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German solar energy firms face economic ruin

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German solar energy firms face economic ruin
Photo: DPA
14:51 CEST+02:00
Buffeted by the bad economy and growing competition from Asia, German solar energy firms are facing financial ruin just as the industry fears the new government will abandon them.

"German solar energy companies are earning almost no money because demand has collapsed," Jörg Sutter told the latest edition of business magazine Wirtschaftswoche.

"If a solar panel is a good investment for households, they are not very interesting for institutional investors," he added.

Solar energy produces less than one percent of all electricity used by the biggest European economy and is currently heavily subsidised by the government.

According to weekly paper Die Zeit, state subsidies could cost Berlin a

total of €77 billion by the time they are finally phased out.

The sector knows that the money will run out, but companies fear the process will be sped up by a new centre-right coalition government that has also expressed interest in prolonging the life of Germany's nuclear reactors.

In Spain, one of the biggest markets for solar panel makers, state funds no longer underpin sales.

German manufacturers have enjoyed several years of strong growth but are now being hit by an economic downturn and also face stiff competition from Chinese rivals.

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