Powerful producer and supplier clusters have established themselves in East and Southern Germany. Despite the difficult market situation, these companies bring jobs to their regions, and their innovations enliven the global photovoltaics industry.
Low demand, massive oversupply of products and materials, price decline – the photovoltaics industry is experiencing hard times. In December, Solon, as the first renowned module producer, declared bankruptcy, Schott Solar from Mainz followed suit a month later and closed its wafer production in Jena. And now the crisis is touching even China’s solar industry, which had been booming until now. “Nearly all Chinese producers are reducing their lines,” says Stefan de Haan, analyst with the US market research company IHS iSuppli.
The global reduction of the cell and module plants in turn affects the machinery and plant manufacturers. Listed companies such as Manz, Centrotherm or Meyer Burger from Switzerland are reporting declining sales, incoming orders and order volumes. Within a few months’ time, the entire solar industry seems to be heading south.
But there is hope that the solar market will soon catch an updraught again. According to a current analysis by the International Energy Agency IEA, photovoltaics and solar-thermal power plants will advance to be the most important energy source by the year 2060, and will cover more than half of the worldwide power requirements. Germany will be a trailblazer in this global energy shift. According to plans of the German government, the domestic photovoltaics output will at least double from the current 25,000 MW to 50,000 to 70,000 MW.
New Plants for the Next Boom
At the same time, know-how and innovations from Germany are supposed to fuel the global solar expansion. For this reason, the German government will provide additional funding in the amount of € 100 million for photovoltaics research over the next five years. Thanks to the good cooperation between politics, research and industry, Carsten Körnig, General Manager of the solar industry association Bundesverband Solarindustrie (BSW), assumes that the solar location Germany will undergo further positive development. “With 130,000 jobs, the German solar industry overshadows quite a few of the traditional economic sectors. Provided the funding conditions stay favourable, this number could grow even more.”
But the photovoltaics industry engine is still running. Last year for example, Bavarian silicon producer Wacker Chemie invested nearly one billion Euros into the expansion of its silicon production at Nünchritz in East Germany and created 500 additional jobs. The same number of jobs was created in 2011 at First Solar, the US-based thin-film specialist, which invested € 170 million to double the capacity of its module production in the East German Frankfurt an der Oder to 500 MW.
The current silver lining also includes the Central German Solarvalley Mitteldeutschland, a cluster of research institutes, advanced companies and producers in Saxony-Anhalt, Saxony and Thuringia. Last year, the flagship of Solarvalley, Bosch Solar Energy, commissioned a centre of excellence in Arnstadt, Thuringia, which will combine research and development, cell and module production as well as a training centre under one roof. By the end of 2012, 1,000 new jobs shall be created there.
In Thalheim, Saxony-Anhalt, module producer Sovello is increasing its production capacity from 180 to 250 MW. The clou of the new lines are special ovens for the production of wafers with particularly low silicon involvement. Sovello purchased these ovens from the bankrupt US producer Evergreen Solar. “With an investment of approximately € 35 Million into the other systems, we protect the jobs over the next two years,” says Sovello Director Reiner Beutel.
Plant Manufacturers Continue to Innovate
The concentrated expertise in the cluster is a deciding factor for the establishment of further companies in Solarvalley. The location is interesting even for Asians, who – one would think – would find better conditions, i.e. lower labour costs and higher government grants, in China or Taiwan. At the moment, Leipzig-based company Solarion is building a factory for thin-film modules with an investment of approximately € 40 million close to Leipzig. The money for the production comes from the Taiwanese Group Walsin Lihwa, which purchased 49% of the Solarion shares at the end of 2010. “We are building our plant in Zwenkau because we need a highly professional environment of suppliers and research partners to scale-up our technology from the pilot stage to mass production,” states Stefan Nitzsche, Solarion Sales Director. The relocation of Solarion is a win-win situation: The thin-film specialist uses the synergies of the cluster and brings 90 new jobs to the region.
The Central German solar engine transfers its power to other German regions, for example, into the mechanical engineering region of Baden-Württemberg. Solarvalley producer Q-Cells commissioned its first production from solar engineering specialist Centrotherm and, through its orders, helped that company to get started in the solar business. Nowadays, Centrotherm exports to all corners of the world, mainly to Asia, where it is now generating more than 85% of its sales volume. However, the company must ready itself for a tough year 2012 with declining sales and profits, because manufacturers ordered less equipment in 2011. Nevertheless, Centrotherm – as most of the other renowned outfitters – is obviously financially stable enough to maintain its strong commitment to innovation and thus retain a promising market position. According to the German Machinery and Plant Manufacturers’ Association (VDMA), German solar system suppliers achieved additional sales of just below 10% in the third quarter of 2011 as compared to the corresponding quarter of the previous year. This is an excellent prerequisite for further investments.
In any case, Centrotherm’s technological objectives are ambitious. “We would like to realise a further price reduction of at least 18% per year with our cells and modules,” explains Technology Director Peter Fath. Plant manufacturer Grenzebach from Baden-Württemberg is also using the low demand period to implement innovations. The company used to specialise in automation solutions for thin-film production. In future, it plans to also offer equipment for the installation of solar reflector fields for solar-thermal power plants as well as the production of so-called concentrator modules. “CPV technology is a growing, future-oriented sector of the photovoltaics industry,” says Egbert Wenninger, Acting Sales Director with Grenzebach.
In concentrator modules, an integrated lens focuses light in high concentration onto a tiny, highly efficient solar cell. Concentrators are excellent for the use in countries with high levels of solarisation, as they can use direct light very efficiently. As a result, several energy providers in the south-west of the USA are already investigating this technology. At the moment, CPV modules are being produced manually in low numbers due to lack of equipment, Wenninger explains. Thanks to our automation techniques, this is our opportunity to position ourselves successfully on the CPV market. To gain insights into the new equipment offers by Grenzebach, Centrotherm et al, and which techniques they are planning to use to help producers lower costs, visit the producers at the International Trade fair for Solar Production Equipment, solarpeq, and at the parallel Leading International Trade Fair for the Glass Industry, glasstec, held in Düsseldorf from 23 October 2012 to 26 October 2012.
Fear of the Funding Lid
Despite the many bright spots and good examples for creative handling of the crisis, experts foresee major challenges for companies. In the mechanical engineering sector, competition is growing rapidly, since more and more outfitters from the USA and China are pushing onto the market. “Chinese mechanical engineering companies are now offering equipment for most process steps of solar cell production,” says Eric Maiser, Managing Director of VDMA Photovoltaics Production Goods. This means: Those who want to succeed as suppliers in this segment must show rapid innovation. This in turn requires investment and more scientific personnel. Particularly in regions such as Southern Germany, where many of the major plant manufacturers are located, top-level personnel could become scarce. Principally, all solar machine producers need the same experts: Chemists, physicists, etc. As these are not readily available on the labour market, outfitters will have to fight over expertise. This could put a damper on their competitiveness.
Quick innovation is also required when it comes to cells and modules. In the area of production, German companies are in a difficult situation, as well. Unlike the Chinese producers, they cannot access cheap government loans. They also cannot benefit from low labour costs. For these reasons, they are under much higher pressure to lower their costs. But an even more serious problem is looming ahead for German producers. According to the Federal Network Agency, a new extension record was achieved in Germany with a newly installed output of 7,500 MW. For this reason, solar promotion in Germany is currently being criticised as being too generous and expensive, and some politicians would like to see drastic reductions. If the Federal government were to actually cap the tariffs radically or instate extension limits, experts fear that this would be the death knell for the efforts of the companies and stall the industrial engine of photovoltaics.
No comments yet.