Germany was previously the world’s top producer of PV products. However, China overtook Germany in 2015 thanks to policy incentives offered by its government and the cost advantage of its domestic solar enterprises. Currently, Chinese companies represent seven of the world’s top 10 manufacturers of PV modules. Nevertheless, the German solar industry does not appear to have lost its resolve despite losing the upper hand in the competition. With recent trends such as the increasing automation of production lines and the growth of local demand, can the German solar industry, and by extension the entire European solar sector, recapture business opportunities lost to other countries?
Swiss firm Meyer Burger, which is one of the world’s major providers of manufacturing equipment for PV products, announced in early July that it has chosen locations in Germany to set up production lines for PV cells and modules. Germany has a solar industry cluster located in Bitterfeld-Wolfen, a municipality in the eastern state of Saxony-Anhalt. The economy of this area was originally dominated by the chemical and other heavy industries, but it then started to focus on the manufacturing of PV products (particularly PV cells) in the late 1990s. Many jobs were created through this specialization, and Bitterfeld-Wolfen was nicknamed the “Solar Valley” of Germany.
Germany has long been proactive in the development of renewable energies, so the country’s domestic solar enterprises did prosper for a while. However, Chinese competitors soon emerged and managed to form a massive and highly integrated supply chain. With strong advantages in terms of scale and cost, the Chinese solar industry expanded worldwide and took market share away from the German counterpart. As a result, many German solar enterprises exited the market between 2012 and 2017. There were plant closures, mass layoffs, and bankruptcy declarations during the period. The Solar Valley, which enjoyed a short-lived boom, has now fallen on hard times.
However, the latest reports from various media outlets indicate that efforts are underway to restore the German solar industry to its former glory. Meyer Burger has just revealed that it bought a logistics and distribution center in Freiburg from SolarWorld, which has gone into insolvency. With an area of 1,400 square meters, the center will be an important part of Meyer Burger’s strategy to transform itself into an integrated PV manufacturer. The Swiss firm is adapting to the rapidly changing market environment through acquisitions of assets and businesses that can assist in its evolution. In the near future, Meyer Burger will enter the PV module market with solutions for rooftops as its initial offerings.
A large plant formerly belonged to SolarWorld was also bought by Meyer Burger to make PV modules. Located south of Berlin, this plant now has an annual production capacity of 600MW. Meyer Burger intends to later expand its production capacity to 800MW. As for the above-mentioned distribution center, the space there will accommodate additional production lines.
At the same time, Meyer Burger is renting a plant from Sovello, which is a defunct manufacturer of PV cells. Meyer Burger plans to commence the production of high-efficiency cells based on the heterojunction technology, and Sovello’s plant will provide an annual production capacity of 400MW for this type of product. Ultimately, Meyer Burger wants to establish a 5GW PV manufacturing hub in Germany.
According to its press statement on the subject, Meyer Burger can still make a profit in the module market even with an annual output of 400MW. Furthermore, the reactivation and expansion of the manufacturing plants in Germany is expected to create at least 3,500 jobs over the long term. As of now, customers in Europe and the US have signed letters of intent to purchase around 2GW of modules from the company.
Gunter Erfurt, CEO of Meyer Burger, is hoping that the new strategy adopted by his company will lead to a strong comeback for the European solar sector and generate many new jobs. Erfurt has also pointed out that relying on the facilities and professional expertise that already exist in Germany will shorten the ramp-up time and maintain a very high level of product quality.
(News source: TechNews. Photo credit: Pixabay.)