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 countrys biggest electricity retailers.
But it didnt 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 centralized 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 4.2 GW 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 AUD$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 Chinas 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.
Morris said RoofJuice which will have around one-fifth of the staff of Sungevitys 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 cant 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.
Thats 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.
This article was originally published in the leading Australian renewables website RenewEconomy and is published here with permission.
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: firstname.lastname@example.org.