If you are shopping for solar, you may have been warned about phoenix companies which, like their namesake, are reborn from their ashes. But how much do you really know about them and, more importantly, about how to avoid them?
What is a phoenix company?
Although there is no legal definition of a phoenix company, the Australian Securities & Investments Commission, describes this practice as an illegal activity involving “t he intentional transfer of assets from an indebted company to a new company to avoid paying creditors, tax or employee entitlements.”
In order words, phoenix companies are commercial entities which have gone into voluntary administration or liquidation before reopening a new business with the same trading name, location and directors, leaving staff, suppliers and clients unpaid.
Phoenix companies are difficult to prove, but the ASIC, the ATO, the Department of Employment and the Fair Work Ombudsman have joined forced to fight against them by implementing processes for creditors and employees to recognize and report phoenix companies. However, if you have purchased a good or service from a Phoenix company, you need to turn to the ACCC.
Solar PV customers should be wary of phoenix companies, as the warranty with which their solar power system comes (usually 5 years on the inverter and 10 years on the panels) will become void if their retailer is put into administration or liquidation.
Don't wing it!
If you are currently in the market for solar, here are a few things you can look at to ensure you are dealing with a trustworthy company:
- The number of years the company has been in business: a basic ABN search will allow you to determine whether the retailer is genuine and how long it has been in the solar market.
- The company’s electrical licence number: solar providers are obliged by law to publish their electrical licence number on their website and any other advertising platform.
- Unbiased online reviews: websites like Product Review and Trustpilot compile independent customer reviews which will provide you with some feedback about the company you are thinking of doing business with.
- Finally, online discussion forums such as Whirlpool, can be a good avenue to get some of your questions answered by other solar users.
In addition, we have listed 10 questions to ask your prospective solar installer in order to avoid unreliable businesses.
Let us take you under our wing
Solargain provides maintenance and repair services to customers whose solar power systems were installed by companies which are no longer in operation.
Whether you are seeking a reliable company to install your solar power system or to look after your solar repair needs, contact Solargain on 1300 73 93 55 or fill out our online enquiry form.