US solar giant Sungevity quits Australia, expands in Europe

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US solar giant Sungevity has dumped plans to become dominant player in the Australian market and has exited the country, an apparent victim of Abbott’s war on renewables. RoofJuice, the new owner, says it will focus on ‘smart solar’ to deal with rule changes, and battery storage.

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US solar service giant Sungevity has decided to quit the Australian market, another apparent victim of investor nervousness about the constantly changing policy environment for clean energy in Australia.

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Sungevity targeted Australia as one of its first expansion markets outside of the US less than three years ago, with high hopes of a rapidly expanding market, its Australian co-founder Danny Kennedy said at the time.

It hired James Myatt, the founder and former head of upstart energy retailer Australia Power & Gas, as it sought to become the dominant solar player in the Australian market, and take on the country’s biggest electricity retailers.

But it didn’t work out as planned. After downsizing the Australian business in response to an overall decline in rooftop solar PV sales, and after failing to raise money to buy out the remaining business, Sungevity has decided to exit the country.

The announcement of the sale of its stake in the Australian business to RoofJuice – a new entity established by solar industry veteran Nigel Morris – ironically came on the same day as Sungevity announced a major expansion into the UK market, which installed 2.4GW of solar in 2014, three times more than the Australian market.

In Europe, Sungevity has teamed up with E.ON, the largest utility in the EU, which is ditching its centralised generation business and focusing on solar, storage and micro-grids. The two companies have announced major initiatives in the German, Dutch and now UK markets.

In a brief statement, Sungevity said: “Sungevity Inc. is currently exiting Australia to focus on other core markets. The new entity will be rebranded “RoofJuice” and will take over responsibility for all existing Sungevity customers and processes in Australia.” It did not respond to further questions.

Morris, the former head of consulting company Solar Business Services, says the rooftop solar market is tough in Australia, despite it already having the highest penetration of rooftop solar in the world, with 1.3 million homes installing more than 4.2GW of solar.

He says the market is being rattled by the constantly shifting policy environment. At the state level, utilities and regulators are changing tariff structures and increasing fees for network connections and metering for solar homes.

On the federal level, the Coalition government has asked the Clean Energy Finance Corp, which has injected more than $200 million into the rooftop solar market, to stop financing rooftop solar, and Tony Abbott this week declared that 23.5 per cent renewable energy is “more than enough” – raising more concerns about the policy future.

“Any international company trying to build solar business in Australia – if they look around the world and at the operating environment we have got, they would think why on earth would we invest there,” Morris said.

The Australian market is already going through some significant consolidation. Mark Group, one of the biggest installers, was bought out by private equity company Anchorage Capital; Energy Matters was bought by SunEdison, while Solar Juice was bought by China’s Solar Power Inc. SunPower bought a stake in Diamond Energy.

Among other moves, Solco bought out the Go Group, while MPower picked up the remnants of the failed Ingenero. Numerous smaller solar companies have been seeking cash injections, while the big incumbent utilities, particularly AGL Energy and Origin Energy, have been rapidly expanding their solar offerings.

sungevity roofjuiceMorris said RoofJuice – which will have around one-fifth of the staff of Sungevity’s Australian operations at its peak – would be smaller and more nimble, without the overheads of a big corporation, and would target the “smart solar” and battery storage market.

Morris says “Smart Solar” means using devices that can respond to regulatory rules that might prevent exports back to the grid, or seek to divert power to avoid having to sell electricity back to retailers at negligible prices.

This includes using diverters to effectively store the output from solar PV in hot water systems, and systems for load control.

“It forces us to be smarter. We have got to react to regulatory changes. We just can’t put dumb systems on the roof any more.”

In a letter to clients, Morris said that despite the “blindingly obvious attempts” by the Abbott government, solar cannot be stopped.

“Inevitably this means many players will survive. Some may even prosper. But I am under absolutely no illusion that this is a very tough game loaded with traps, twists and turns.”

