A decade following a series of bankruptcies that nearly decimated the German solar industry, the sector is poised for a resurgence in the face of formidable international competition.
The golden era of German solar manufacturing was dimmed by excessive production in China and extensive government subsidy programs in the United States. The result was a struggle to maintain profitability for an industry that once thrived in Germany.
In a glimmer of hope, the opening of a solar cell plant in Bitterfeld-Wolfen in 2021, operated by the Swiss group Meyer Burger on the premises of the defunct German producer Q-Cells, signals a potential renaissance.
Jochen Fritsche, the director of the Meyer Burger factory, stated, “We managed to recruit a number of former employees in the sector, and we are benefiting from their know-how.” At the facility in eastern Germany, approximately one million blue solar cells are manufactured each day, ready to be assembled into the modules that comprise solar panels. The production process is highly automated, with just around 50 employees overseeing the continuous manufacturing process through computer screens.
The intricate industrial process, closely guarded by Meyer Burger, yields solar cells claimed to produce 20 percent more energy than their competitors. “Technology is the core of our business and it’s what is allowing us to rebuild production in Europe,” said Gunter Erfurt, CEO of Meyer Burger.
This factory is situated in what was once celebrated as “Solar Valley,” an area in former communist East Germany that boasted a high concentration of solar energy businesses in the 2000s. German manufacturers enjoyed global leadership in solar at that time, thanks to substantial government subsidies. However, these subsidies were significantly reduced in 2010, leading to the downfall of many companies.
Solar Valley witnessed the loss of thousands of jobs as Chinese competitors ascended to the top position in the industry. Today, Chinese companies dominate approximately 80 percent of photovoltaic production worldwide, while Germany seeks to decrease its dependence on the Asian giant and expand its renewable energy capacity.
Berlin’s objective to generate 80 percent of its electricity from renewables by 2030 has been buoyed by the revival of its domestic solar industry. In the period from January to September 2022, solar panel module production in Germany was 44 percent higher than the previous year.
Nevertheless, the challenges facing the German solar industry remain substantial, including intense global competition and the race for subsidies. President Joe Biden’s Inflation Reduction Act in the United States has allocated substantial funds to bolster solar and other technologies. The European Union has responded with its own plan to support green industries, though it awaits final approval from member states and the European Parliament.
CEO Erfurt commented, “We are under the impression that Europe is always behind… in the United States, everything is faster.” Earlier this year, Meyer Burger expanded production in the United States and sought a 200,000-euro ($211,779) subsidy to increase capacity in Germany.
European manufacturing costs remain higher than in other regions, and overcapacity in China is driving down prices for solar modules, posing challenges for European companies.
Notably, the risks are evident as Nordic group Norwegian Crystals filed for bankruptcy in August, underscoring the hurdles the European solar sector faces in its quest for revival.
