GREEN DEALS: Solar surprise

The withdraw of the solar rebate gets manufacturers offside; auditors question Dyesol’s ability to operate as a going concern; and TRUenergy looks to expand its renewables portfolio.

The federal government’s decision to abandon the solar hot water rebate (Renewable Energy Bonus Scheme) on Tuesday afternoon has been a major talking point, with manufacturers critical of the lack of consultation.

An initiative of the Coalition government in 2007, the Renewable Energy Bonus Scheme offered rebates of up to $1,000 for households that installed solar hot-water systems. It was always slated to end after five years (i.e. 2012) but the exact date for its cessation was widely expected to be June 30, the end of the financial year (and basically five years from its beginning on July 17, 2007). Hence the move to end the offer for rebated as of close of business Tuesday was met with more than a hint of surprise from the industry.

One can never be too sure about the goings on behind the scenes in Canberra, but with a budget surplus promise to keep, it does have a sense of desperation about it. If they kept offering the rebate until June 30 (and announced the final date so manufacturers could have a final advertising push) then an impact would have been felt on the 2012/13 budget as people would buy before June 30 and apply for the rebate after this date.

As it stands, “some amount [has been] allowed in the next financial year for the complete orderly runoff of this program”, Parliamentary Secretary for Climate Change, Mark Dreyfus, said. It would’ve been much more if the final date was June 30 instead of February 28. Dreyfus added that the lack of warning was “good budget practice”.

The industry has said that as many as 7,200 jobs (1,200 in manufacturing and 6,000 in installation) could be at stake. It is a blow to the likes of Dux and Rheem, but Dreyfus indicated that the government would be offering no special assistance.

Other clean energy subsidy programs are also likely to face scrutiny in the lead-up to the introduction of the carbon price.

TRUenergy

The subsidiary of Hong Kong-listed CLP Group could soon be on the Australian Securities Exchange, with CLP publicly declaring it was mulling a float of TRU, one that has been rumoured for some time. A final decision had yet to be made and any listing appears likely to wait until at least 2013 given prevailing market conditions.

TRUenergy is planning to build a 123MW wind farm at Stony Gap in South Australia, as part of its renewable energy strategy. The energy retailer has also secured options to acquire wind farm sites in NSW with a potential total capacity of 250MW.

“Maintaining a balanced generating portfolio, and complying with federal government policy on renewable energy capacity, will require TRUenergy to continue to increase its investment in renewable energy sources throughout this decade,” CLP Chief Executive Andrew Brandler said.

Dyesol

ASX-listed Dyesol has cancelled its equity line of credit due to “the significant progress made recently in the planning for commercialisation of the company's technology with its major project partners,” but its auditors are concerned by its financial position. The maker of dye-sensitized solar cell materials and technology said the move should help relieve pressure on its share price, although this is yet to materialise. It is currently languishing at 19 cents, a cent above its 52-week low of 19 cents and well off its year-long high of 88 cents.

While the company sounded bullish about its progress in a statement earlier in the week, its auditors are anxious about the company’s ability to operate as a going concern without raising funds soon.

“We draw attention to Note 2 in the financial report which states that additional capital in order for the group to continue as a going concern and further progress the development of its technology and intellectual property. These conditions indicate the existence of a material uncertainty that may cast significant doubt, and therefore, the company may be unable to realise its assets and discharge its liabilities in the normal course of business,” BDO said in its auditor’s report.

After cancelling the line of credit the company is set to raise $3 million through a share purchase plan that will be underwritten by Austock. Under the SPP offer, priced at 18 cents per share, Dyesol said additional share subscriptions would be accepted up to a maximum raising of $6 million.  

Highlighting the need for more cash is the company’s significant leakage of funds in the first half of the financial year. Dyesol’s cash position decreased by $3,611,328 in the six months to December 31 (which was even after raising over $3 million through the issue of shares), leaving them with just $2,671,364 cash on hand.

In a big week of news for the solar firm, the company also said the executive and board roles of the company founders “must be changed” as a transformation of the business takes shape.

Moree Solar Farm

Pacific Hydro, the Australian-based member of the Moree Solar Farm consortium, has said it is now seeking less money from the government for the project that is again vying round one funding from the Solar Flagships program.

General Manager Lane Crockett told ABC radio that the figure they were now looking for was “substantially reduced” thanks to the sharp drop in solar panel prices over the past year (around 50 per cent) and the high Australian dollar.

Mr Crockett added that the company expected a decision from the government in late May or June.

The other shortlisted candidates they will again have to beat out are AGL, Infigen-Suntech and TRUenergy, with the latter two publicly confirming they had resubmitted their bids by the Friday deadline. AGL is believed to have done so as well.

Hydro Tasmania

Hydro Tasmania has offloaded a 75 per cent stake in its Woolnorth wind farms, Bluff Point and Studland Bay, to Guohua Energy Investment Corporation. The Australian company will retain ownership of 25 per cent of the wind farms.

The $88.6 million deal, the Chinese group’s first foray into Australia, will assist financing $400 million Musselroe Wind Farm project, a project Guohua could get involved with at a future date. The deal was first announced in December, but was only finalised this week.

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