One of the country’s leading mid-sized solar companies and former winner of SmartCompany‘s Smart50 has been placed in voluntary administration, but the company’s founder says the move is a restructure, not based on financial turmoil.
Carbon Management Solutions and Aussie Solar Installations have been placed in voluntary administration, with founder Amber Ferguson saying a new, single entity will be formed to focus on the commercial market instead of residential installations.
The strategic shift highlights just how far solar companies need to go in order to remain viable – several have fallen by the wayside in the past few years.
“It’s still very competitive,” Ferguson told SmartCompany. “There are still lots of new companies that have joined the industry.”
The Australian Solar Council has lamented the closure of dozens of solar companies. Even large businesses like the Adelaide-based Solar Shop have collapsed, along with lots of smaller businesses.
Carbon Management Solutions topped the Smart50 list back in 2010, when it was turning over $72 million after a bumper five-year run.
But during the past few years, the solar industry has been under intense pressure and Carbon Management Solutions has fallen from its peak. Changes in state-based tariffs have been a key factor, but the glut of solar panels has seen prices decline as well.
Carbon Management Solutions is now turning over between $20-30 million, a large amount for a solar company considering current conditions, but well below its previous turnover.
Ferguson says, in order to survive, the business has to focus on its most profitable possibility – commercial installations.
“We need to be able to show businesses we are able to reduce their electricity consumption,” she says, adding that many other companies are turning to commercial installations in order to survive.
“These new companies are trying to start up business models…whether they will be able to succeed remains to be seen.”
Ferguson stresses the company is not disappearing through the voluntary administration, and is instead forming a new group, Carbon Management Solutions Group, which will trade as Aussie Solar.
“We’re merging the two companies together in order to reduce overheads, costs and minimise the pressures on running the business,” she says.
“But we’re opening up into different fields as well.”
The company has been working on a battery technology for the past two years, which is now ready to be released to the market.
“It’s been a huge investment,” says Ferguson. “It’s been quite difficult in trying to make this type of technology consumer friendly.”
“But we think this is definitely something the industry needs.”
The amount of effort Ferguson is putting into revitalising the company is a testament to just how difficult the solar industry has become. Changes in state-based tariffs have seen providers go under, and the low price of panels has squeezed profits dry.
Back in April, statistics released by consultancy group SunWiz showed more than one million systems have been installed across the country, with rooftop solar panels totalling more than 300,000.
At the time, Australian Solar Council John Grimes told SmartCompany the industry had a long way to go, but said overall, “things are good” and conditions were beginning to improve.
Ferguson says the company can only wait and see how its’ commercial strategy will perform. But for now, she remains confident.
“We moving into different fields…and we think this is where the industry is going.”