Solar Group in liquidation: Kiwibank among creditors owed more than $3 million

Solar Group is the second major solar company to collapse in the past eight months. Photo / 123RF

Kiwi-founded solar and battery firm Solar Group has gone into liquidation owing hundreds of creditors more than $3 million.

It’s the second major solar company to collapse in the past eight months, following the demise of SolarZero last year.

Grant Thornton’s David Ruscoe and Stephen Keen were appointed liquidators of Solar Group Ltd on July 7.

Ruscoe and Keen said in their first liquidator’s report the company’s director told them the business failed due to cash flow constraints as a result of declining sales performance and challenges in the industry relating to pricing pressure, low adoption of solar and reliance on financial incentives or subsidies.

The company, which provided installation and services of solar power, pool heating and hot water systems, has ceased trading and staff have been terminated.

The first liquidator’s report said Kiwibank holds a General Security Agreement – granting it security interest over the borrower’s assets – and is owed $1.8m.

Kiwibank had engaged Ruscoe and Keen to review the financial performance and viability of Solar Group in December last year, the report said.

That review was extended in February to include the company’s forecast performance and cash flow.

Ruscoe and Keen said they were aware of nine potential employee claims.

So far, they had received four employee claims totalling $102,336, including outstanding wages, commissions and holiday pay.

Inland Revenue is owed approximately $933,675, with a significant portion expected to be preferential.

There are also 118 unsecured creditors, which are owed $1,059,434.

Creditors include ACC, Fuji Xerox, Meridian Energy, the Ministry for Primary Industries, NZ Couriers and Spark NZ.

According to a statement of affairs based on company records, Solar Group has assets of $2.5m, which is largely made up of intangible assets of $1.2m.

The company has stock on hand worth $524,136.

Ruscoe and Keen said it is unknown if any funds will be available to make payment to creditors.

Solar Group is also a party in the disputes tribunal and district courts.

Behind the ball

Last year, Solar Group managing director Roeland Driessen told the Herald that solar uptake in New Zealand was slow compared to the rest of the world.

“The number of connections is about 3% solar,” Driessen said. “In other countries like Australia, the United States, it’s 30-40%. So we are way behind [the] ball.”

However this week SEANZ, the Sustainable Energy Association of New Zealand, told the NZ Herald solar is a “rapidly growing industry”.

“The economics of solar have never been stronger with increasing electricity prices, declining cost of solar, and attractive financing options from banks for residential and commercial solutions,” SEANZ manager innovation pathways Gareth Williams said.

“There are also positive moves being made by the government and the Electricity Competition taskforce to remove barriers and to recognise the value to NZ’s electricity supply from distributed energy resources such as solar and battery storage.”

In November last year, SolarZero was placed into voluntary liquidation owing more than $40m to over 700 creditors and staff.

The company had 169 staff at the time of liquidation and about 15,000 customers.

Cameron Smith is an Auckland-based business reporter with the Herald live news team. He joined the Herald in 2015 and has covered business and sports. He reports on topics such as retail, small business, the workplace, and macro-economics.