The Australian solar industry has had many shakeups and survived countless scams. The latest scam by Emerging Energy Solutions, an STC trading middle-man, has seen thousands of solar installers across Australia left in the lurch and unpaid. The impact on Australian solar businesses has been devastating for many, and highly inconvenient for others. It remains to be seen how consumers will be impacted, but the outlook might surprise you.
Who is Emerging Energy Solutions?
Solar installers use third-party STC trading companies to sell the STCs they ‘purchase’ from their customers. When a home or small business installs solar, Small-Scale Technology Certificates (STCs) are allocated according to the size of the system and its location. In most cases, the home or business owner simply signs over the ownership of the STCs to the installer, resulting in an up-front discount on the total cost of the system. Each STC is currently worth around $40. Should a system be assigned 100 STCs, the expected return would be around $4,000. Rather than selling these themselves via the STC clearing house, most solar installers opt to use a trading platform where the work is done for them.
In the case of Emerging Energy Solutions, who own the Greenbot trading app, countless installers across Australia have been left reeling as the business has taken the STCs, cashed them in, and not paid them what they’re owed to the tune of more than $86 million. The business would promise a payout within 48 hours, for a fee, once STCs had been assigned to them by the installer. Emerging Energy Solutions would then be reimbursed within 6 weeks by the Clean Energy regulator. With the announcement that Emerging Energy Solutions has gone into liquidation, many solar businesses are facing bankruptcy.
What does this mean for solar businesses affected by Emerging Energy Solutions?
The impact on the solar industry is two-fold. Many of the solar retailers and installers who have been left without payment have found themselves owing money to wholesalers, in the red for installations that have already taken place, or cancelling upcoming installations. Solar wholesalers are either overstocked with unpaid products or owed money for stock ordered and delivered on credit. The money owed is from installers who were banking on the money coming in from the STCs.
Solar retailers and installers price their quotes based on the return from the STCs. This has left many in the red as they have installed systems that have been left unpaid in the value of the STCs. To make matters worse, any solar business that goes bankrupt will take its workmanship and installation warranties with them. This will leave homes and small businesses without these warranties should an issue arise in the future.
A Victorian solar retailer, who has asked to remain anonymous, stated that his business is facing a catastrophic loss, “We just don’t see the light at the end of the tunnel. We’re owed tens of thousands. A lot of our upcoming installations have had to be rescheduled or cancelled – making this an uphill battle.”
Businesses not financially impacted are finding that solar stock is hard to come by. Wholesalers have been playing it safe as they seek to stave off financial ruin. While there may be oversupplies of some lines of product, wholesalers are reducing orders on higher-risk stock.
It should be noted that Greenbot is still trading after a failed attempt by the Clean Energy Regulator to cease its operations by blocking the creation of new certificates. The matter was issued a stay by the federal court on the 3rd of July. Greenbot is an Australian private company owned by Emerging Energy Solutions. All payments made to users of the Greenbot app were made by Emerging Energy Solutions Group Pty Ltd. Their terms and conditions have not been updated.
What recourse is available for affected installers?
The Clean Energy Regulator (CER) is unable to assist any impacted solar businesses concerning money owed. Any certificate created in the REC registry is legally owned by the agent who created it. Installers are instructed to search for their certificates in the REC registry. If they are not found, it is recommended that they contact the CER for further instruction.
Installers should contact the liquidators, Graeme Beattie & Matthew Kucianski, for additional instruction and advice.
The flow-on effect from the Emerging Energy Solutions fallout
While existing customers of impacted solar installers may be impacted, new solar customers might just reap the benefits of the Emerging Energy Solutions fallout. Many in the industry are predicting that the mass closing of smaller solar businesses will create an oversupply of products. This should spell savings for consumers as solar panels and inverters will begin to pile up in the warehouses of wholesalers. While this is devastating for the industry and Australian businesses, the silver lining will be in the form of cheaper solar.
Those looking to install solar over the coming months should expect delays in installations due to supply limitations.
Choosing reputable solar installers has never been more important. Healthy solar businesses will usually be able to ride these waves with minimal or no impact on the consumer. Energy Matters works with a network of solar installers across Australia who will provide you with FREE quotes for solar, batteries, EV chargers, heat pumps, and so much more. And the best part is that it is all obligation-free. Click the button below and start your solar journey today.
