Family-owned solar panel business collapses as recent recall casts long shadow over industry

The Solar Guys, a family-run solar panel installation business which has been operating for more than 30 years, has collapsed into liquidation as the domino effect of a recent recall continues to affect small businesses in the solar industry.

The Queensland-based solar panel installation business was founded by John Muldoon as a sole trader in 1982, with his son Dane joining as a partner in 2007 and his daughter Tessa joining soon after.

The company expanded rapidly in recent years, winning Channel 7 Sunrise’s Business Builder of the Year in 2010 and coming 11th in BRW’s Fast 100 for 2011, with 24 staff and $9.48 million in revenue.

However, the rapid growth of The Solar Guys came to an abrupt end on June 10, with a notice on the company’s website blaming a recent recall of Avanco-branded solar power circuit breakers.

“The Queensland government has recently issued a mandatory recall notice on an ‘Avanco’ branded component used in solar power system installations called a ‘DC Isolator’,” said The Solar Guys.  

“Unfortunately this has left us to cover the complete costs of recalling faulty DC Isolators installed in our customers’ solar power systems during 2012. We have found ourselves unable to cover the total cost of the recall and so we’ve had to make the difficult decision to close our 32 year old family owned company.”

Jason Walter Bettles of Worrells Solvency & Forensic Accountants was appointed liquidator of the firm as of June 17 and a meeting of creditors is scheduled for June 25 in Robina.

SmartCompany attempted to contact Worrells Solvency & Forensic Accountants but did not receive a response prior to publication.

On May 12, Queensland Attorney-General Jarrod Bleijie issued a recall for 27,600 Advancetech DC switches, marketed under the Avanco brand, following advice from the University of Queensland and the Queensland University of Technology and concerns the switches may have contributed to electrical fires in homes across the state.

The Acting NSW Fair Trading Commissioner, Rob Vellar, issued a similar recall in NSW on May 19, noting that up to up to 3740 of the affected switches were sold to 19 distributors through the state.

The recalls prompted the collapse of Advancetech, with SV Partners appointed liquidators of the company on May 15.

The circuit breakers are usually placed next to a solar panel inverter, and are used to shut off electrical current if solar panels become overloaded, as well as during maintenance.

However, a fault with the enclosure on the Avanco switches meant that, in some circumstances, moisture could enter inside the enclosure, potentially causing the switches to catch on fire.

According to the NSW Office of Fair Trading, there were 57 incidents relating to the switches reported in Queensland and one in New South Wales, with at least three of the units bursting into flames.

For its part, Advancetech initially dismissed reports of problems with the Avanco switches citing advice from “a leading electrical safety and compliance expert”.

“All Avanco brand DC isolators have been thoroughly tested to comply with (and in many instances exceed) all applicable Australian Standards. Independent certification by a leading and accredited Australian electrical compliance company was also obtained,” the company said.

SV Partners has since published a notice on the Advancetech website, announcing there will be no compensation or refunds to customers for the Avanco products.

“The company and we as liquidators are not able to provide any direct reimbursement, replacements, financial compensation or refunds for any loss or damage incurred as a result of the product recall,” said the liquidators.

“Our enquiries have revealed that the company does not have insurance to cover the costs of completing the product recall.”

However, SV Partners said individuals who have “suffered any loss or damage in relation to the recalled products … may submit a claim in the liquidation”.

Small businesses and consumers still using the Avanco switches are advised to switch the units off immediately.