When Thomas Behling returned to his home state of Saxony-Anhalt in
2006, he was drawn by a job in the solar industry and the chance to
participate in Germany's renewable energy boom. He was fired in July.
Behling’s employer, Sovello GmbH, produced its
last solar panel on Aug. 26, sending 1,000 workers home after attempts
to find an investor to save the seven-year-old company failed. Next
door, Q-Cells SE, once the world’s largest solar-cell maker, is being
acquired by Hanwha Group of South Korea as soaring debt brought it to
the brink of bankruptcy. At least 12 German solar companies filed for
protection from creditors in the past year.
Their demise, fueled by price competition from China
and a cut in German subsidies from April, has hobbled Saxony-Anhalt’s
effort to turn a 350-hectare (1.4 square miles) business park near the
town of Bitterfeld-Wolfen into Europe’s solar-power nucleus. Even as
Chancellor Angela Merkel pins Germany’s exit from nuclear energy on
power derived from the sun and wind, a global glut of solar panels is
killing the fledgling firms.
“I believed that I was working in an industry with a
future,” Behling, a 31-year-old industrial mechanic, said in an
interview. “That it’s over now is very sad.”
The European Union yesterday threatened to impose
tariffs on solar panels from China, echoing a similar move by the U.S.,
as it opened a probe into whether Chinese manufacturers are selling them
below cost, a practice known as dumping. Tariffs however will come too
late for Sovello and many German firms.
Bosch Closing
The closures aren’t confined to Saxony-Anhalt. Robert
Bosch GmbH, the world’s biggest car parts manufacturer that has invested
at least 1.5 billion euros in its solar division, said last week it
would close a plant in the state of Thuringia by the end of the year.
First Solar Inc. of the U.S. said in April it would shutter its biggest
European manufacturing site in Brandenburg that employs 1,200 people.
China’s share of global crystalline silicon-cell
capacity surged to 66 percent last year from 26 percent in 2006,
according to Bloomberg New Energy Finance. Germany’s share sank to four
percent from 23 percent six years ago.
Crystalline-based cells are the principal device in most solar panels.
Of the world’s 10 biggest solar-cell manufacturers
with a combined production capacity of almost 17 gigawatts, eight were
mainly based in China and two in Taiwan as of last year, according to
data compiled by Bloomberg. JA Solar Holdings Co. Ltd., the biggest
cell-maker based in Shanghai, more than tripled its capacity to 2.8
gigawatts from 2009 to 2011.
Chinese panel makers led by Suntech Power Holdings Co.
are grabbing market share from European rivals in a price war that
drove solar-panel prices down by about 50 percent last year, according
to Bloomberg New Energy Finance.
Price Matters
“Quality matters, but what matters more is price,”
Heinz Steffen, an analyst at Fairesearch GmbH in Kronberg, said in an
Aug. 30 interview.
The Bloomberg Industries Global Large Solar index has
fallen about 37 percent this year as German solar companies including
Solon SE, Solar Millennium AG and Solarhybrid AG filed for insolvency.
That compares with the 2.7 percent gain in the period by the MSCI World
Index, a 1,625-member global benchmark.
The collapse flies in the face of a German plan to use renewable energy as a pillar to rebuild the economy in the eastern part of the country after reunification in 1990.
The policy helped turn a landscape that in the 1980s
was dotted with coal-fired power stations that emitted fly ash and
chemical plants that pumped waste into local rivers, earning it the
title of Europe’s dirtiest region, into a clean-energy hub.
Solar Survives
The government pumped about 375 billion euros ($471
billion) into eastern Germany in the 20 years after reunification,
according to a study by the Ifo Institute for Economic Research in
Dresden. It led industrial nations in subsidizing renewable energy generators, which supplied 25 percent of the nation’s power in the first half of this year.
German Environment Minister Peter Altmaier said on
Aug. 16 that “it’s in Germany’s interest” that the domestic solar
industry survives.
Germany’s introduction in 2004 of the world’s first
above- market rates for solar energy turned the country into the
single-biggest photovoltaic market that same year, prompting Spain,
Britain and Japan to follow suit with similar initiatives aimed at
generating “green jobs.”
