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ENERGY

German solar-panel manufacturers face financial ruin

The German solar industry, once at the forefront in its field, has been hit hard by the bad economy and increasing competition from Asia, the Financial Times Deutschland reported Monday.

German solar-panel manufacturers face financial ruin
Photo: DPA

After seeing great success in recent years, the young industry is facing financial ruin after the first six months of this year. And solar experts told the paper this is just a sign of the beginning of what is to come.

“Many of the German solar cell and module manufacturers will not outlive this crisis,” UBS analyst Patrick Hummel told Financial Times Deutschland.

Bosch subsidiary Ersol reported its first loss since becoming a public company in 2005, losing €15.8 million in the first six months. Market leader Q-Cells recorded a loss of €119.1 million in the first half of 2009 – whereas a year ago the company reported a profit of €47.6 million. Last week it said it was making cuts to save money, including sacking 500 employees.

Much of the demand for solar panels came from within Germany, as people were ordering them to install on their rooftops to supplement their energy supply. But now those orders are being filled by manufacturers in Asia, and at a lower price.

Chinese suppliers like Suntech Power, Yingli Solar or Trina Solar are benefiting from the demand from the German market. In the last two years, the solar panel market share of Chinese companies has risen from almost nothing to 30 percent. Taiwan, South Korea and India are also getting a piece of the action as well.

Thanks to lower labour costs, UBS estimated that the solar panels being sold by Asian companies have price tags two-thirds that of one created by a German company.

“The Asian cell and module manufacturer will displace the Germans – except the German manufacturers that have their production in Asia,” said Anne Kreutzmann, editor-in-chief of the solar industry journal, Photon.

When announcing the loss, Ersol boss Holger von Hebel referred to pricing pressure and the overcapacity of the solar-panel manufacturers in Germany. In order for Ersol to cope, nearly half of its staff is already on reduced hours to avoid direct layoffs.

But executives at Ersol are predicting the price of a German-made solar panel to fall 30 percent in order to deal with the current overcapacity in the industry.

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ENERGY

Why electric fan heaters in Germany could make the energy crisis worse

Hundreds of thousands of households in Germany have been stocking up on fan heaters to prepare for winter in the face of rising gas prices. But experts say over usage will worsen the situation.

Why electric fan heaters in Germany could make the energy crisis worse

Why are people buying fan heaters?

The cost of heating a home in Germany with oil or gas has doubled in the past two years, according to a heating index published on Tuesday by the non-profit consulting company Co2online.

Due to the rising costs, people are looking for alternatives to heat their homes. And in the first half of this year alone, 600,000 electricity-powered fan heaters were snapped up in Germany, according to market research firm GfK.

But this way of heating could end up being more expensive for consumers – and lead to higher gas consumption than with gas heating, an analysis by strategy consultancy Oliver Wyman shows.

READ ALSO: German households see record hikes in heating costs 

What happens when there’s overuse of electric heaters?

If fan heaters were to be used by people in large numbers, utilities would have to generate much of the additional electricity in gas-fired power plants, according to the firm. The fan heaters would then exacerbate rather than alleviate the energy supply shortages. At worst, there would even be a threat of local power outages due to grid overload.

READ ALSO: Should I invest in an electric fan heater in Germany this winter?

The main problem is that fan heaters provide heat less efficiently than standard gas heaters, said Jörg Stäglich, head of the European Energy & Natural Resources Practice and global head of utilities at Oliver Wyman.

“Their use is therefore more expensive for households than conventional heating.”

To generate the same heat, he said a fan heater requires twice as much gas via a detour to produce electricity in gas-fired power plants as boilers that burn it directly.

“There’s a vicious circle looming,” Stäglich said. “If we have to use more gas for electricity generation, the amount of gas available in Germany will become even scarcer and the price of gas will rise.”

In a scenario where 30 to 50 percent of the 20 million German households with gas heating relied on fan heaters to keep their homes warm in winter or at least compensate for a lowered room temperature, the demand for electricity would increase by up to 25 percent at peak times, experts calculate.

Experts say that even with rocketing gas prices, the use of electric heaters isn’t justified. 

Although the price of electricity has not risen as dramatically as gas, it has still climbed significantly this year.

“That’s why electric heating is not recommended at all,” said Norbert Endres, energy consultant at the Bavarian consumer centre. 

Stäglich added that using fan heaters was “not economical, climate friendly or sensible”. 

Vocabulary 

Fan heater – (der) Heizlüfter

Gas consumption – (der) Gasverbrauch

Power cut – (der) Stromausfall

We’re aiming to help our readers improve their German by translating vocabulary from some of our news stories. Did you find this article useful? Let us know.

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