German solar company SolarWorld will in the fourth quarter lay off around 500 temporary workers from its German production sites as the firm reduces its manufacturing volumes in the face of a second half (H2) market slowdown.
"We are again witnessing massive dumping on the solar market," SolarWorld Spokesman Milan Nitzschke said. "After China had its solar subsidies for the second half of the year cut, large quantities of Chinese module overproduction at prices far below production costs are pushing into the market."
From October 1 SolarWorld will begin the staff cull, shedding 300 temporary positions at the firms site in Freiburg, followed by 200 more lay-offs on December 1 at its Arnstadt site. Permanent employees will not be affected by the cuts, the company confirmed. "We regret the actions and are confident of reviving solar production and increasing the number of employees again," added Nitzschke.
According to analysts at Roth Capital, the next 1.5 years will be tough for PV manufacturers as fierce price pressures hit, threatening a slowdown in production caused by impending oversupply of modules on the market. Roth calculate that by the end of 2017 the global solar market will see an imbalance of around 20 GW between supply and demand, while average selling prices (ASP) will fall by 20 to 30% between now and the end of next year.
Similar levels of overcapacity are expected by Bloomberg New Energy Finance (BNEF), causing another market consolidation in the global solar industry that will be exacerbated by Chinese solar firms unabated expansion plans.
Luc Grare, senior vice president sales and marketing at REC Solar, recently told pv magazine in an interview that there the industry has entered into a new PV price war. "We are forced to take up the fight and defend ourselves," Grare said. "Otherwise we would have to close down our factories. Naturally, we will examine where we can best sell our modules at competitive prices."
Article edited and translated by Ian Clover.