German solar-panel manufacturers face financial ruin

DPA/The Local
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German solar-panel manufacturers face financial ruin
Photo: DPA

The German solar industry, once at the forefront in its field, has been hit hard by the bad economy and increasing competition from Asia, the Financial Times Deutschland reported Monday.


After seeing great success in recent years, the young industry is facing financial ruin after the first six months of this year. And solar experts told the paper this is just a sign of the beginning of what is to come.

“Many of the German solar cell and module manufacturers will not outlive this crisis,” UBS analyst Patrick Hummel told Financial Times Deutschland.

Bosch subsidiary Ersol reported its first loss since becoming a public company in 2005, losing €15.8 million in the first six months. Market leader Q-Cells recorded a loss of €119.1 million in the first half of 2009 – whereas a year ago the company reported a profit of €47.6 million. Last week it said it was making cuts to save money, including sacking 500 employees.

Much of the demand for solar panels came from within Germany, as people were ordering them to install on their rooftops to supplement their energy supply. But now those orders are being filled by manufacturers in Asia, and at a lower price.

Chinese suppliers like Suntech Power, Yingli Solar or Trina Solar are benefiting from the demand from the German market. In the last two years, the solar panel market share of Chinese companies has risen from almost nothing to 30 percent. Taiwan, South Korea and India are also getting a piece of the action as well.

Thanks to lower labour costs, UBS estimated that the solar panels being sold by Asian companies have price tags two-thirds that of one created by a German company.

“The Asian cell and module manufacturer will displace the Germans – except the German manufacturers that have their production in Asia,” said Anne Kreutzmann, editor-in-chief of the solar industry journal, Photon.

When announcing the loss, Ersol boss Holger von Hebel referred to pricing pressure and the overcapacity of the solar-panel manufacturers in Germany. In order for Ersol to cope, nearly half of its staff is already on reduced hours to avoid direct layoffs.

But executives at Ersol are predicting the price of a German-made solar panel to fall 30 percent in order to deal with the current overcapacity in the industry.


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