Reuters :
European governments due to move to support their solar power manufacturers this week will be too late to stop solar panel maker Meyer Burger packing up a German factory to send production to the United States.
The plant in Freiberg in eastern Germany closed in mid-March with the loss of 500 jobs, as the Swiss-listed firm joined a growing list of European renewable energy manufacturing factories shutting down or moving. In the past year, at least 10 have said they are in financial difficulties.
On a recent visit to the site, giant white robotic arms hung dormant over empty wooden pallets as workers prepared the last production line for shutdown. Talks with the German federal government to try to secure a future for the factory ended without success in late March, a company spokesperson told Reuters.
Germany’s economy ministry said it was aware of the “very serious situation” of German companies and has been examining funding options with the industry for over a year. It agreed to give Meyer Burger an export credit guarantee for equipment produced in Germany to be used at the US factories, which will help a site nearby but won’t save the Freiberg one.
The closure, which in one sweep reduced European solar panel production by 10 per cent, comes despite a boom in wind and solar energy in Europe. Additions to renewable energy capacity, including solar panels, are running at record pace, according to data from the International Energy Agency.
But Europe-based manufacturers that supply those panels are being crushed by competition from China and the US, whose governments give more support to their producers.
The situation poses a dilemma for European governments keen to fight climate change: Either offer more support to ensure local production can stay competitive, or allow the unfettered flow of imports to keep up the pace of installations. A meeting in Brussels between European energy ministers on Monday will make a gesture of support for the struggling industry.
China is expanding solar output and now accounts for 80 per cent of the world’s solar manufacturing capacity. The cost of producing panels there is around 12 cents per watt of energy generated, compared with 22 cents in Europe, according to research firm Wood Mackenzie.
US subsidies announced as part of the 2022 Inflation Reduction Act allow some renewable energy manufacturers and project developers to claim tax credits, which are attracting businesses from within the European Union and beyond.
Meyer Burger says its plans include a solar panel factory in Arizona and a solar cell factory in Colorado.
“We made a bold move in the absence of any industry policy support in Europe and shifted a solar cell expansion project from Germany to the US,” its chief executive Gunter Erfurt told Reuters in an interview.
Similarly, battery company Freyr which operates mostly in Norway, has stopped work at a half-finished plant near the Arctic Circle and is focusing on plans for a plant in the US state of Georgia after Washington announced the policy.
Freyr said in February it had changed its registration to the US from Luxembourg.
“We did spend quite a bit of time trying to really make sure that we weren’t committing a mistake,” said Birger Steen, chief executive of Freyr: The company first hunted for support from Norwegian or European governments.
“We got to the point where we concluded that that form of policy level response was not forthcoming.”
Asked to comment, Norway’s ministry of trade and industry said that it had launched an industrial policy framework targeting energy transition technologies including solar and batteries, but did not directly address questions about additional funding for the companies in this story.