Photovoltaic news and pv jobs

Solar Millennium is broke – bad news for the solar industry?

23. December 2011 By:  Karl-Heniz Remmers

Yes, the title of this blog post is meant in all sincerity. The insolvency of Solar Millennium, a firm of which many insiders have held a highly critical view, is after all not a harbinger for the industry, but rather a sign of its healthy and rapid development.

Of course, every bankruptcy initially has negative fallout and, of course, my sympathies go out to the many investors who have a stake in Solar Millennium. Naturally, I am also not so callous as to be oblivious to the loss of jobs and hopes. However, where poor management and reckless manoeuvring are present, we should state it clearly and view such behaviour separately from the many better companies in the industry.

And the industry has to make that distinction now, when people are crawling out of the woodwork predicting the collapse of the industry or implying that solar companies are gold-diggers or, in any case, perpetrators of investment fraud.

In just the past few weeks, indications have been mounting that many Germany companies are indeed facing down the increasingly keen competition and, in fact, have quite good chances of pulling through. They have made adjustments to efficiency, quality and costs, adjustments which are also reflected in price. In addition to the cell and module manufacturers, which have been far too prematurely condemned to death, numerous suppliers and system integrators are still doing relatively well.

We are seeing neither the solar eclipse, nor the collapse of the solar industry reported widely in the wake of Solar Millennium's demise, but rather a difficult adjustment phase for a market which has continued to grow in 2011. 

However, the market has jettisoned a number of myths and apparent certainties over the past year.

The massive price collapse in photovoltaic system costs threw the concentrated solar power (CSP) segment into an existential crisis. After all, PV systems are dramatically cheaper today than CSP and the advantage of the latter – thermal energy storage for power generation - may soon be lost as electrical storage systems also see rapid price drops. CSP can only catch up to PV with massive investment in development, if it can do so at all. Presently, the chances of that happening are slim, since photovoltaics are widespread and are getting cheaper by the day.

Furthermore, it is common knowledge that photovoltaic systems continue to hold tremendous potential. Thus, Solar Millennium's business model has been overcome by technological developments and, because there are so many PV developers around the globe, the CSP company can scarcely be expected to keep up. 

But it was not technological development that pushed Solar Millennium into receivership. Rather, if the many media reports about the company are to be believed, the fall owed itself to years of sometimes gross mismanagement crowned by the catastrophically expensive hire of illustrious former EnBW manager Utz Claassen. Then there was the perpetual over-the-top show and aggressive marketing to obtain constant new injections of capital for fantastic sounding projects, only a fraction of which ever materialised.

One can only hope that the investors’ money can be saved through completed projects and those still under development. The company itself will be hard-pressed to emerge from receivership in a better organised form, a possibility which would sit well with the firm’s employees.