Sun 'will shine again on solar'

Adelaide Advertiser
13 September 2011, Page: 37

ENTREPRENEUR Adrian Ferraretto remains confident about the future of the solar power industry despite the failure of Solar Shop. The pendulum would swing back in favour of the industry as electricity prices rose and green issues became ever more important, he said. Mr Ferraretto founded Solar Shop in Adelaide 12 years ago and built it up to be Australia's biggest solar panel retailer. He resigned as managing director in July last year and has had no involvement in running the business since then.

He remains shocked that last week Ferrier Hodgson was appointed as receivers for the business on instructions from Westpac over bad debts. "There's this pendulum that's been swinging ever since the year 2000 when the rebates first came in", he said. "We've had 14 changes along the way". This lack of consistency in government policy was holding back investment in the industry but he was determined to press ahead because "it's the right thing to do".

Mr Ferraretto sold all but about a quarter of the shares in Solar Shop to private equity investors. He said he received "less than a third" of the $50 million previously reported for his stake. After tax, almost all of the money has been invested in his new business, Tindo Solar, which will manufacture solar panels in Adelaide. "I've been around the world looking at manufacturing plants for the past four years", he said.

Tindo Solar is recruiting retail companies to sell its panels which it aims to have in production before year's end. "The saving grace for us will be that the pendulum will swing around for us sometime next year", he said. Fellow industry pioneer Richard Turner, founder of Zen Home Energy Systems, said the collapse of Solar Shop was sad but it did not signal the end of the industry. "Companies such as Zen Home Energy remain in a very strong financial position despite the constantly changing legislative environment for solar power", he said.

There were different approaches to managing companies in the industry with Zen Home Energy among those that had been able to adapt to the changes, he said. "Our company has a pipeline of quite revolutionary product lines that are scheduled for release in 2012", he said. Ferrier Hodgson are in the early stages of assessing what went wrong for Solar Shop. However, its rapid expansion in NSW is expected to have been a contributing factor.

In addition to the Federal Government accelerating the reduction in value of Renewable Energy Certificates faster than expected from July, NSW has suspended its feed-in tariffs. Retailers pay nothing for electricity generated by NSW householders from solar panels. This is in contrast to an earlier gross feed-in tariff of 60¢ per kW in NSW-leading to a collapse of the industry. With a fair price-not necessarily a subsidised price-the industry would rebound, Mr Ferraretto said.