SolarZero Group Liquidation: $39 Million in Debt and Hundreds of Creditors Left in Limbo

26.01.2025

ARTICLE

In a major shake-up for New Zealand's renewable energy sector, solarZero Limited and its associated companies have been placed into liquidation, leaving creditors and employees scrambling for answers. On November 26 and 27, 2024, liquidators Stephen Speers Keen and Malcolm Russell Moore of Grant Thornton New Zealand were appointed to manage the fallout from the collapse of the once-prominent solar energy provider.

The numbers paint a grim picture: solarZero owes $39.3 million to creditors, with the chances of full repayment looking slim.

SolarZero operated as an "energy as a service" company, offering customers solar panels and battery systems through 25-year subscription contracts. Acquired in 2022 by GRP III NZ Bidco Limited (a BlackRock Climate Infrastructure-managed entity) for $110 million, solarZero initially promised to revolutionize New Zealand's renewable energy market. However, the company struggled to turn a profit. Operational losses led to GRP III injecting an additional $147.8 million to keep the company afloat. Despite these efforts, solarZero couldn’t achieve financial stability and ceased trading in late November 2024.

As of the liquidation, solarZero’s debts are broken down as follows: secured creditors are owed $3.29 million, largely tied to motor vehicles and stock; preferential creditors are owed $1.1 million, mainly to 173 employees for holiday pay; and unsecured creditors are owed $34.9 million, including trade creditors, intercompany debts, and customer obligations. Some of the prominent creditors include Panasonic New Zealand and Fujifilm Business Innovation New Zealand. Additionally, solarZero employees, landlords, and suppliers are bracing for significant financial losses.

SolarZero relied heavily on a securitization model to fund its operations, transferring most of its cash-generating assets and customer contracts into special purpose vehicles (SPVs) controlled by Public Trust. While this structure provided upfront capital, it also insulated these assets from liquidation claims. Approximately 97% of solarZero’s customers are tied to these SPVs, leaving only a fraction of the company’s assets available to creditors. In fact, the liquidators revealed that solarZero’s cash on hand at the time of liquidation was just $22,275—a drop in the bucket compared to what’s owed.

The directors at the time of liquidation include Andrew Booth, Simon McIver, Charles Reid, Valerie Speth. Their leadership and decision-making are likely to come under scrutiny as the liquidators investigate the company’s collapse and its ability to meet its financial obligations.

SolarZero’s 169 employees were among the first casualties of the liquidation, with all employment contracts terminated immediately. Contractors also faced cancellations, leaving many small businesses in precarious financial positions. For customers, the story is more complicated. Most contracts are managed by SPVs and are unaffected by the liquidation. However, around 3% of customers whose contracts were not transferred to the SPVs may face uncertainty.

The liquidators have begun securing assets, including $3.6 million in stock held in warehouses and with contractors. They’re also investigating potential recoveries from intercompany loans, intellectual property, and other receivables. Expressions of interest from buyers looking to acquire parts of the business have been noted, though any sale remains speculative at this stage.

The collapse of solarZero is a cautionary tale for the renewable energy sector. The company held an estimated 40% of New Zealand’s rooftop solar market, and its failure could shake consumer confidence in subscription-based solar energy models. While solarZero’s financial troubles are unique to its business model and management decisions, they highlight the risks involved in scaling renewable energy businesses reliant on complex financial arrangements and significant upfront capital.

For creditors, the path ahead is uncertain. Liquidators are working to determine whether there will be enough funds to meet even secured and preferential claims. Unsecured creditors, who make up the bulk of those owed money, are unlikely to see any significant recovery. As investigations continue, stakeholders will be watching closely for answers on what led to solarZero’s downfall and whether lessons can be learned to prevent similar failures in the future.