German solar systems supplier zolar GmbH has filed for self-administration with the district court in Berlin-Charlottenburg to continue its restructuring efforts to transition as a B2B business.
The company took the strategic decision to become a B2B company and transition away from the residential solar business, owing to persistent market and competitive pressures in the residential segment over the past years. The decision entailed laying off close to 200 employees in 2024 (see Europe Solar PV News Snippets: Alight Raises €110 Million From Rabobank & More).
It now focuses entirely on software solutions for small- and medium-sized PV companies; however, the transition hasn’t been smooth.
“After withdrawing from the private customer business last year, we have a clear plan to reposition ourselves as a future-proof partner to the solar trade,” said zolar CEO Torben Schwellnus. “However, we realized that our previous plans for repositioning with a profitable B2B business could not be implemented in the required time. Therefore, we decided to take advantage of the restructuring opportunities offered by insolvency law to intensify and accelerate the ongoing realignment.”
According to the management, its financial stress stems from legacy costs tied to its former B2C model. As it shifts to B2B, these obligations have pushed operating costs to nearly double those of peers.
Under self-administration, zolar expects to be able to complete its repositioning and become an end-to-end SaaS solution for local companies as zolar Installer Services.
The court has appointed Dr. Philipp Grauer from the law firm Münzel & Böhm as provisional administrator for zolar. It will be able to continue business operations under the existing management with salaries secured through insolvency benefits until July 2025.
Restructuring experts will advise and support the zolar management during the restructuring.
“The self-administration process offers clear cost relief and opens up the opportunity to structure zolar's SaaS activities so that they become sustainably profitable,” said Attorney Dr. Hans-Joachim Berner, a partner at WILLMERKÖSTER, an insolvency specialist law firm. “We will now work together on this. This also includes the search for additional investors.”
The drop in residential solar demand in Germany has had a catastrophic impact on several of zolar’s peers. Additionally, B2B companies have had it rough too as demand dropped after escalating post the Russian invasion of Ukraine as the government encouraged attempts to wean itself off Russian energy. The interest in expensive solar systems fizzled out amid high interest rates and lowering of conventional electricity prices (see Financial Difficulties Force More German PV Companies Into Insolvency).
Competition from cost-competitive Chinese products and financial stress forced solar PV manufacturer Meyer Burger to file for insolvency for 2 of its German subsidiaries (see Meyer Burger Files Insolvency For 2 German Subsidiaries).
The new German coalition government has made its stance clear, too. While it has pledged support to renewable energy, renewables will not be the center of its energy policy. The country’s new Federal Minister for Economic Affairs and Energy, Katherina Reiche, said her government plans to build more controllable power plants and support new technologies like carbon capture and storage (CCS) and carbon capture and utilization (CCU) to cut emissions.
