
Germany's Solar Industry Is Imploding - velodrome
http://www.forbes.com/sites/williampentland/2013/07/08/germanys-solar-industry-is-imploding/
======
smackay
It would be more accurate to state that Germany's manufacturers of solar
panels are imploding due to the large volume of lower cost panels produced in
China which are flooding (allegedly being dumped in) the market.

There is a two-way battle between the installation and service companies that
use panels manufactured in the EU and other installation and service companies
which use Chinese panels and equipment. The former claims potential job losses
of 25,000 but the latter claim that over 70,000 jobs are also at risk in
Germany and many thousands more across the EU if tariffs are imposed.

The media appear to be presenting this as a clear-cut issue of dumping to
destroy European jobs but the reality is far from it. The BBC seems to be one
of the better sources for dis-entangling the various points of view,
[http://www.bbc.co.uk/news/business-22766639](http://www.bbc.co.uk/news/business-22766639),
but the coverage does appear to favour the anti-dumping suits.

~~~
justincormack
Indeed. Businesses involved in something that falls rapidly in price tend to
have these type of issues, and also tend to complain and get government
support a lot. Managing a business with fast falling prices is different from
one where they gradually rise.

In other news, Germany reached 23.9GW of peak solar power output a few days
back, around 40% of consumption [http://cleantechnica.com/2013/07/07/breaking-
germany-sets-so...](http://cleantechnica.com/2013/07/07/breaking-germany-sets-
solar-power-record-again-23-9-gw/)

~~~
seren
This is a case where, even if the businesses are failing, the mid to long term
outcome will benefit Germany anyway.

~~~
drchaos
How exactly do you think Germany (as a whole) could profit from this? With the
EEG (Energie-Einspeise-Gesetz), the German government created an artificial
solar bubble which is costing electricity customers several billions of Euros
each year, only to fill the pockets of (mostly Chinese) panel producers,
homeowners and companies who install that stuff, and last but not least the
banks (most installations are financed by credit).

The amount of electricity actually produced is almost neglible (a meager 3.1%
in 2011), whereas the consumer price has almost doubled since 2005, and is now
one of the highest in the world.

Even if you assume that this giant experiment in planned economy would somehow
lead to technological breakthroughs, making producing electricity via solar
economically feasible in the long term, Germany would still have to recover
the cost of 20+ years of subventions (which already amount to over 100 billion
€, and that's only a fraction of the total sum which has been guaranteed by
the EEG), while other countries with much better climatic conditions would be
able to reap the majority of the profits.

~~~
Shivetya
How about by forcing the government to admit it was a jobs program and not a
program to improve the environment. How about the government officials having
to acknowledge the burden their system puts upon their local manufacturers?

So was it a jobs program or environmental? Politicians love to sell programs
as one while really doing the other. Jobs programs tend to be vote buying
schemes for the most part.

~~~
toomuchtodo
How about we call it an energy security program and be done with it.

------
derda
I see it more as a failure of subsidies. Those companies were built for the
sole purpose of grabbing government money. Not only is the installation of
solar panels highly subsidized in Germany, these companies were often also
founded in economically poor regions in eastern Germany which would grant
further support. A few years ago there was a real alternative energy goldrush,
companies expanded quickly, IPOs happened etc. . The money was plenty and the
companies lived well of it. Then the Chinese catched up, and afaik there
was/is no real reason to not buy the Chinese product since the German
companies had no real advance in quality or technology (maybe they did not
innovate, since they thought they were in a comfortable position?). Now the
subsidies for installations would go to China. So basically the tax money
supposed to prop up German industries supports a Chinese price-dumping scheme.
And if that was not worse enough our energy prices are rising and rising (I
think I pay about 0,25€ / kWh) (about a third of it is going to alternative
energy subsidies). And don't get me started on the problems with keeping the
grid at 50Hz....

~~~
k__
Yes, they are grabbing government money, but this was the idea.

Most people won't lift their asses, if not getting paid for it.

I want Germany to be green, if it only gets this way with money, I'm glad to
spend it.

~~~
drchaos
> if it only gets this way with money, I'm glad to spend it.

I'd be perfectly okay with that if you only spent yours, not mine. Since when
has socialism and planned economy become acceptable on HN?

~~~
apalmer
Acceptable? What on earth are you talking about? Do you think because some
people use a news board they all of a sudden have to have the same world view?

Further the Germans who have had democracy have voted for (a kind of)
socialism and (a kind of) planned economy for the last 60 years, and they are
in the top 5 healthiest economies of the world (although not largest), and
their long term prospects with regards to manufacturing and exportation are
much better than the US.

