Asian competitors shadow German solar industry

Germany’s solar power industry, until recently the world leader in the technology, is facing an unprecedented crisis, analysts say, outshone by cheaper competitors from Asia, most notably Chinese firms.

The crisis in the German solar industry is affecting small companies as well as giants such as Q-Cells. Only three months ago, start-up Sunline declared bankruptcy with the loss of all its 78 employees.
“The fact is that Germany is losing more and more of its market leading position in renewable energy production to the United States and China,” said Matthias Fawer from Swiss bank Sarasin, quoted in German weekly Die Zeit.

“Asian cell and module producers are going to squeeze out the Germans,” Anne Kreutzmann, the chief editor of solar trade newspaper Photon, told the Financial Times Deutschland.

The main reason is simple: Chinese solar power companies are able to produce cells much more cheaply, due to lower labour costs and also the plummeting price for silicon, the raw material for solar cell manufacture.

Whereas German firms are tied in to long-term contracts for silicon deliveries, Chinese firms have been sourcing it from the spot market, where the price has dropped by around 70 percent in the past few months.

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