One of Victoria’s biggest and most well respected solar retailers, Gippsland Solar, has been acquired by major Australian insurer RACV, in a deal that speaks volumes about the huge potential yet remaining in Australia’s booming rooftop PV market.
The acquisition – which has been in the works for some months – signals a significant pivot towards solar energy for RACV, which started out in 1903 as a Victorian motoring and mutual organisation that offered (and still does) roadside assistance.
The company, which retails PV via its own very low-key solar division, RACV Solar, last month announced a transition to 100% renewables for all its clubs, resorts and office buildings, through a mix of on-site solar and an off-take deal with the retail arm of Snowy Hydro, Red Energy.
Under the five-year deal, which will kick off on January 01 2020, RACV will purchase 21GWh of renewable electricity a year – enough to power 3,500 average homes.
For Gippsland Solar, which was established in Victoria’s coal centre 10 years ago by CEO Andy McCarthy and his wife and co-director Kelly, the deal means the company can continue to grow – including into other states – with the backing of a much bigger (and inherently risk-averse) company.
RACV managing director and CEO Neil Taylor said on Friday that the deal would bring together one of Victoria’s most exciting regional businesses with one of the state’s oldest and most trusted.
“This acquisition will see both RACV and Gippsland Solar benefitting from each other’s strengths. Together, we’ll be able to improve current solar offerings, scale quicker and make renewable and sustainable energy solutions accessible to more Victorians.
“We know Victorians are concerned about the sustainability and cost-efficiency of the current energy system. In keeping with RACV’s mission to improve the lives of all Victorians, at the core of this acquisition is our commitment to help shape a more sustainable future for our members, customers and the state.”
McCarthy, who spoke to One Step Off The Grid on Friday, said he intended to maintain Gippsland Solar’s core values – and its Latrobe Valley head quarters – across the much expanded solar business.
“When my wife and … I founded Gippsland Solar 10 years ago, we wanted the customer to be at the centre of everything we do,” he said in a statement on LinkedIn.
“As a member-owned organisation, we believe RACV’s values are perfectly aligned with our own, and we look forward to a period of tremendous growth and shared values.
“I will be staying on as CEO of Gippsland Solar and RACV Solar, and my passion for this business has never been stronger,” he added.
“This partnership will direct millions of dollars and many jobs into the heart of the Gippsland region, continuing the legacy that we are proud to have started.”
In comments to One Step, McCarthy said that while his responsibilities would grow in his new role, the financial pressure of running a family-owned business would be somewhat relieved.
He said the company had been sending its cars out with solar-laden trailers “10,000 times a year” over the past couple of years, and that this number was expected to grow “exponentially” under RACV’s ownership.
“We really want to make RACV a dominant business in the space, not just a business that sells solar panels. It’s become really important that they practice what they preach,” he added, since their commitment to 100 per cent renewables.
“The last two years have been building up to this… We want to build the strongest and most trusted renewable energy company in the country.”
McCarthy, who shared some of the broader industry’s frustrations with the initial design of the Victorian government’s rooftop solar rebate, believes the current outlook for residential solar in the state “has never been better.”
“We’re just at this really positive stage where solar businesses have had to swallow that pill [of higher standards demanded by the rebate],” he told One Step.
“I believe this year that Victoria is going to be the safest state in Australia for solar installations. We just want all companies to be held to the same standard as we hold ourselves.”
McCarthy said Gippsland Solar’s expanded focus as a fully-owned RACV subsidiary would start with RACV’s 2 million-plus members, and go from there.
“We’ve already taken on the RACV Solar staff onto our team, so that’s half-a-dozen new staff straight away,” he said.
“Exponential growth is the plan.”
“We want to really separate ourselves from the cheaper end of the market, which is to say we want to extend what we’re currently doing.
“We’ve been on (RACV’s) radar for some time,” he added. “They’re a very risk averse organisation, and the way we cross every T and dot every I appealed to them.
“RACV really want to be a (leader in Victorian solar), so it’s a huge investment in the state, and it’s good for the industry.”