Hundreds of households will receive an energy refund after being overcharged.
Around £800,000 is expected to be handed back to customers with "feed-in (FIT) tariffs" - renewable energy deals available to properties with devices like solar panels or wind turbines.
Regulator Ofgem said customers of Good Energy and F&S Energy were unfairly charged an unauthorised administration fee. They have said they will pay back £453,000 and an extra £200,000 out of goodwill. F&S Energy will also refund £94,040 and make goodwill payments of £50,000.
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The Government FIT scheme was introduced to promote the uptake of renewable and low-carbon electricity. The scheme lets customers who generate electricity from their property sell it for money.
Ofgem director of enforcement and emerging issues Cathryn Scott said: "The outcome of this matter sends a clear reminder to suppliers that they must comply with their obligations under the decarbonisation schemes and ensure that FIT customers receive payments they are entitled to for their renewable generation."
Good Energy chief executive Nigel Pocklington said: “Our annual Ofgem audit results have consistently reflected our commitment to high levels of service for generator customers.
"So we were very disappointed that Ofgem consider the admin charges we applied to a less than 1% of customers, which are not typical domestic solar generators, to be non-compliant with the scheme. We are no longer applying this charge and have contacted all affected customers to inform them of their refunds.”
This weekend Parliament’s spending watchdog accused Ofgem of messing up the market and increasing gas and electric bills. A report by MPs on the Public Accounts Committee says the energy regulator set the bar too low for new companies to set up as suppliers, the Mirror reported.
And as a result households have paid £2.7billion more than needed costing an average £94 each. Chair Dame Meg Hillier said: “We have regulators to set the framework to shore us up for the bad times.
“Problems in the market were apparent years before the unprecedented spike in prices and Ofgem was too slow to act. Households will pay dear.”
The MPs say Ofgem’s failure meant 29 energy suppliers serving 4 million customers have failed since July last year. The report adds: “Ofgem did not strike the right balance between promoting competition and ensuring energy suppliers were financially resilient.”
MPs have ordered Ofgem bosses to explain within six months what they have done to improve their performance. And they recommend more continuity plans be put in place to protect customers when firms go bust and for Ofgem to review the way it sets the energy price cap.
GMB union boss Andy Prendergast said: “The Government’s remorseless attempt to use the market to regulate energy has been a massive disaster that has left millions of households worse off.
"The market may be the right solution when it comes to selling tins of beans but has been an abysmal failure when applied to energy."
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