The news came on Tuesday, just a month after another major player in Germany's solar industry, Q-Cells, went out of business.
The recent slashing of state subsidies for domestic solar panels installation was the main reason for the closure – it had dramatically reduced demand for the panels, First Solar CEO Mark Widmar said in a statement.
While the decision “was not one we took lightly,” Widmar said in a statement, the production of photovoltaic cells – solar panels - in Germany was no longer beneficial for the company.
More than 1,200 people now have until October to shut the plant down and find other work. A number of staff in the Mainz sales base will also lose their jobs, the company said.
Worldwide, more than 2,000 people – a third of Arizona-based First Solar's manpower – will lose their jobs over the coming year.
First Solar was one of the largest solar panel producers worldwide and had kept going when other companies collapsed. But in 2010 it reported losses of €30 million and share prices plummeted.
Brandenburg State Premier Matthias Platzeck said he was concerned by the plant closing down and said the government would “do everything possible to support the area.”
Green parliamentary party leader Jürgen Trittin told the Berliner Zeitung newspaper he was disappointed, blaming the government's decision to stop solar panel subsidies for putting manufacturers out of business in Germany.
The former environment minister singled out Economy Minister Philipp Rösler and Environment Minister Norbert Röttgen for particular blame.
“Thanks to Rösler and Röttgen eastern Germany is on its way to being de-industrialised for the second time.”
“Their misguided energy politics have driven the German solar industry to bankruptcy and ruined ten years of successful work,” Trittin added.