German Solar Sector Seeks Revival Following Near Extinction

In the face of tough competition from foreign markets, the German solar industry is seeking to make a comeback, a decade after it was nearly decimated by a series of bankruptcies.

Overproduction in China and massive government subsidy programs in the US mean it’s a struggle to stay profitable for a company that once thrived in Germany.

The Bitterfeld-Wolfen Kissa solar cell factory opened in 2021 by the Swiss Meyer Burger on the site of the defunct German producer Q-Cells is a sign of a possible renaissance.

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“We managed to recruit several former workers in the industry, and we benefit from their know-how,” Meyer Burger plant manager Jochen Fritsche told AFP.

At the factory in the eastern German city, a million blue cells roll off the line every day, ready to be assembled into modules consisting of solar panels.

Production at the factory is largely automated, and only about 50 employees monitor the production process uninterruptedly through computer screens.

First, the silicon wafers that form the basis of the cells are dipped in a chemical solution. They are then given a reflective gray coating, dried and cut in half.

The result of this highly precise industrial process – the details of which are closely guarded by Meyer Burger – is a cell that is said to produce 20 percent more energy than the competition.

– “Solar Valley” –

“Technology is the core of our business and it allows us to rebuild production in Europe,” Meyer Burger CEO Gunter Erfurt told AFP.

The group’s factory is located at the heart of what was once the “Solar Valley”, an area in the middle of former communist East Germany that hosted a large number of solar energy companies during its boom in the 2000s.

At the time, German manufacturers were the leaders in solar energy worldwide with healthy government subsidies. But public funding was cut in 2010, leading to the bankruptcy of many companies.

Thousands of jobs were cut from Solar Valley, while Chinese competitors rose to the top of the industry.

Today, Chinese companies account for an estimated 80 percent of global solar production, just as Germany seeks to reduce its dependence on the Asian giant and expand renewable energy capacity.

Berlin’s goal of producing 80 percent of its electricity with renewable energy sources by 2030 has been boosted by the recovery of domestic industry.

In January-September 2022, the production of solar panel modules in Germany was 44 percent higher than the previous year.

– “Always behind” –

Despite the recent upswing, the industry’s challenges in Germany are still significant – not the least of which is fierce international support competition.

In the United States, President Joe Biden’s anti-inflation law has invested billions of dollars in increasing the production of solar energy and other technologies.

In March of this year, the European Union responded with its own plan to facilitate the financial support of green industry, but the project still awaits final approval from the member states and the European Parliament.

“We’ve been under the impression that Europe is always lagging behind…everything is faster in the US,” said CEO Erfurt.

Earlier this year, Meyer Burger decided to expand production in the United States, while also asking for a 200,000-euro ($211,779) grant to increase capacity in Germany.

Manufacturing costs are higher in Europe than elsewhere. “Europe is not competitive enough in sectors that consume a lot of energy but are not particularly developed,” said Georg Zachmann of the Bruegel think tank.

In addition, overcapacity in China is pushing solar module prices down and making it harder for European companies to make ends meet.

The challenge has already been too much for some. The Nordic group Norwegian Crystals filed for bankruptcy in August, which highlights the risks of the European sector growing again.

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