Are you a german citizen?

~~~
pdeuchler
I don't think you're using "socialism"[1] or "planned economy"[2] correctly.
There's a large difference between a "mixed economy"[3] and
"planned"/"socialism".

[1]
[https://en.wikipedia.org/wiki/Socialism](https://en.wikipedia.org/wiki/Socialism)

[2]
[https://en.wikipedia.org/wiki/Planned_economy](https://en.wikipedia.org/wiki/Planned_economy)

[3]
[https://en.wikipedia.org/wiki/Mixed_economy](https://en.wikipedia.org/wiki/Mixed_economy)

------
kqr2
The article doesn't state why the solar industry is imploding.

It appears it may be due to reduced government subsidies as well as cheap
Chinese solar panels.

[http://europe.autonews.com/article/20130325/ANE/130329940#ax...](http://europe.autonews.com/article/20130325/ANE/130329940#axzz2YXEdFFnf)

------
tjansen
I wonder whether the Chinese manufacturer are really dumping them, or whether
the German companies only had high prices from the beginning. Companies like
Siemens and Bosch aren't exactly known for low prices or efficiency. Massive
government subsidies certainly did not help making them more efficient. It
rather seems like this made the companies focus on maximizing subsidies
instead of producing something of market value, simply because the subsidies
were more profitable. And now, with fewer subsidies and more market pressure,
their business model ceases to exist. Can you blame the Chinese companies for
that?

~~~
ndonnellan
"Companies like Siemens and Bosch aren't exactly known for low prices or
efficiency."

Which products, exactly, are you referring to? Siemens is a huge company that
spans transportation, energy, healthcare, etc. I know their sub-critical,
superheated steam turbines are pretty cost-effective. What's your experience
with Siemens?

~~~
muro
Mine is that they were convinced of bribing in several countries and whenever
they won a deal (they only went into government or municipality-financed
things), they were more expensive than competition. I wonder how they won
those.

~~~
talmand
Maybe some people go with the notion you get what you pay for? Not to say that
it's always the case that expensive means quality, but you shouldn't
necessarily always go with the lowest bid.

------
D9u
If Chinese products are being dumped, then the cheaper products become
available to more people, resulting in reduced consumption of fossil fuels,
which equals less pollution, which ends up being a net win for the planet...

~~~
pbhjpbhj
> _resulting in reduced consumption of fossil fuels, which equals less
> pollution_ //

This bit isn't necessarily the case. Certainly reduced fossil fuel usage and
pollution in Germany though.

~~~
D9u
Good point. I guess PV manufacturing isn't very _green._

~~~
diydsp
On Saturday night, a hippie at a campfire told me solar panels are using 10%
of the world's silver. I politely told him I was interested and I'd look it
up...

It turned out to be true! It's easily verifiable, but just to start you off,
here's one link. [1]

It isn't actually un-green to use lots of silver IMO, b/c solar cells will be
around for a long time, but I think more people need to realize this fact b/c
it means that certain solar dreams may not be financially possible.

For example, I once believed in covering the square meterage necessary to
produce all electricity needs in the U.S. (and everywhere else for that
matter) with PV panels. I couldn't understand why everyone was taking their
sweet time. I figured it was a matter of waiting for the tech to stabilize...
but now I realize we're _limited by the cost of silver_! (which has recently
had a huge burst [2] )

p.s. Multiple companies are working on ways to reduce the silver in PV panels,
including nanosilver and replacing it with copper, but the real issue is
efficiency.

[1] [http://www.caseyresearch.com/cdd/look-out-silver-here-
comes-...](http://www.caseyresearch.com/cdd/look-out-silver-here-comes-solar-
demand)

[2] [http://silverprice.org/silver-price-
history.html](http://silverprice.org/silver-price-history.html) (see 5 and 10
year prices)

~~~
tjansen
_b /c solar cells will be around for a long time_

Are you sure about that? It's something I always wondered. The efficiency of
today's solar panels is 15%-20%. According to a short google search,
researchers have already shown panels with 44%. It seems certain that over
time the efficiency of commercial panels is going up and prices are going
down. If you have only limited space (e.g. your roof), doesn't it make
economic sense to replace your old panels with more efficient and possibly
also cheaper panels at some point?

~~~
DanBC
The old panels could go through some scheme to the roofs of poor people.

------
wozniacki
Siemens to Shutter Solar Unit Following $1B Loss

Bloomberg News' Alex Webb reports that Siemens AG is getting out of the solar
power industry, announcing plans to close its solar power unit after
struggling to find a buyer following losses of at least $1 billion since 2011.

Source:

[http://www.bloomberg.com/video/siemens-to-shutter-solar-
unit...](http://www.bloomberg.com/video/siemens-to-shutter-solar-unit-
following-1b-loss-OS3v~72qSg2MROgU09oqNA.html)

------
kokey
I think pointing the finger at cheap panels from China is only half of the
issue. The real issue is that even the cheaper PVs from China aren't cheap
enough to make it viable.

