Summarised by Centrist
The New Zealand Green Investment Finance (NZGIF) bank faces a major crisis after SolarZero’s liquidation revealed its $115m public loan relied on overly optimistic revenue projections.
A $22m portion of the loan was tied to “ancillary revenues” from SolarZero’s virtual power plant (VPP), expected to sell power back to the grid. However, actual earnings fell far short, jeopardising taxpayer money.
SolarZero initially projected $75 per battery per month in grid sales but later downgraded that to $30. Sources now reveal it earned less than $1 per battery. NZGIF took the riskiest portion of lending, betting on future revenues that never materialised. The liquidation leaves taxpayers exposed, with NZGIF chair Cecilia Tarrant resigning. Tarrant, a ministerial appointment to the NZGIF Board in 2019, is a qualified lawyer with experience in finance.
Critics argue the loan’s structure prioritised unproven technology over fiscal prudence. Liquidators have warned that recovering funds will be challenging without a buyer to revive SolarZero’s VPP operations.
The collapse has implications for New Zealand’s energy strategy, as electrification increases demand. Former SolarZero policy head Eric Pyle called VPPs “the future” but acknowledged the risks. Tarrant defended NZGIF’s role in fostering green innovation, but the government is now reviewing the agency’s mandate as taxpayer losses loom.
