How valuable is your business?

If you think one day you might sell your solar retailing business, what will it be worth?

In my experience, an investor will certainly look at the value your sales pipeline, and also consider your processes (i.e. how well will the business operate without its directors running the show). The solar industry mostly deals with one-off purchases rather than repeat customers, but investors much prefer to see recurring revenue.

One thing is for sure, if you’ve got a lot of warranty liability, then investors will judge your business to be practically worthless. We’ve seen many times where product recalls and widespread inverter failings have led to solar retailers collapsing, which is a risk an investor simply won’t want to bear.

Your installation practices will contribute to an investor’s assessment of warranty liability. An in-house installation team will be seen to deliver better quality outcomes (i.e. less likelihood of a system failure) than sub-contracting out installations.

The quality of panels and inverters therefore carries huge weighting when an investor is performing due diligence. Fortunately, most of the companies that used shoddy product in the past have departed the industry, one way or another, but there’s passable product and there’s exemplary.

But it’s hard for an investor from outside the industry to judge whether the ‘Tier 1’ panels you’re using will have warranty issues down the line. There’s plenty of Tier 1 solar businesses who’ve gone bankrupt. There are a few measures that differentiate superior quality amongst Tier 1 providers: TUV has PV+, there’s a range of additional IEC certifications for PID ammonia and environmental conditions, DNV-GL, Qualification+, TÜV SÜD Thresher Test, Atlas 25+, PVDI, plus the Positive Quality program. All have their place, but unfortunately none have mass-uptake, and none are strong indicators of the financial sustainability of the manufacturer.

This is where the concept of “Blue Chip” solar products is interesting. Supply Partners first coined the term at the start of this year. Just like a naiive investor in the stock market might like the low-risk offered by shares in a Blue Chip company, a naiive investor in a solar power system can more easily trust a “Blue Chip” solar product.  In practical terms, Supply Partners define Blue Chip as:

  1. Time in business is longer than the warranty offered
  2. Diverse range of products
  3. Capability of completing warranty services
  4. $30b in annual turnover
  5. In business for over 30 years

Now, though I don’t completely endorse Supply Partners’ definition (which understandably carries some self-interest), if I were to boil it down to a single line, it would be “this company is guaranteed to honour its warranty claims, even if it pulls out of solar manufacturing”. And I think that’s a pretty sound line of reasoning.

It does include Sumec Phono Solar (who also rank well in DNV-GL’s accelerated life testing), Hyundai Green Energy, LG Electronics, Hanwha Qcells (who are also VDE tested), and a few that aren’t accredited for sale in Australia. Considering solar panels haven’t been in mass production for much more than 10 years, this excludes most of the pure-play panel manufacturers, even though they may be top-quality products with very low rates of warranty claim.

As for inverters, if you were to just look at age, then Bosch (1888), Ingeteam (1940), Fronius (1945), Selectronics (1964), Delta Electronics (1987), MIL-Systems (1987), SMA (1981), Huawei (1987), ABB (1988) would are amongst those that are over 30 years old.

Now, I think the “Blue Chip” concept may speak to a risk-adverse market demographic that truly considers a 25-year product lifetime. And while there are plenty of reasons to choose younger suppliers over more well-established suppliers, if you’d like to sell your business in future I’d select your products very carefully. It could make the difference between a business with some value and a business an external investor wouldn’t touch.

I’m interested in hearing your thoughts and critique of the concept of ‘Blue Chip’ solar products. Email me at warwick@sunwiz.com.au

 

By all accounts, 2018 was a stellar year for Australian Solar Power. To celebrate all of the solar glory, SunWiz has written a series of articles covering 2018 - the key trends, achievements, and milestones for each state and segment of the Australian solar industry. These trends, facts and figures are covered in extraordinary detail in SunWiz’s 2018 Year in Review, which can be purchased for $1995 ex GST, which also includes a complimentary 3 month subscription to Insights, SunWiz’s flagship PV market intelligence subscription.

The topics covered in our Year in Review series are:

  1. 2018 - Australia's record breaking year. In eyewatering charts
  2. 2018 - state roundup
  3. 2018’s Top Retailers
  4. 2018 - Trends in Commercial PV
  5. 2018 - residential revival
  6. 2018- Australia’s magnificent year for solar farms

Australia's magnificent year for solar farms

In this series, we've seen that 2018 was a record year for the Australian PV Industry in the residential, sub-100kW commercial, and >100kW commercial rooftop segments. In this article, we'll look at the record-smashing year for solar farms. Data is taken from RenewEconomy / SunWiz's Large Scale Lookout service.

Read more: 2018's magnificent year for solar farms

 

By all accounts, 2018 was a stellar year for Australian Solar Power. To celebrate all of the solar glory, SunWiz has written a series of articles covering 2018 - the key trends, achievements, and milestones for each state and segment of the Australian solar industry. These trends, facts and figures are covered in extraordinary detail in SunWiz’s 2018 Year in Review, which can be purchased for $1995 ex GST, which also includes a complimentary 3 month subscription to Insights, SunWiz’s flagship PV market intelligence subscription.

The topics covered in our Year in Review series are:

  1. 2018 - Australia's record breaking year. In eyewatering charts
  2. 2018 - state roundup
  3. 2018’s Top Retailers
  4. 2018 - Trends in Commercial PV
  5. 2018 - residential revival
  6. 2018- Australia’s magnificent year for solar farms

Top PV Retailer by volume in each segment:

SunWiz tracks every individual installation in the Australian market, based upon STC and LGC creation. Most of the largest companies self-register STCs, which provides highly granular and accurate insight into the volumes of the players that make up the top ranks. Our full Year in Review report provides the annual and monthly volumes for the top players in the national STC market, plus the annual volumes of the top players by state and in each commercial size segment in the STC market.  Redacted versions of these charts are shown below, in order to identify the top player and the competitiveness of the state or market segment.

Read more: 2018 - Top PV Retailers

By all accounts, 2018 was a stellar year for Australian Solar Power. To celebrate all of the solar glory, SunWiz has written a series of articles covering 2018 - the key trends, achievements, and milestones for each state and segment of the Australian solar industry. These trends, facts and figures are covered in extraordinary detail in SunWiz’s 2018 Year in Review, which can be purchased for $1995 ex GST, which also includes a complimentary 3 month subscription to Insights, SunWiz’s flagship PV market intelligence subscription.

The topics covered in our Year in Review series are:

  1. 2018 - Australia's record breaking year. In eyewatering charts
  2. 2018 - state roundup
  3. 2018’s Top Retailers
  4. 2018 - Trends in Commercial PV
  5. 2018 - residential revival
  6. 2018- Australia’s magnificent year for solar farms

2018 - state roundup

In our first article, we took a look at the record-breaking year for the sub-100kW market Australia-wide. In this article we’ll have a look at how each state fared.

Read more: 2018 - state roundup

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