German Solar Sector Dims

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) - Europe's leading solar power nation, Germany, will shine less brightly this year as major companies announce massive job cuts and departures.

The country's biggest solar company SMA Solar Technology AG (ETR:S92) (Niestetal, Germany), has announced plans to slash a third of its workforce - around 1,600 people - as demand in Europe falls. Around 1,300 of those cuts will be in Germany. The company blamed a decline in sales and is anticipating a "difficult fiscal year 2015".

At the same time, one of the largest solar photovoltaic (PV) manufacturers in the world, Hanwha Q CELLS (Thalheim, Germany), has announced that it is pulling all of its manufacturing capacity out of Germany with the planned loss of 550 jobs. Hanwha cited global price pressure in the solar PV market.

"We expect to see high price pressure on the global photovoltaic market still in the coming years and a further decline in demand in Europe, particularly in Germany," explained SMA Chief Executive Officer, Pierre-Pascal Urbon, announcing the cuts. " By contrast, the non-European markets will develop positively. This means, that although the market measured in gigawatts will continue to grow in the medium term, we expect to see a global decline when measured in euros. In this context, global staff reductions are unfortunately unavoidable. This is the only way that we can break even with reduced sales."

Hanwha Q CELLS' German site in Thalheim, will cease production on March 1, with production transferring to "more cost competitive sites", such as the company´s main production site in Cyberjaya, Malaysia. Today, the German plant has production capacities of 230-megawatts (MW) for cells and 130 MW for modules.

Kasey Son, CFO at Hanwha Q CELLS, said: "Against the background of the keen cost competition in global solar industry, the management of Hanwha Q CELLS has decided to transfer the German cell and module production facilities to more cost competitive sites. This hasn´t been an easy decision considering the impact on our employees in Germany, but it is necessary in order to ensure the overall competitiveness of Hanwha Q CELLS. I´d like to emphasise, that this decision has been made independently from the recently announced merger of Hanwha Q CELLS with Hanwha SolarOne."

The company said that since the take-over of Q CELLS by Hanwha in October 2012 sales prices as well as feed-in-tariffs in international PV markets have continued to decline.

The European solar sector has been over-run by Asian solar PV companies in recent years, resulting in plummeting panel prices. The sector is worried for its future and at a recent solar PV gathering in France, a stark warning to Europe's solar sector was issued by Vincent Bes, general director of Photowatt.

"We won the first battle, which was to create a solar industry," Bes said, referring to the development of solar technology. "We lost the second battle and China won everything -- not because they were smarter than us, just because they were richer than us and will continue to be. In the next battle, if we want to survive, why don't we merge all the research centres in Europe? There are billions spent on solar R&D every year, but if there is no industry, what is the point? There is no point. Specialise each lab in one specific area -- one lab in Switzerland could do the ingot, another one the wafer, another the cells."

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