“We are looking at a consolidation of the global solar industry,” says Wolfgang Hummel, director of the Center for Solar Research in Berlin. “Having seen a whole range of US companies go under in the last few months, it is now Germany’s turn. And the biggest threat comes from China.”
The development seems paradoxical. In 2011, renewable energy became the second-most important source of German electricity generation after brown coal, overtaking nuclear energy, hard coal, and natural gas. More than 20 percent of the country’s electricity is now comes from wind, solar, and biomass energy, making it the world leader for green energy among the big industrial nations. Germany’s energy laws give suppliers of green energy a 20-year-guarantee on the price and the amount of energy sold. By 2009, more than half the world’s solar panels were mounted on German roofs, according to the European Photovoltaic Industry Association (EPIA).
But the German solar industry depends on foreign markets. The eurozone crisis and the loss of subsidies in important markets like Spain and Italy have led to a decline in demand, while competition from China has stiffened. Already four of the world’s leading seven solar manufacturers are based in China.
“The German solar market is an artificial construct that cannot function without state subsidies and feed-in tariffs,” says Mr. Hummel. “At the same time Chinese manufacturers are aggressively pushing their products into Western markets.”