Conflict of Interest in a Subsidised Retrofit Verification
A consultant is hired by a homeowner association to prepare an energy audit and EPC for a subsidised retrofit under a national programme. The programme requires an independent verifier to confirm savings before funds are released. The consultant's sister company is the installation contractor bidding for the works. The consultant also sits on the programme's regional evaluation panel. The client asks the consultant to 'keep it simple' and to sign off the savings based on the contractor's own estimate to speed up payment. The estimated saving is 38%, based on a baseline that the consultant has not seen.
1. Identify the ethical issues and the applicable professional obligations.
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Ethical issues:
- Conflict of interest - the consultant's sister company is a bidder. This is a close-family/economic interest that must be disclosed and managed, likely by recusal from the bid evaluation.
- Independence of verification - the verifier must be independent of the installer. The consultant cannot both prepare the audit/EPC and verify savings where a related party installs the works.
- Panel membership - sitting on the evaluation panel while a related company bids is a direct conflict; the consultant must declare it and step down from that bid's evaluation.
- Pressure to sign off unverified savings - signing based on the contractor's estimate without seeing the baseline violates the duty of professional competence and integrity.
Obligations. Professional codes (e.g., the Bulgarian Chamber of Energy Auditors' rules and general engineering ethics) require: competence, objectivity, confidentiality, disclosure of conflicts, and refusal to certify work not personally verified. The programme's own rules likely require verifier independence and documented evidence.
2. What should the consultant do, and how should the savings be verified?
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Actions:
- Disclose the sister-company relationship and panel membership in writing to the client and the programme administrator.
- Recuse from evaluating the sister company's bid and from signing the verification for works it performs.
- Decline to sign off savings based on an unseen baseline or the contractor's estimate.
- Propose an independent verifier for the savings verification, or hand the verification to a separate qualified party.
Verification approach:
- Obtain the baseline data (pre-retrofit metered consumption, floor area, occupancy) and confirm it is measured, not estimated.
- Define the verification boundary and method (IPMVP option), with agreed adjustments for weather and occupancy.
- Require measured post-retrofit data over a defined period.
- Compare adjusted baseline with actual, report uncertainty, and document all assumptions.
- Sign only what has been personally reviewed and supported by evidence.
Communication. Explain to the client that a defensible verification protects the subsidy from clawback and protects the consultant's registration. Offer to proceed with the audit and EPC (which are separate from verification) if independence can be maintained.