Number crunch in German solar sector

The German federal government has denied the uncertainty caused by the ongoing EEG (German energy law) talks is causing chaos in the country’s solar industry after an inquiry by the opposition Die Linke party.

The number of people employed in the sector has fallen to 87,000 and total sales have declined to an estimated €7.34 billion (US$9.5 billion).

There were more than 110,000 employees in 2011 and a turnover of €11.9 billion. The federal government says it has no data for individual companies but will undertake studies to examine the employment effects in renewable energy.

The federal government said: "The decline in the turnover of the industry has to do largely with the strong global price decline for solar installations. The annual installed capacity has remained constant from 2010 to 2012. The market has not decreased in this period."

The government does not see the ongoing reforms and discussion on the EEG and solar subsidies as a reason for the crisis. "The EEG reforms are not to blame, the enormous global overcapacity in solar modules is," was the response.

The federal government is looking for further reform and accuses German PV companies of "emphasizing too little on innovation". The government remains convinced the fundamentals of the EEG need reform. Competitiveness needs to be strengthened to drive research and development, according to the government.

Drive renewed growth with German R&D

The government advises German PV companies to maintain market position with innovation and research-related investments. "Through close co-operation between PV manufacturers, suppliers and research institutes the technology and the entire value chain can be covered. No other place has this offering," the government added.

Funds for the Photovoltaics Innovation Alliance have also been increased by an additional €50 million. Regarding short-term financial assistance, the federal government stated it is up to individual companies to apply for funding. The business concept is examined in each case and the company will be funded if there is a case for economic viability.

The call for a solar summit for eastern Germany was dismissed. The federal government believes, since overcapacity is the problem, an east German summit is unnecessary. Appropriate reforms will be discussed on the existing renewable energy platform with the solar sector involved.

There are no concrete aid programs for a solar industry which is suffering acutely in the east of the country. The government said fears of a further downward spiral in the industry, revenue declines and job losses as "pure speculation."

Translated and edited by Shamsiah Ali-Oettinger