Siemens to pull the plug on solar power business
Siemens announced yesterday that it was pulling out of the solar business and is currently holding talks with potential buyers.
As part of a wider reorganisation programme, the German engineering company has reiterated its commitment to renewable energy sources, claiming it plans to strengthen its focus on wind and hydro power.
Siemens' solar division has 680 employees and made under €300m in revenues last year, Reuters reported. However, it has made significant losses recently blaming them on "changed framework conditions, lower growth and strong price pressure."
In fiscal 2011 (ending September 30 2011) Siemens Energy Sector as a whole had made revenues of €24.9bn, generated a profit of €3.9bn and, from October 1, had more than 82,000 employees.
"The global market for concentrated solar power has shrunk from four gigawatts to slightly more than one gigawatt today. In this environment, specialised companies will be able to maximise their strengths," explained Siemens Energy Sector chief executive officer Michael Süß.
Siemens predicts that energy from renewable sources will account for 28% of the global power mix in 2030 and says that global power consumption will rise from 22,100TWh to 37,100TWh in 2030.
According to the company, hydro power and wind energy, which it estimates will generate 54% of renewable energy generated in 2030, will continue to contribute the largest share of energy from renewable sources.
Süß said: "The importance of renewable energy in the global power mix will continue to grow and hydro power and wind energy will remain the major renewable contributors. Our renewable energy activities will be focused on these two areas.
"More than 7,000 employees work in the wind power division and another 2,000 work in the related service business; and the division has an order backlog of more than €10bn.
"Furthermore, we have established our company as the clear market leader for offshore wind power farms and we are also making very good progress in onshore business."
Siemens is not the first company to suffer in the last year as a consequence of a vast overcapacity on the PV industry, which some European companies argue originates in China.
Last month edie reported that price dumping complaints had been lodged by the solar industry who claimed that solar panels and their key components imported from China were entering the European market at prices below market value.
The complaint shows possible price dumping by the exporting producers on the EU market and a possible link between the imports and the damage suffered by the industry.
China is the world's largest producer of solar panels. Approximately 65% of all solar panels are produced there and the EU is China's main export market, accounting for around 80% of all Chinese export sales.
In 2011, China exported solar panels and their key components worth around €21bn (£16.6bn) to the EU.
In August edie also reported major UK solar company Crystalox record a dramatic fall in revenues and profit.
Revenues plummeted by 75% in the last year, from €129.6m in the first half of 2011 to €32.6m in the first half of 2012 and its net income also decreased from €18m to a loss of €28m in the same period.