CBD Energy is considering a name change to go with its newly acquired listing on the Nasdaq after striking a deal to take a controlling stake in the US-based solar PV company Westinghouse Solar.
The merger with Westinghouse, a 10-year-old spin-off of the famous appliance brand, which specialises in designing and manufacturing solar PV panels, was announced in New York overnight, and will see CBD shareholders take 85 per cent of the combined company, with Westinghouse Solar investors holding the rest.
CBD CEO Gerry McGowan said the company was attracted to Westinghouse because of its innovative technology – it was the first to develop AC panels – and also its niche position in the US solar PV market, which is forecast by industry analysts to grow three-fold to more than 6GW a year by 2015.
McGowan said a listing on the Nasdaq would give the company much greater access to capital to support its ambitious international growth, with wind and solar projects planned in Europe, Asia, Australia and now the US.
“The US market is really buoyant,” he told RenewEconomy. “The important thing is that we are moving more and more offshore. We’ve been held back by a lack of access to capital, but this gives us a listing in a much more buoyant energy sector. We’re very excited by the opportunity.”
McGowan said the company may also take advantage of the iconic Westinghouse brand and rename the company. However, no decision has been made yet, although one may be in the next month.
Westinghouse says its integrated AC panels reduce the number of components by 80 per cent and labour costs by 50 per cent. “Westinghouse Solar’s integrated AC and DC designs are quite innovative, and could reduce installed costs for many of our customers and business partners in Australia, Europe and elsewhere,” McGowan said in a statement.
CBD bought a 10 per cent stake in Westinghouse for $1 million in stock in early December, and Westinghouse shares were valued at a total of $US10.1 million on the Nasdaq at the close of trade in New York on Thursday. Westinghouse last night announced revenues of $US11 million, an operating profit of $1 million, and a net loss of $US4.5 million for the 2012 calendar year last night.
The announcement came as McGowan confirmed that the AusChina Energy joint venture that he created with Chinese energy giants Datang and Hianwei last year would not go through with the planned $220 million development of the Taralga wind farm in New South Wales as planned.
He said delays in the decision making process within the joint venture were the cause of the problem, although he rejected suggestions that AusChina was unraveling.
CBD had touted the venture as a major player in the Australian wind market, and would use the cheaper Chinese turbines and access to cheaper Chinese finance to seek up to $6 billion of wind energy developments in Australia, or around a third of the new build anticipated to meet the Renewable Energy Target.
“The Auschina joint venture is still in place,” McGowan said. “Auschina is not proceeding with Taralga because the decision making process took too long, and the project has got timing issues.”
Indeed, it is understood that the 100MW Taralga wind farm has a February 23 deadline to begin the project, or it risks losing its planning permit. The windfarm was heavily contested by some members of the local community, and only got approved after a court battle. The NSW government has since proposed tougher planning laws. It is understood the project’s owners RES Australia, is seeking alternative partners. McGowan said CDB may still have a role in the project.
CBD Energy also on Friday flagged a net loss of up to $4 million for the first half, because of a series of “one off expenses.” McGowan said these include the costs associated with it its ill-fated purchase of energy retailer Neighbourhood Energy.
McGowan said that operating profits continued to grow and would be in line with targets. He said the solar business, in particular, had rebounded after a particularly sharp fall after the removal of feed-in-tariffs in NSW. Last year, CBD Energy posted net earnings of $5.1 million as its revenues surged nearly four-fold to $165 million from $45 million earlier, mostly courtesy of its eco-kinetics solar division and the rush to install rooftop PV.