Germany

Should The Solar Power Industry Expect Dark Days Ahead?

The bankruptcy of America’s Evergreen Solar has sent chills down the spines of German solar manufacturers. Solar energy company stocks are crashing on the market. But just how vulnerable is the industry?

The Kollbach solar power plant in Bavaria, Germany
The Kollbach solar power plant in Bavaria, Germany
Jennifer Lange

MUNICH -- A US bankruptcy - the one of Evergreen Solar, based in Marlboro, Massachusetts - has shocked the German solar industry. On Tuesday, the news led to big sell-offs of solar stocks on the Frankfurt stock exchange. Phoenix Solar fell 5.7%, SMA Solar and Solarworld over 4%. The Ökodax fell 2.8%.

Investors are scared, wondering now if the same thing might happen to German solar players. "It's not a good sign for German solar firms, who face the same global cost and price pressures as Evergreen Solar," a dealer said.

Germany is the world's top user of solar technology. As of 2010 it had more than 17,000 megawatts (MW) of installed photovoltaic generating capacity, more than five times the capacity in Spain, which is second on the list.

What lead to Evergreen Solar's ruin was competition from China. For two years, the American solar pioneer tried every way it could to stand firm against its cheaper-priced Far Eastern rival. It even moved its own manufacturing base to China.

Nothing doing. Markets are suffering from massive over-capacity, and the fact that leading solar takers like Germany are no longer receiving government subsidies.

Exacerbating the situation in Germany is the fact that CFO Oliver Blamberger of Solar Millennium is leaving the company – under his own steam, according to the company. Martin Löffler will be replacing him as of Sept. 1, 2011, at least until the end of the business year.

Parallel to this, the power station developer is on the radar of investigators on suspicion of insider trading. The German Federal Financial Supervisory Authority (BaFin) is following up information to this effect, a spokeswoman said in confirmation of a Süddeutsche Zeitung report. In late 2009, when Solar Millennium hired former EnBW head Utz Claasen, board member and company founder Hannes Kuhn bought more company stocks before the official announcement had been made.

Things also don't look good for the Saxon firm Roth & Rau. In the first semester, the company fell deep into the red - 18 million euros - from lack of orders and revenue shifts. The previous year it had shown a 5 million euro profit, but in the first six months of 2011 turnover went down 22% to 93 million euros. In light of cancelled orders, the company also can't come up with a prognosis for the future.

Read the original article in German

Photo - Pure3d

You've reached your monthly limit of free articles.
To read the full article, please subscribe.
Get unlimited access. Support Worldcrunch's unique mission:
  • Exclusive coverage from the world's top sources, in English for the first time.
  • Stories from the best international journalists.
  • Insights from the widest range of perspectives, languages and countries
Already a subscriber? Log in
Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!
Geopolitics

Greater Russia? Four Scenarios For Putin’s Expansionist Ambitions

A mind map of the Russian leader’s possible plans to increase his influence, and expand his territory.

Vladimir Putin at the military parade in Russia

Kremlin.ru
Anna Akage

Vladimir Putin has always had his eye on the neighborhood.

In Georgia, the border with Russia has effectively been controlled by Moscow’s FSB security services since 2008. Washington this week accused Russian agents of recruiting pro-Kremlin Ukrainian operatives to take over the government in Kyiv and cooperate with a Russian occupying force. Meanwhile, all of Belarus has been on a short leash for two decades.

Keep reading... Show less
Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!
You've reached your monthly limit of free articles.
To read the full article, please subscribe.
Get unlimited access. Support Worldcrunch's unique mission:
  • Exclusive coverage from the world's top sources, in English for the first time.
  • Stories from the best international journalists.
  • Insights from the widest range of perspectives, languages and countries
Already a subscriber? Log in
THE LATEST
FOCUS
TRENDING TOPICS
MOST READ