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German Solar Companies Are Going Bankrupt

From Germany’s Der Spiegel:

Twilight of an Industry: Bankruptcies Have German Solar on the Ropes

By Stefan Schultz
04/03/2012

German solar panel manufacturer Q-Cells filed for bankruptcy on Tuesday.

The German solar industry is at a turning point. The bankruptcy of Q-Cells this week shows that the days of German solar cell production are numbered. Asian competitors took the lead years ago, and German government subsidies were part of the problem.

It turns out that the German government thought they were subsidizing their own industry, but they were accidentally subsidizing the Chinese. (As well, as intentionally subsidizing them, too But to a far lesser extent.)

It wasn’t so long ago that people viewed Q-Cells as an energy company of the future. At one point, it was the world’s largest manufacturer of solar cells and quarter after quarter, it topped analysts’ expectations

The energy company of the future looks as though it may no longer have one. The company, it turns out, simply wasn’t prepared for the fast changes that have buffeted the industry.

This seems to be a common refrain from industries in a ‘command economy.’

But Q-Cells’ insolvency also comes as a great shock to the Germany’s solar industry. It is already the fourth major bankruptcy in a sector in crisis, and it underscores the degree to which German solar firms are being outpaced by competition from Asia — despite billions in German government subsidies granted each year to the industry

In December 2011, two major solar companies slid into bankruptcy: Berlin-based Solon and Erlangen-based Solar Millennium.

In March 2012, Freiburg-based Scheuten Solar, the firm that presented what was the world’s largest solar module at the time eight years ago, declared bankruptcy. The same month, power plant producer Solarhybrid and the Frankfurt an der Oder-based Odersun, which had been prestige projects supported by political leaders in the eastern state of Brandenburg, also filed for insolvency proceedings. Other bankruptcies are likely to follow.

The worst hit in the German solar crisis are companies that made bad business decisions. Most of the companies effected failed to wean themselves from reliance on government subsidies. The companies had all been aware that the market was rapidly changing, but they reacted too late or too slowly. Solar subsidies had been a highly effective political means of promoting the environmentally friendly technology, but in a rapidly maturing market, they are quickly losing their impact

Even worse, the German government has also directly and indirectly subsidized Chinese solar companies to the tune of €100 million [$130 million] as part of development aid efforts aimed at promoting China’s green industries

Meanwhile, Asian companies continue to steam ahead of their German competitors. In 2008, China manufactured 33 percent of the world’s solar cells, but that figure grew to 57 percent last year. This week, the German government significantly reduced its subsidies for promoting solar energy. But the boom in cheap cells will continue and it will radically change the solar energy market

Experts like Michael Schmela, editor in chief of the industry publication Photon International, see no future for the companies based in Bitterfeld-Wolfen. "The days of cell production in Western countries is numbered," he said recently.

Somebody needs to tell this to Mr. Obama and Mr. Chu.

This article was posted by Steve Gilbert on Thursday, April 5th, 2012. Comments are currently closed.

2 Responses to “German Solar Companies Are Going Bankrupt”

  1. GetBackJack

    Bovine Eschatology.

    My solar cell electricity is not just working fine and dandy, we’re using the excess to make (essentially) no-cost hydrogen and converting a New Holland T6000 series tractor to run of hydrogen along with a Case skid steer and a Ford F250. If that goes the way we’ve engineered, we’ll be converting all our haying equipment next year.

    Solar ain’t going away. Not by a long damn shot.

    Can’t ya’ll recognize a planted article when you see one? If you can’t, then you need to learn up on …. http://www.prnewswire.com/ the largest media output company in the world and supplier of nearly 87% of what media outlets call “news”.

    Don’t get suckered by clever market-muscle spin pieces designed to influence.

    This one company may be going under and a whole lot of’em are. But that’s the problem with a bubble. The “Me-toos” who tried to jump on a band wagon and make a buck when they hadn’t earned the right to be in their market, get crushed.

    During the 90s tech-bubble, internet startups and wild ass tech ideas got billions for fatuous gassy notions. But information technology didn’t die off, or shrink just because the poor plays failed.

    Remember that when you read the sky is falling re: Solar.

  2. canary

    Saw on FOX another new round of billions is going to solar companies. Money set aside.




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