~~~
scep12
Why not?

~~~
talmand
Everything I've read about solar panels is that they aren't nearly efficient
enough just yet to offset the long term costs. Although there is hope that
they are getting better.

But the biggest factor is that for a large number of people they will likely
never be viable simply because they do not receive enough sunlight on a daily
basis. The solutions for them is either importing the energy from the closest
region that has ample sunlight or put the panels above the weather.

------
dschiptsov
Chinese just doing it cheaper.)

~~~
simonh
The trouble is they're not actually doing it cheaper. They're doing it
expensively, but using Chinese government subsidies to over-expand production.

The problem is that Chinese companies like Suntech (1) get massive government
grants to expand production, but when their massive overproduction swamps the
market and prices crash, they still ended up losing money and had to default
on their bonds. It's a debacle at both ends, Germany and China.

(1)
[http://articles.washingtonpost.com/2013-05-03/business/38997...](http://articles.washingtonpost.com/2013-05-03/business/38997721_1_china-
development-bank-green-tech-solar)

~~~
dschiptsov
This is one theoretical explanation. Another one, quite plausible, is that
Chinese companies spent less on salaries, especially of management and company
image, given very different "standards of life" between China and Germany, and
just producing the damn things.)

~~~
maxerickson
The WaPo article does not present the defaulting on the debt and bankruptcy as
a theory. Are you suggesting that lower salaries somehow led to default and
bankruptcy?

Conveniently, the article also states that Suntech is the largest global
seller of PV modules, undermining arguments that it is some sort of special
case (if it's the largest on the planet, it must be the largest in China...).

~~~
dschiptsov
Default is, probably, just part of a money stealing scheme, nothing special,
it is same everywhere - get loads of government money and then bust - US,
especially Russia, China - all the same.

The difference in so called "standard of living", however, is very simple
thing. For example, uneducated people who making roads in Sweden receiving
around 3k euro salary, while exactly the same job in, say, China is just to
get food and rent. Similarly, German working class enjoys very high wages,
which makes any "fair" competition with Asian cheap labor impossible. Then big
companies employs tricks, such as assigning taxes for Chinese solar panels in
EU, just to protect inflated wages of its working class. Actually all this is
the very basics of micro-economy, so nothing to discuss here.

------
kfk
And that, fellows, is the final demonstration of how much damage can do a
State that invests money in private industry.

~~~
cloudwalking
Sorry, not buying it. The problem here for Germany is the Chinese
manufacturing prowess, not their own government.

~~~
digitalengineer
Dutchman here (Germany's neighbor). 'Green' forces in my country set new rules
so the government actually pays a part of the costs if you buy and install
solar panels on your roof. The very same government who puts up an import-fine
for those very same panels thus making them more expensive. Now that a lot of
people have bought and installed solar panels and have become net suppliers of
power (giving it back to the grid) they're working on new rules to
administrate those net-suppliers. They now run the risk of having to document
everything like regular power-providing companies do. (Lots of red tape).
Thanks government...

~~~
toyg
Administering a power grid is no amateur job. I don't see why the government
wouldn't want to put safeguards in place, in order to guarantee that lights
will stay on. Obviously there's a balance to be found, but you can't just give
everyone full access to the grid and expect things never to break.

~~~
digitalengineer
Everybody has a meter in their house, only with these solar panels it will run
backwards. At the end of the year everybody receives a bill of what they
used... There is no need for extra red tape.

~~~
steve19
That system us actually a (usually) government mandated subsidy.

Think about it: when you pay for power you pay not just for generation but for
distribution as well. When you feed it back and your meter runs backwards the
power company should be paying you only for generation (at a wholesale rate,
so they can turn a profit).

In some countries they measure your power in both directions and give you a
credit based how much you put back into the grid. This would be much lower
than what you pay to buy power.

~~~
digitalengineer
> In some countries they measure your power in both directions and give you a
> credit based how much you put back into the grid That would be perfect. No
> need for extra administration and extra taxation.