He said incumbent utilities had made “ridiculous, frequently desperate and increasingly rejected” attempts to protect their turf.

“That’s pretty understandable. But it has already started to fall apart,” he wrote. “Innovative retailers exist, virtual net metering is only a matter of time and then, there is affordable storage. They will adapt or perish in the next five years because the world will be entirely different in a few short years.

“So, on the issue of timing, with an election coming, a new promise and a showdown looming the opportunity is for solar technology to become even more popular.”

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13 Comments
  1. Alex 4 years ago

    Australia is “open for business” according to Our Glorious Leader. Not renewables though. Definitely not renewables.

  2. Jonathan Prendergast 4 years ago

    Best of luck to Nigel with his new company!

  3. Roger Brown 4 years ago

    We just have to “Kick this Mob out !”

  4. onesecond 4 years ago

    Relying only on mining exports has done whonders for all the African countries and their economies. A glorious idea of Tony Abott to follow that exact same route and shoot down any businesses that require technology or that sort of weird mumbo jumbo, that noone can understand. What a leader.

  5. BsrKr11 4 years ago

    this is such a joke- Abbott and company are setting Australia to miss the largest boat sailing since the industrial revolution ….

  6. Graham Dunlop 4 years ago

    Agree totally… THIS PRESENT GOVERNMENT IS NOT DOING US AUSTRALIANS ANY GOOD AT ALL. WITH NO or LITTLE MANUFACTURING HERE AFTER 2016, YOU WOULD THINK THAT RENEWABLE S WOULD BE WELCOMED WITH OPEN ARMS. DAMN SAD TO SEE A GOVT. DO THIS TO A COUNTRY/ GET THEM OUT!

  7. Bob_Wallace 4 years ago

    I’m commenting from the other end of the planet. I see a lot of (very understandable) displeasure with Abbott and Co. in the comments here.

    How about the general public? How is public opinion running? Does the war on renewables make much of an impact on the majority of the population or are they concentrating on other issues?

    • mick 4 years ago

      id say yep people are pissed off mainly about a multitude of fk ups mainstream media sort of steers them from the big picture hence wtf from 12000 miles away understandable cheers

    • mick 4 years ago

      mate that was a bit flip il try to put it better we have Russian obfuscation about a shot up plane,a conflicted govt(at best) about being conservative about a number of issues surrounding the catholic church v civil rights,they are trying to back door sales tax increases,meta data capture,use of taxpayer funds to sink their political opposition,set up new chinese (read central committee)coal mines in the worst possible place while making life as difficult as possible for renewables (lobbying jobs in their futures) all the while a massive ice epidemic going on while they abrogate responsibility for the public health system and offshore lots of sensitive jobs relating to the national interest apart from that its peachy

      • Bob_Wallace 4 years ago

        Thanks. Sounds like the crappy times we went through during the Bush/Cheney administration.

        When the heat was turned up on them they found something they could use to distract the general public and it took a long time for the general population to go sour on them.

  8. Ian 4 years ago

    These American corporations are fair-weather friends. They come here with their fat wallets and big talk and the first sign of a hiccup off they go to horn-in on someone else’s turf. We installed 4.2 GW of rooftop solar without any help of big brother, do we really need American cash to install any more?

  9. Daniel Zamir 4 years ago

    Trying to keep solar out of the country is like trying to keep the internet out of the country. There is no way to practically do it for long without becoming North Korea.

    In 5 – 10 years energy storage prices will drop, and then people will just store the extra energy.

  10. eric 4 years ago

    yes, true capitalist pigs in hand with state governments are doing everything possible to eliminate and contain the solar market and protect their own footprint.
    It makes me sick when I realise that major corruption is involved in order to tie the average Australian to the coal generating power plants.
    Both the federal and the state governments obviously have their fingers in the pie of companies that own the coal generating plants .I for one would like to see a public listing of these politicians and their shelf companies that they hide behind.
    The Australian public would get a major shock as to who is involved and then all the policies changes will begin to make sense

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