The future of the largest retailer of rooftop solar modules, Eurosolar, is in doubt after the company’s parent entity was served with a winding up order application by the Australian Tax Office.
The notice was served through law firm Hunt & Hunt to “P & N NSW Pty Ltd” which the website SolarQuotes, and others, point out owns the business name Eurosolar. According to the ASIC website, an insolvency hearing will be held in the Federal Court in Sydney on February 9.
Eurosolar is one of the biggest solar retailers in Australia, as this graph above from Green Energy Markets’ solar market report shows, it has in the past year seized the number 1 position in solar module sales.
It specialises in the “budget end” of the solar market, with price offerings that have surprised its competitors, who believe that its sharp discounting may have something to do with its problems. The company promises to undercut any other offer by 10 per cent.
Euro Solar issued a statement on Wednesday saying it was the result of a “miscommunication” caused by notices being sent to the wrong address. The company did not respond to emailed questions from RenewEconomy. A spokesperson for Hunt & Hunt also would not provide further details.
The wind-up notice, however, raises big questions about the future of the company, and about the solar industry itself. Insiders said that it could have a big impact, reducing pricing pressure on competitors. There could be significant fall out too on suppliers to Eurosolar and to customers holding warranties for the products they have bought.
As SolarQuotes writes, a winding up order is usually used as a last resort when a company owes money.
“In this case the ATO is saying it assumes the company is insolvent due to an unpaid debt and wants to wind them up. Unless Eurosolar pay whatever debt they owe to the ATO (usually with the ATO’s legal costs on top) they are likely to be wound up.”
Competitors also pointed out that another company called Think Green Solar appears to have started up operations at the same address in Melbourne, 409 Francis Street, Brooklyn.
SolarQuotes notes that if Eurosolar can and agrees to pay the outstanding debt plus legal costs, the plaintiff (in this case the ATO) can go to the court and apply for the winding up order to be dismissed.
If Eurosolar does not resolve the matter, it says, then it is likely that the court will make the winding up order, which would be published online within 24 hours of the hearing. If that happens then a liquidator is appointed and the long and painful process of trying to pay the creditors begins.