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Germany's Solar Industry Is Imploding
- wozniacki 13y agoSiemens to Shutter Solar Unit Following $1B Loss Bloomberg News' Alex Webb reports that Siemens AG is getting out of the solar power industry, announcing plans to close its solar power unit after struggling to find a buyer following losses of at least $1 billion since 2011. Source: http://www.bloomberg.com/video/siemens-to-shutter-solar-unit-following-1b-loss-OS3v~72qSg2MROgU09oqNA.html http://www.bloomberg.com/video/siemens-to-shutter-solar-unit...
- tjansen 13y agoI wonder whether the Chinese manufacturer are really dumping them, or whether the German companies only had high prices from the beginning. Companies like Siemens and Bosch aren't exactly known for low prices or efficiency. Massive government subsidies certainly did not help making them more efficient. It rather seems like this made the companies focus on maximizing subsidies instead of producing something of market value, simply because the subsidies were more profitable. And now, with fewer subsidies and more market pressure, their business model ceases to exist. Can you blame the Chinese companies for that?
- ndonnellan 13y ago"Companies like Siemens and Bosch aren't exactly known for low prices or efficiency." Which products, exactly, are you referring to? Siemens is a huge company that spans transportation, energy, healthcare, etc. I know their sub-critical, superheated steam turbines are pretty cost-effective. What's your experience with Siemens?
- muro 13y agoMine is that they were convinced of bribing in several countries and whenever they won a deal (they only went into government or municipality-financed things), they were more expensive than competition. I wonder how they won those.
- talmand 13y agoMaybe some people go with the notion you get what you pay for? Not to say that it's always the case that expensive means quality, but you shouldn't necessarily always go with the lowest bid.
- zubiaur 13y agoI will give you mine: at least the industry sector in my region is plagged by inefficient factories, subpar products at premium prices and a severe lack of innovation. Siemens is extremely beurocratic, in part thanks to regulations imposed because of corruption cases. At least in the Industry sector, innovation seems to come due to aquisitions rather than true R&D. Regarding turbines, I've only heard excellent things about the ones manufactured in the US, stay away from the brazilian ones though.
- kfk 13y agoAnd that, fellows, is the final demonstration of how much damage can do a State that invests money in private industry.
- cloudwalking 13y agoSorry, not buying it. The problem here for Germany is the Chinese manufacturing prowess, not their own government.
- digitalengineer 13y agoDutchman here (Germany's neighbor). 'Green' forces in my country set new rules so the government actually pays a part of the costs if you buy and install solar panels on your roof. The very same government who puts up an import-fine for those very same panels thus making them more expensive. Now that a lot of people have bought and installed solar panels and have become net suppliers of power (giving it back to the grid) they're working on new rules to administrate those net-suppliers. They now run the risk of having to document everything like regular power-providing companies do. (Lots of red tape). Thanks government...
- toyg 13y agoAdministering a power grid is no amateur job. I don't see why the government wouldn't want to put safeguards in place, in order to guarantee that lights will stay on. Obviously there's a balance to be found, but you can't just give everyone full access to the grid and expect things never to break.
- digitalengineer 13y agoEverybody has a meter in their house, only with these solar panels it will run backwards. At the end of the year everybody receives a bill of what they used... There is no need for extra red tape.
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- smackay 13y agoIt would be more accurate to state that Germany's manufacturers of solar panels are imploding due to the large volume of lower cost panels produced in China which are flooding (allegedly being dumped in) the market. There is a two-way battle between the installation and service companies that use panels manufactured in the EU and other installation and service companies which use Chinese panels and equipment. The former claims potential job losses of 25,000 but the latter claim that over 70,000 jobs are also at risk in Germany and many thousands more across the EU if tariffs are imposed. The media appear to be presenting this as a clear-cut issue of dumping to destroy European jobs but the reality is far from it. The BBC seems to be one of the better sources for dis-entangling the various points of view, http://www.bbc.co.uk/news/business-22766639 http://www.bbc.co.uk/news/business-22766639, but the coverage does appear to favour the anti-dumping suits.
- mtgx 13y agoI think I heard the government was also cutting their subsidies? Is that true? I don't think most subsidies are good, but sometimes they could be needed if you want the future to look a certain way, and I don't think it's right to cut the subsidies of the solar industry after just a few short years, when the oil industry has been getting subsidies for almost a century, and keeps getting them (this goes for most countries).
- brazzy 13y agoThe problem is that the German subsidies to solar power are extremely high, have the form of price guarantees (i.e. their total amount is unlimited!) and are paid for by private consumers via their electricity bill - and have reached already reached the level where they're a noticeable drain on the funds of poorer households.
- justincormack 13y agoIndeed. Businesses involved in something that falls rapidly in price tend to have these type of issues, and also tend to complain and get government support a lot. Managing a business with fast falling prices is different from one where they gradually rise. In other news, Germany reached 23.9GW of peak solar power output a few days back, around 40% of consumption http://cleantechnica.com/2013/07/07/breaking-germany-sets-solar-power-record-again-23-9-gw/ http://cleantechnica.com/2013/07/07/breaking-germany-sets-so...
- kqr2 13y agoThe article doesn't state why the solar industry is imploding. It appears it may be due to reduced government subsidies as well as cheap Chinese solar panels. http://europe.autonews.com/article/20130325/ANE/130329940#axzz2YXEdFFnf http://europe.autonews.com/article/20130325/ANE/130329940#ax...
- dschiptsov 13y agoChinese just doing it cheaper.)