Q-Cells produced its first solar cell in 2001, with 19
workers. Six years later, it had more than 1,700 employees and
generated annual sales of 860 million euros. By 2008, it had overtaken
Sharp Corp. of Japan as the world’s biggest producer of solar cells.
Purge Overcapacity
“The solar industry needs this storm to purge some of
the overcapacities, not just in Germany but in Asia too,” Fairesearch’s
Steffen said. “German solar companies still have excellent intellectual
property, so there’s hope that some will survive.”
While German cell- and panel makers have largely
stayed domestic, the U.S. solar industry, led by First Solar of Arizona,
is focusing on thin-film technology and is producing mainly in
Southeast Asia.
The U.S. government mainly supports installations with
a 30 percent investment tax credit for solar projects through 2016 and
has backed projects with billions of dollars in federal loan guarantees.
First Solar got $3.1 billion in such guarantees for three projects it
later sold.
As Chinese companies took market share from Q-Cells
and the failed Solyndra LLC of the U.S. in the last few years, they’ve
become burdened with billions of dollars in debt amid the global drop in
profit margins they helped instigate.
Chinese Financing
State-owned China Development Bank Corp. has offered
at least $47.3 billion in financing since 2010 to support the country’s
wind and solar manufacturers, though credit lines were only been
partially tapped, according to Bloomberg New Energy Finance.
Employment in Germany’s clean energy industry probably
will “stagnate” this year after creating about 31,600 jobs a year since
2004, Claudia Kemfert, a senior energy analyst at the DIW economic
institute in Berlin, said in April.
Unemployment in Saxony-Anhalt dropped from about 20.5
percent in 2003 to 11.6 percent last year. That’s still more than
Germany’s 6.8 percent national average. The state’s Economy Ministry
estimates that as many as 6,000 positions at local suppliers, including
glass makers, are dependent on the solar industry.
All Not Lost
Rainer Haseloff, the governor of Saxony-Anhalt, and
state Economy Minister Birgitta Wolff traveled to South Korea on Aug. 29
to meet with potential investors, Beate Hagen, an economy ministry
spokeswoman, said.
“The solar industry is very important for
Saxony-Anhalt and for eastern Germany as a whole,” Hagen said by phone
on Aug. 28. “We have the entire solar value chain in our region and
we’re doing everything possible so that it stays here.”
Still, all is not lost. Hanergy Holding Group, a Chinese renewable-energy operator,
agreed in June to buy Solibro, a thin-film unit of Q-Cells, pledging to
raise production at its plant in Germany’s Solar Valley to 100
megawatts.
The Fraunhofer Center for Silicon Photovoltaics CSP in
nearby Halle is conducting research into new technologies, and Calyxo
GmbH, a maker of thin-film solar panels, plans to more than triple its
output to 80 megawatts by the end of this year.
Thin-Film Technology
“Thin-film has a very attractive future,” because the
technology’s costs will continuously fall, Florian Holzapfel, the
company’s chief executive officer, said in an interview with
Photovoltaics International.
Thin-film panels are made by depositing semiconducting
material such as cadmium telluride onto metal or glass. While cheaper,
they’re less efficient at converting sunlight to power than traditional,
polysilicon-based panels. The falling cost of polysilicon has narrowed
the price gap between the technologies.
The creditors of Q-Cells on Aug. 29 backed a takeover
bid from Hanwha, which pledged to keep manufacturing and research in the
Solar Valley and keep 1,250 of the company’s 1,550 global jobs.
“We’re seeing light at the end of the tunnel for Solar Valley,” Hagen said.
Behling, who operated and monitored Sovello’s machines
for the past six years, is optimistic he can start working elsewhere by
October. While three local companies contacted him after he sent around
applications, none of his potential new employers works in the renewable energy industry, he said.
“In life, you have to move on,” he said.
Copyright 2012 Bloomberg
http://www.renewableenergyworld.com/rea/news/article/2012/09/china-price-war-draining-jobs-in-germanys-solar-valley
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