German Solar Module Production Problems

Module production and investment in module production are declining rapidly in Germany and Europe.  The Swiss manufacturer Meyer Burger has already announced that it will close its German module production factory in April and focus more on its production in the U.S.

The German company Solarwatt could be the next company to throw in the towel if something is not done to remedy the situation within the next few months. This is a company that has invested tens of millions into research, development, and production and it is still struggling in the current solar module production market. The company stated that “Quick and unbureaucratic responses from European and German politicians to the unequal conditions in competition with Chinese and US manufacturers have unfortunately failed to materialise.”

Solarwatt CEO, Detlef Neuhaus was recently quoted as saying, “The competition from Asia was always 20 to 40 percent below German prices. We have always found an answer to this. But these suppliers are now selling another 20 percent below their production costs. There will come a time when we will no longer be able to offer that, and these are unfair competitive conditions. Furthermore, demand is declining due to the extreme uncertainty among builders because of the interest rate situation.  Politicians need to act quickly to find a solution.” Neuhaus also added, “We are not crying out for subsidies because we are not competitive, but we are calling on politicians to create fair framework conditions.”

Chinese imported solar panels are often cheaper due to a combination of factors. China has heavily invested in solar panel production, leading to economies of scale and lower production costs. China’s manufacturing infrastructure and supply chain efficiencies contribute to lower prices. As well as differences in labour costs, government subsidies, and trade policies that play an important role in the pricing of their solar panels.

Solarwatt is currently working on various investment scenarios and with political help there is a chance that they could continue. If nothing happens Solarwatt will slowly discontinue its German solar module production.