- simonh 13y agoThe trouble is they're not actually doing it cheaper. They're doing it expensively, but using Chinese government subsidies to over-expand production. The problem is that Chinese companies like Suntech (1) get massive government grants to expand production, but when their massive overproduction swamps the market and prices crash, they still ended up losing money and had to default on their bonds. It's a debacle at both ends, Germany and China. (1) http://articles.washingtonpost.com/2013-05-03/business/38997721_1_china-development-bank-green-tech-solar http://articles.washingtonpost.com/2013-05-03/business/38997...
- dschiptsov 13y agoThis is one theoretical explanation. Another one, quite plausible, is that Chinese companies spent less on salaries, especially of management and company image, given very different "standards of life" between China and Germany, and just producing the damn things.)
- maxerickson 13y agoThe WaPo article does not present the defaulting on the debt and bankruptcy as a theory. Are you suggesting that lower salaries somehow led to default and bankruptcy? Conveniently, the article also states that Suntech is the largest global seller of PV modules, undermining arguments that it is some sort of special case (if it's the largest on the planet, it must be the largest in China...).
- dschiptsov 13y agoDefault is, probably, just part of a money stealing scheme, nothing special, it is same everywhere - get loads of government money and then bust - US, especially Russia, China - all the same. The difference in so called "standard of living", however, is very simple thing. For example, uneducated people who making roads in Sweden receiving around 3k euro salary, while exactly the same job in, say, China is just to get food and rent. Similarly, German working class enjoys very high wages, which makes any "fair" competition with Asian cheap labor impossible. Then big companies employs tricks, such as assigning taxes for Chinese solar panels in EU, just to protect inflated wages of its working class. Actually all this is the very basics of micro-economy, so nothing to discuss here.
- D9u 13y agoIf Chinese products are being dumped, then the cheaper products become available to more people, resulting in reduced consumption of fossil fuels, which equals less pollution, which ends up being a net win for the planet...
- pbhjpbhj 13y ago>resulting in reduced consumption of fossil fuels, which equals less pollution // This bit isn't necessarily the case. Certainly reduced fossil fuel usage and pollution in Germany though.
- D9u 13y agoGood point. I guess PV manufacturing isn't very green.
- diydsp 13y agoOn Saturday night, a hippie at a campfire told me solar panels are using 10% of the world's silver. I politely told him I was interested and I'd look it up... It turned out to be true! It's easily verifiable, but just to start you off, here's one link. [1] It isn't actually un-green to use lots of silver IMO, b/c solar cells will be around for a long time, but I think more people need to realize this fact b/c it means that certain solar dreams may not be financially possible. For example, I once believed in covering the square meterage necessary to produce all electricity needs in the U.S. (and everywhere else for that matter) with PV panels. I couldn't understand why everyone was taking their sweet time. I figured it was a matter of waiting for the tech to stabilize... but now I realize we're limited by the cost of silver! (which has recently had a huge burst [2] ) p.s. Multiple companies are working on ways to reduce the silver in PV panels, including nanosilver and replacing it with copper, but the real issue is efficiency. [1] http://www.caseyresearch.com/cdd/look-out-silver-here-comes-solar-demand http://www.caseyresearch.com/cdd/look-out-silver-here-comes-... [2] http://silverprice.org/silver-price-history.html http://silverprice.org/silver-price-history.html (see 5 and 10 year prices)
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- derda 13y agoI see it more as a failure of subsidies. Those companies were built for the sole purpose of grabbing government money. Not only is the installation of solar panels highly subsidized in Germany, these companies were often also founded in economically poor regions in eastern Germany which would grant further support. A few years ago there was a real alternative energy goldrush, companies expanded quickly, IPOs happened etc. . The money was plenty and the companies lived well of it. Then the Chinese catched up, and afaik there was/is no real reason to not buy the Chinese product since the German companies had no real advance in quality or technology (maybe they did not innovate, since they thought they were in a comfortable position?). Now the subsidies for installations would go to China. So basically the tax money supposed to prop up German industries supports a Chinese price-dumping scheme. And if that was not worse enough our energy prices are rising and rising (I think I pay about 0,25€ / kWh) (about a third of it is going to alternative energy subsidies). And don't get me started on the problems with keeping the grid at 50Hz....
- LaGrange 13y agoReversal of German subsidies and subsidies on Chinese side (that's what you mean by price dumping, right?) causing the German side to implode => failure of subsidies. Right. Also, I would replace "the sole purpose of grabbing government money" with "wouldn't happen if not for the subsidies". But then the spin would be different, eh?
- iuguy 13y agoWe have a similar thing going on here in the UK with the feed in tariff. Companies have been trying to sell solar to people in a country that gets an average of 1340 hours of sunshine a year (which is obviously far less up north than it is down south).
- k__ 13y agoYes, they are grabbing government money, but this was the idea. Most people won't lift their asses, if not getting paid for it. I want Germany to be green, if it only gets this way with money, I'm glad to spend it.
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- kokey 13y agoI think pointing the finger at cheap panels from China is only half of the issue. The real issue is that even the cheaper PVs from China aren't cheap enough to make it viable.
- scep12 13y agoWhy not?
- talmand 13y agoEverything I've read about solar panels is that they aren't nearly efficient enough just yet to offset the long term costs. Although there is hope that they are getting better. But the biggest factor is that for a large number of people they will likely never be viable simply because they do not receive enough sunlight on a daily basis. The solutions for them is either importing the energy from the closest region that has ample sunlight or put the panels above the weather.