Chris Parratt, sonnen’s Australian managing director, told ABC Radio Adelaide this morning a proportion of the company’s investment was effectively “underwritten” by the State Government.
“’Underwritten’ is probably the wrong term but, yes, you could term it that way,” he said, adding that the number of batteries subsidised was “in the thousands”.
He refused to elaborate on the exact nature of the subsidy, citing the “commercial basis” of the contract, but conceded: “They are supplying a support for us to set up here.”
“They will be supporting us in our efforts in Asia [and] as part of being a manufacturer in Australia we get certain privileges for the Industry Participation Plan,” he said.
A Government spokesman told InDaily the administration had provided a “volume guarantee to encourage sonnen to establish a new factory at the old Holden site at Elizabeth” but that “no grant funding has been provided”.
“The exact nature of the volume guarantee is commercial in confidence,” they said in a statement.
The Government yesterday announced that sonnen would establish an Australian headquarters at the old Holden site, assembling and manufacturing 50,000 energy storage systems over the next five years and creating more than 430 manufacturing and installation jobs.
It followed a similar announcement on February 22 by the former Labor Government, whose release at the time declared: “More than 430 manufacturing and installation jobs will be created after German company sonnen announced plans to establish a battery manufacturing centre in Adelaide and relocate its Australian headquarters from Sydney.”
“Under an agreement… signed last week, sonnen plans to locally manufacture 50,000 energy storage systems in Adelaide over five years,” it continued.
The Liberal version of the announcement followed confirmation on Saturday it was forging ahead with its $100 million subsidy scheme, which would give 40,000 SA households grants of up to $6000 to pay for the installation of home battery systems.
The Government has not responded to questions about whether customers who purchase sonnen batteries will be given preferential consideration, although the scheme is “open to [customers of] any SA battery manufacturer”.
The battery subsidy scheme stipulates that suppliers and installers must first “be required to qualify as a ‘System Provider’” and that “as part of the qualification process [they] will be required to specify the extent to which their products and services contribute to the South Australian economy”.
“In assessing applications, priority will be given to System Providers that commit to installing approved battery systems that are manufactured or assembled in SA,” Saturday’s media release stated.
In comments today attributed to Trade, Tourism and Investment Minister David Ridgway, the Government said it was “confident that grants of up to $6000 for 40,000 households to purchase home storage batteries will ensure the volume guarantee with sonnen isn’t activated”.
“The agreement with sonnen should deliver 450 jobs in northern Adelaide at no cost to South Australian taxpayers.”
It comes just days after Treasurer Rob Lucas – while handing down his first budget in 17 years – distanced the Liberal administration from its previous rhetoric against “picking winners”, saying: “I’m not naïve enough to say there’ll never be an instance of this government picking winners, but there’ll be much less emphasis in this area than under the previous government.”
In Opposition, the Liberals railed against a lack of transparency and a ‘picking winners’ mentality in deals such as a $10 million subsidy to entice OZMinerals to set up its headquarters in SA.
Labor Opposition spokesman Tom Koutsantonis said there was “a lot of opaqueness in this deal”.
“It’s good that [sonnen] are here, no doubt about it – and there’s nothing wrong with the Government giving them a subsidy to come here,” he said.
“But there are a lot of opaque answers being given to us about the nature of the underwriting… I think it’s important that the Government tell is what exactly have they signed with sonnen.
“At the very least they need to tell us what our exposure is.”
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