Genesis Energy has expressed interest in acquiring the embattled solar power company SolarZero, but its chief executive, Malcolm Johns, has cautioned that the deal comes with significant hurdles. The liquidation of SolarZero in late 2024 has left its commercial structure tangled, requiring resolution before any serious acquisition discussions can take place.
A Complicated Takeover Target
SolarZero, once a dominant force in New Zealand’s solar energy market with 15,000 customers and a 40% market share, was placed into liquidation in November 2024. Its collapse followed unsustainable operating losses and liquidity constraints despite significant backing from US investment giant BlackRock, which had acquired the company for $110 million in 2022.
The liquidation process revealed the intricate financial arrangements within SolarZero, including a securitisation structure designed to protect long-term customer contracts. Two entities associated with SolarZero remain under the control of the Public Trust, safeguarding household contracts and funds used for equipment financing through the New Zealand Green Investment Fund (NZGIF). The remaining five companies, previously owned by BlackRock, are now in liquidation, with debts exceeding $40 million.
According to Johns, Genesis Energy quickly assessed the possibility of acquiring SolarZero when the company went under but found its financial and legal complexities daunting. “The commercial structures inside SolarZero are among the most complex we’ve ever seen. Really, that needs to be cleaned before you might have a pathway,” he told BusinessDesk.
Strategic Fit for Genesis
Despite the complications, Genesis sees potential advantages in acquiring SolarZero. The company has been aggressively expanding its renewable energy portfolio, aiming to develop 500 megawatts (MW) of grid-scale solar by the 2028 financial year. It has also secured large-scale solar developments, including a 127 MWp project in Edgecumbe and a 67 MWp project in Leeston.
Genesis’ subsidiary, Ecotricity, already plays a key role in SolarZero’s operations, acting as the electricity retailer for most of its customers. With Ecotricity recently coming under full Genesis ownership, the acquisition of SolarZero could allow Genesis to consolidate its position in the residential solar market while preventing disruption to existing customer contracts.
Additionally, Genesis has been diversifying into electric vehicle (EV) infrastructure, acquiring a majority stake in charging network operator ChargeNet. An acquisition of SolarZero could complement these efforts, further integrating clean energy solutions across its portfolio.
Financial and Regulatory Challenges
The potential deal is not without risks. SolarZero’s collapse left behind a debt burden of more than $40 million, which could strain Genesis’ financial position. While Genesis posted a strong financial performance in the first half of FY25—reporting earnings before interest, tax, depreciation, amortisation, and fair value adjustments (EBITDAF) of $216.5 million—its recent investments in solar farms and EV infrastructure may limit its appetite for further financial exposure.
Regulatory scrutiny is another concern. New Zealand’s energy sector has been under increasing government and public scrutiny, particularly regarding market consolidation and competition. Any acquisition of SolarZero by Genesis could face challenges from regulators assessing whether it reduces market competition or creates unfair advantages.
What Happens Next?
With liquidators still working through SolarZero’s financial structure, it remains unclear when or if Genesis will make a formal bid. Johns has indicated that much depends on the outcome of the liquidation process and the structure that emerges. “They’ve got to put something forward to the market for us to engage with, essentially,” he said.
Meanwhile, Ecotricity has reassured SolarZero’s customers that their agreements remain intact. Payments are being managed by the Public Trust, ensuring service continuity while the liquidation process unfolds.
If Genesis proceeds with the acquisition, it could solidify its leadership in New Zealand’s renewable energy market, expanding its footprint in residential solar while integrating SolarZero’s customer base into its broader energy strategy. However, if the deal falls through, the fate of SolarZero’s assets remains uncertain, potentially leaving room for other players to enter the market.