU.

"Our intention was to be educated because we felt some people may have been taking advantage without knowing that what they were doing was illegal. We are not geniuses. Yes, it’s wrong to inflate the price in that way but they must have thought it’s ‘just’ the EU’s money..."

He agreed, that customers were benefitting in an unlawful way and they were taking advantage of funds that could have gone to others.

A spokesman for MRA said every application was being investigated and the mayor and the company involved were called in for questioning.

When contacted, the mayor felt it was "premature" to comment in the light of the investigations. However, in the council’s minutes of a meeting in March, he is quoted as saying he was called in by the MRA and it resulted the council did nothing illegal because it was the company’s duty to see it was going by the book.