US manufacturing and engineering giant Flex is to quit the Australian wholesale and retail solar business, adding to the massive changes in the industry despite record installation levels.
The decision by Flex to wind down its participation in the Australian solar business – effective December 14 – comes more than two years after it bought the Australian solar business from another US company, Sun Edison, for a knock-down price of around $11.7 million.
RenewEconomy understands that Flex will put in a managed withdrawal from the business, and honour its commitments, similar to the decision last month by Germany’s Exyte (formerly M + W) to quit the TrueValue solar business that it had bought in 2011.
Both Flex and Exyte appear to see Australia as a cut-throat market with low margins, despite its high installation rates, now running at more than 1.5GW in small scale rooftop solar alone, and want to focus on other countries.
That cut-throat pricing has already impacted the likes of contractor RCR Tomlinson, and taken toll on a number of installers, most recently Secure Intelligence Solar.
Another major Australian solar name, Greatcell Solar, which was looking to build a business around 3rd generation solar technologies such as perovskite cells, has also called in voluntary administrators after failing to raise funds for a pilot project and the death of its lead scientist.
The most widely known brand name within the Flex solar business in Australia is Energy Matters. RenewEconomy understands that its retail sales will cease, but the website will continue as a lead generator. Its long-term fate is not known.
Energy Matters was bought for more than $18 million by the acquisitive Sun Edison in 2014, but the US company’s rapid expansion went beyond its ability to fund its operations and it went into bankruptcy proceedings, from where Flex bought the Australian business.
Flex is an engineering and manufacturing business with more than $A30 billion in annual revenue. It also used to make batteries for Australia’s Redflow, but that is no longer the case.
Writing on a solar industry Facebook group page, one former employee, Jack Long, described the decision as the “end of an era”, as Energy Matters had been a major player in the market for more than 10 years.
(Note: We will have a full wrap on this and all the year’s events in our end-of-year Solar Insiders podcast special next week).
Update: This story has been corrected to reflect fact that Flex no longer make batteries for Redflow, whose manufacturing operations are now in Thailand.