The ultimate pay situation would depend on whether the liquidators recovered any funds.
Due to “unsustainable operating losses and liquidity constraints”, the business was unable to continue trading in its current form.
She said the firm was “losing millions every year”.
But it recently secured credit lines of more than $195m to expand its no-money-up-front solar panel monthly subscription business from 15,000 customers to 100,000 “by the 2030s”.
It’s understood a staff protest is planned for outside SolarZero’s Auckland office on Friday.
The Herald asked liquidator Russell Moore of Grant Thornton to confirm the holiday pay situation, and if he could address how much was owing.
“We will be dealing with such matters as is normal in liquidations. We will not be making further comments at this stage,” he replied.
US private equity giant BlackRock – which bought the 1970s-established business from its Kiwi founders for an undisclosed sum in 2022 and promised to invest up to $100m in expansion – did not immediately return a request for comment.
One of the firm’s key lenders, the Government’s NZ Green Investment Finance. A spokeswoman told the Herald, “NZGIF has provided $145 million for SolarZero to install solar panels and batteries on homes.”
Asked how much of that facility had been drawn down, she said, “NZGIF is working with the senior lenders and the liquidator to assess the situation as it unfolds.”
Contracts remain the same – liquidator
Customers posting on SolarZero’s Facebook page were concerned about their contracts being honoured.
One wrote: “Our contracts still stand and we still get the second battery free after 10 years, correct?”
Another asked: “Can we please have a heavily discounted liquidator sale buyback scheme? Feels like a liability on the roof now.”
The Herald put those questions to the liquidators.
“Verofi is now responsible for servicing customers. They have sent a message to existing customers that their service and contract remains the same,” Moore replied.
What customers have been told
An email sent to SolarZero customers yesterday evening said, “Effective 4pm today 26 November, SolarZero Limited (in liquidation) has ceased operations and will not be acquiring new customers. There will be no interruption in your energy service, and the terms of your agreement remain unchanged. SolarZero has faced financial challenges and, after careful consideration the company’s directors have requested its senior lenders take enforcement action, including appointing Verofi as the standby servicer and placing the company into liquidation.”
The liquidator’s first report is expected within five working days.
SolarZero has at times been accused of pushy door-to-door sales tactics.
Last month, Consumer said: “Our call centre has been running hot with inquiries about SolarZero … There are certain things that homeowners need to take into consideration that muddy the waters.”
The publication warned readers that if they signed with SolarZero, they’d be locked into one power retailer for their electricity needs beyond solar.
Consumer told readers to “Proceed with caution if you’re looking at taking up SolarZero on its offer”.
In August, Consumer reported SolarZero customer Paul Doocey had been refunded $4000 after a longtime fight with SolarZero.
Its system was removed from his Māngere home in 2017 after leaks, but he continued to be charged its monthly fees through to 2019.
Model likely hurt by high interest rates, expert says
Meanwhile, a veteran startup advisor has voiced his doubts about SolarZero’s model.
“SolarZero customers could buy solar panels and a battery setup outright, which often runs to $20,000-plus or, as most do, pay nothing up-front,” CFO James Allard told the Herald last year.
Solar Zero continues to own all the hardware and the customer pays it a set fee a month for “energy as a service”.
Rates vary depending on the setup, particularly the number of solar panels installed, but Allard says a family of four might pay around $177 per month.
A 25-year contract term included one free battery replacement.
If SolarZero panels don’t cover all of a customer’s needs, they buy electricity in the usual fashion from a power company (SolarZero currently partners with the Genesis-owned Ecotricity).
“A client reverse-engineered the SolarZero model and realised it was never going to work. They could never get a viable model working,” veteran start-up advisor Ralph Shale told the Herald.
Shale, former ANZ Investment Bank associate director of corporate finance before becoming Rocket Lab’s chief financial officer last decade, is now a principal at The CFO Centre, which offers services to high-growth companies.
“SolarZero is basically a loan book – so I look at it like a financial instrument, like a Government bond with more risk. So if interest rates fall then the value of the asset [Solar Zero] goes up. If interest rates rise then the value falls.
“My assumption is if the original investors in SolarZero got their money back it would have only been because rates fell significantly.
“BlackRock bought in [in 2022] at the bottom of the interest rate cycle so the capital value since would have been going backwards – and they would have been losing money from operations.
“My guess is they have written off the original $100m-plus investment and whatever capital they added in since then.
“I understand the returns on residential solar as deployed by Solar Zero … is around 4 to 5%, so with the cost of funding being now say 6-8% they are losing interest margin.””
He added: “Even with rates say down around 2-3% they were probably losing money after non-interest costs.”
BlackRock did not immediately respond to a request for comment.
SolarZero chief executive Matt Ward told BusinessDesk last night: “It’s a real shock for me and the management team”.
He said customers would still be looked after, “but our shareholder has decided to stop investing in the business”.
BlackRock vehicle GRP III NZ Bidco was the sole shareholder at the time of the liquidation.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
