Solar industry
September 29, 2011
German producers of solar cells and modules have performed poorly this year. Hamburg-based Conergy and former top performer Q-Cells have both gone into the red, while Phoenix Solar from Bavaria also registered new losses in the second quarter.
One of the few exceptions to the trend is Bonn-based company Solarwold, which is still making a tidy profit. Its chairman, Frank Asbeck, blames China for the sector's decline.
Beijing is fuelling the expansion of its home-grown solar companies with cheap loans amounting to 21 billion euros, Asbeck said in a recent interview with the business magazine Capital. This enables Chinese companies to sell their products at prices that are roughly 30 percent below their production costs.
Subsidy tradition in Germany
Critics of Chinese government support for solar manufacturers tend to forget, however, that the German photovoltaics industry has been receiving big subsidies for years too.
Berlin's aids the sector through legally guaranteed feed-in tariffs, as stipulated in the Germany's Renewable Energy Law (EEG). Underdeveloped regions in eastern Germany have also been encouraging solar companies to set up operations in their municipalities by offering subsidies and other incentives.
Still, David Wedepohl from the German Solar Industry Association sees a crucial difference between the situations in both countries: In China, he said, cheap credits are only given to Chinese firms, whereas in Germany, incentives apply to domestic and foreign firms alike.
Large stocks of modules
Many companies - and not just German ones - are currently suffering because solar module prices have deteriorated at an unusually fast pace, falling 50 percent since 2008.
"That's a consequence of worldwide overcapacities," Wedepohl told Deutsche Welle, adding that factories in Asia have been growing even faster than the world market.
The situation has been compounded by recent reductions to many European countries' subsidy schemes for solar-powered electricity. In Germany, the EEG stipulates that the feed-in tariffs be reduced on an annual basis.
Industry with long-term view
Despite poor performance this year, the German solar industry remains optimistic in the long term. Photovoltaics will increase in importance in other countries, Wedepohl said.
Even if the global market share of German solar companies decreases, their turnover will still grow in the long run, he added. This will, however, mean German firms will have to leave the cozy domestic scene and conquer foreign markets.
Report: Jutta Wasserrab / nh
Editor: Sam Edmonds