Meridian Energy has finally wiped its hands of its solar-power business in the United States, after writing off more than $29 million in the US over previous years.
The giant 20-hectare solar plant Calrenew-1 has been sold for an undisclosed sum to SunEdison, a California-based maker and seller of photovoltaic energy products.
Meridian first announced it planned to sell the plant in July 2012, almost two years ago.
Meridian general manager external relations, Guy Waipara, said the sale was the last step in Meridian's exit from the US energy market, after five years.
Despite the earlier declared writedowns in the US, he said the project had come out well ahead of what Meridian put in.
Calrenew-1 cost $24m to build but, after US government subsidies, revenues and the sale price, Meridian had come out "comfortably ahead - but we have not made a lot of money", Waipara said. "We have done all right".
Meridian would not say what Calrenew was sold for but that would show in this year's annual report.
Calrenew had been making revenues of more than $2m a year, with a low-cost of operation. The US government also paid back 30 per cent of the capital cost of the solar plant as a cash grant, just under $8m.
The new owner, SunEdison, would pick up the ongoing tax benefits of Calrenew, with an accelerated depreciation regime, and so would be able to write that off against profits made elsewhere.
But given loans to the US business were initially worth more than $56m and are now down to about $27m, about half the money spent in the US has been lost.
"We have run a successful project [Calrenew] but we have spent money elsewhere. Like a lot of projects in New Zealand, we couldn't get them to the start line and they have cost money," Waipara said.
Part of the earlier writedowns included the costs of almost $6m on two solar project proposals that did not go ahead and so were written off. Meridian had also run a team of six people in the US for the past five years, which had cost money.
Meridian Solar Holdings was created after the power company bought California-based Cleantech for $8 million in 2009.
In 2009, Meridian said it wanted to become the market-leading solar photovoltaic developer in its home markets. Announcing the deal to buy Cleantech, chief executive Tim Lusk said at the time that adding solar to its portfolio would ultimately bring the technology to New Zealand, possibly by 2014.
Meridian said yesterday that the number of residential solar panel customers in New Zealand had risen by 1000 to 1700 in the past year, but still a small fraction of Meridian's 278,000 power customers in total.
- The Dominion Post