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Germany’s Solar Industry is in Peril as Big Companies File for Insolvency
It seems that almost every other month, Germany sets a new solar power record. However, despite the sunny outlook for the current state of power generation, the solar panel industry has been showing signs of distress. On Friday of last week, Conergy and Gehrlicher Solar filed for insolvency. Several weeks ago, Siemens stated that it would be closing its solar division after losing nearly $1 billion over the past two years, and Bosch has decided to leave the solar market, citing similar losses.
For Conergy, operations are still set to continue through insolvency. The company currently employs around 450 workers in its plants around Germany. They hope to move forward as normal in all sectors where possible. Many in the financial arena were surprised the company lasted so long, seeing that it had faced management upheaval, risky acquisitions, and negative cash flow for many years. Two years ago, a Hamburg public prosecutor also brought a case against former executive board members that accused them of insider trading and market manipulation.
Gehrlicher Solar said that its decision to file was due in part to the termination of a $109.5 million loan from a banking consortium. They also stated that the EU’s policy of imposing anti-dumping tariffs for Chinese units causing a “a deterioration of market conditions in Europe” and sinking the business. Heads of Gehrlicher Solar warned that if politicians do not act quickly to resolve the political dispute with China, that further damage would befall the already floundering market.
The gradual implosion of the market has been predicted by many analysts as a result that many panels are cheaper to produce in China, and that gradually reducing the incentives of power set by the feed-in tariffs were poorly timed. While many customers asserted that they would be willing to pay more for domestic panels that are of higher quality than their Chinese counterparts, low tariffs could make them seem more costly when they do not produce enough electricity to cover the initial price tag.
Images via Gehrlicher Solar and Wikicommons user Fernando Tomas.
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