Published on June 8th, 2012 | by Andrew3
Westinghouse Solar to Ship “Plug n’ Play” DIY Solar Panels Down Under
Westinghouse Solar apparently sees a bright future in Australia. In the midst of merging with CBD Energy, one of Australia’s largest non-utility suppliers of solar energy equipment, Westinghouse and CBD on June 5 announced they are to begin distributing Westinghouse’s DIY “plug n’ play” solar power systems, dubbed Instant Connect, in Australia.
“In parallel with our efforts to complete our pending merger with CBD, both companies are committed to growing the business in a collaborative effort. As a first step, CBD, through its solar subsidiaries, has agreed to market and install our solar power systems in the Australian and other international markets,” Westinghouse Solar CEO Margaret Randazzo stated in a press release. “The Australian market enjoys a sound regulatory environment for solar, and provides an opportunity for us to grow revenue in a non-US market devoid of risk of punitive tariffs.”
For its part, CBD sees promise in Westinghouse’s award-winning plug n’ play DIY solar PV systems, and in the brand recognition of the Westinghouse name. “A key reason for pursuing this merger was the strength of the award winning technology that Westinghouse Solar possesses,” explained CDB managing director and CEO Gerry McGowan. “When coupled with the significant brand awareness the Westinghouse name provides, one of the first items on our agenda was to bring these integrated ‘plug-and-play’ solar power systems, with fewer parts, superior safety and faster install times to the Australian market.”
Australians installing more rooftop solar than grid operators can handle
“After demonstrating the technology to our customers, they have shown strong interest and we are working to make this innovative technology available to them as soon as possible. Other key features such as the web-based system monitoring and better energy collection will be important advantages in the Australian market, which installed in excess of 830 megawatts of solar last year.”
Shipping its Instant Connect solar panels to CDB in Australia may well be a forerunner of assembling them there. In a joint venture with Tianwei, one of China’s largest renewable energy companies, CBD, through eco-Kinetics, is establishing a solar panel and equipment manufacturing operation on Queensland’s Gold Coast.
Australians have taken to installing rooftop solar PV systems so enthusiastically that electricity grid operators have been capping the amount of grid-connected residential solar PV systems.
The issue highlights the ambivalence of large-scale, centralized electric utilities have for distributed rooftop solar power, and the importance of buildiing out smart grid and transmission infrastructure if utilities are to really capitalize on solar and wind energy potential and market opportunities.
Australians’ average energy bills have been rising fast while the cost of solar PV systems has fallen dramatically. The cost of installing a solar PV system in New South Wales (NSW) ranged from A$2,000 ($1,970) to A$12,000 ($11,811), depending on size of system as of October 2011, according to CBD. That results in a payback period of six years at projected electricity prices.
Average energy bills in NSW are now costing between 20 and 30 cents a kilowatt hour, reaching 43 cents at peak. Solar energy, in sharp contrast, costs 5 cents.
CBD-Westinghouse Solar Merger
Westinghouse Solar and CBD Energy signed a definitive merger agreement on May 9. Expected to close in Q3, the agreement calls for Westinghouse Solar shareholders to receive approximately 3.7 CBD common shares for each share held. Preferred shareholders are to receive CBD preferred shares convertible into common stock. Taken together, Westinghouse Solar common and preferred shareholders will own approximately 15% of the merged company, shares of which are to trade on a US stock exchange.
The merger with CBD puts Westinghouse Solar on firmer financial ground while also providing a base to expand internationally. That’s not to say that Westinghouse Solar expects to bow out of the US market by any stretch, however.
On the contrary, management of both companies say they intend to expand in the US. “The merger with Westinghouse Solar is expected to be highly beneficial for CBD. The US market is rapidly developing into one of the largest and most stable end-markets for solar energy systems,” McGowan explained. “The merger provides CBD an immediate point of access with an experienced management team capable of driving rapid expansion for the combined business.”
“We expect to leverage the Westinghouse Solar relationships to provide new opportunities for distributing energy-efficiency products and services produced by our Industrial Energy Efficiency Division and to create new outlets and applications for our proprietary energy storage technology. The merger is an important step in CBD’s strategy of growing a portfolio of revenue streams diversified across profitable customer segments, geographies, and technologies.”
CBD’s also been expanding in Europe. It has secured a $25 million credit facility that enables it to prioritize and develop and expand its project pipeline of European turnkey solar PV projects on a Build-Operate-Transfer (BOT) model primarily aimed at institutional investors. Management estimates the credit facility will “support the development and sale of solar projects totaling more than A$35 million ($34.45 million) revenue per quarter.”
CBD’s total revenue has grown substantially in recent years, from some A$17 million ($16.7 million) as of June 30, 2009 to A$165 million ($162.4 million) at the end of fiscal year 2011. Cash flow, as measured by EBITDA (earnings before interest, taxes, depreciation and amortization) have improved from a negative A$3.3 million to a positive A$7.9 million over the three-year period.
Keep up to date with all the hottest cleantech news by subscribing to our (free) cleantech newsletter, or keep an eye on sector-specific news by getting our (also free) solar energy newsletter, electric vehicle newsletter, or wind energy newsletter.