Billions burned in German solar debacle

Just last year the German solar power industry was predicting good times.

Large German companies such as Siemens and Bosch are abandoning the solar industry. Their strategies resulted in debacles – their investments in solar power companies cost them billions. Compared to what investors have lost as a result of their investments in solar stocks, however, these sums are almost negligible amounts. The former stars at the stock exchange, SolarWorld and Q-Cells, have destroyed tens of billions of capital. –Thiemo Heeg, Frankfurter Allgemeine Zeitung, 18 June 2013

via latest newsletter from the Global Warming Policy Foundation – h/t Benny Peiser at the GWPF.

The following is adapted from the Frankfurter Allgemeine Zeitung.

Large German companies such as Siemens and Bosch are abandoning the solar industry. Their strategies resulted in debacles – their investments in solar power companies cost them billions.

Green strategy resulted in debacle

Siemens has had to accept an expensive experience. On Monday, the group announced that the loss-making solar division will shut down by next spring of next year. About 280 employees, most of them in Israel, will be affected. By purchasing the Israeli company Solel, CEO Peter Löscher entered the market for solar thermal systems, from which he expected rapid growth. The strategy resulted in a debacle: All in all, Siemens lost around one billion Euros. The closure alone will cost the company double-digit millions.

In March, the automotive supplier Bosch announced its production of solar cells and solar modules will end in early 2014. Some 3,000 employees in eastern Germany face unemployment. Bosch chairman Franz Fehrenbach had been pushing into the solar business since 2008, but when asked recently if the industry is doomed to “die,” he answered gloomly, “For Germany, it looks like it is, unfortunately.”

Investment in the photovoltaic industry has cost Bosch even more than Siemens: around 2.4 billion Euros.

Capital losses of more than 21 billion Euros

Compared to what investors have lost as a result of their investments in solar stocks, however, these sums are almost negligible. The former stars of the stock exchange, SolarWorld and Q-Cells, have destroyed tens of billions of capital. In December 2007, the solar cell and module manufacturer Q-Cells, listed with a market value of more than 11 billion Euros, was a candidate for promotion to the first tier in the stock exchange. It is well known that this did not happen.

Instead, the company had to file for bankruptcy in 2012 and was bought by a Korean company; the private investors lost practically everything.

25 Thoughts on “Billions burned in German solar debacle

  1. stan stendera on June 21, 2013 at 7:18 pm said:

    More white wine please. I have been saying for over a year that the end is near. It is getting nearer. To paraphrase the immortal Churchill, this is not the end of the beginning, this is the start of the ending for the global warming nonsense.

    • May I suggest, sir, you sample this little 2010 River Hills Chardonnay? You may be amused by its presumption.

    • Mike Jowsey on June 21, 2013 at 9:36 pm said:

      I’ll have the 2010 Pegasus Bay Pinot Noir, thanks. No presumption, just a bottle of good humour.

      Btw, seems the general public have no clue about the demise of western solar manufacturers. Solyndra would be a prime example, getting bailed out to the tune of hundreds of millions by the Obama administration six months before filing for bankruptcy in Oct 2012 with the loss of 1100 jobs.

      The other day someone asked me why they are failing. I explained that in the rush to pursue “low carbon energy”, governments had heavily subsidised the industry, but those subsidies were not sustainable and without them the industry collapses. As it seems to be doing.

      I was reading a NZ solar company website which says this under ‘Environmental Benefits':
      “Producing electricity with solar energy emits no greenhouse gases, no pollution, and uses no fossil fuels.” They don’t mention the mining of rare earth metals, glass and steel manufacture, copper wire with plastic insulation, integrated circuitry, etc etc etc. In fact they don’t actually mention one specific environmental benefit – just generalised hand-waving.

      I am currently waiting for a quote from this same crowd for a 10kW system. I’ll let you know how those economics stack up.

      Meanwhile, I’ll have another Pinot, ta.

    • Bob D on June 24, 2013 at 10:34 am said:

      I love that quote:

      “This is not the end, it is not even the beginning of the end, but it is perhaps the end of the beginning.”

      -Winston Churchill, Nov 1942.
      The War still had three long years to run, but he saw that the tide had changed.

  2. Andy on June 22, 2013 at 8:34 pm said:

    Peter Glover in The Commentator

    The Great Renewables Scam Unravels

    Energy insiders have long known that the notion of ‘renewable energy’ is a romantic proposition – and an economic bust. But it is amazing what the lure of guaranteed ‘few strings attached’ government subsidies can achieve. Even the Big Oil companies bought into the renewables revolution, albeit mostly for PR reasons. Like Shell, however, many quickly abandoned their fledgling renewable arms. Post-2008, they knew, the subsidy regimes could not last. Neither was the public buying into the new PR message.

    Now it was just a question of time before Europe’s world leading pioneers of solar and wind power, Germany and the UK, decided they had had enough of the self-inflicted economic pain. And all the signs are – as Germany’s solar sector just went belly up and the UK is made aware of how much every wind job actually costs – that the slow implosion of the renewables revolution is under way.

    The plain fact is that installing solar panels, especially in the northern hemisphere, makes about as much economic sense as Iran heading up a UN Human Rights Commission (which it has done by the way). Equally, the viability of windfarms has always been the renewables industry’s worst kept secret.

    http://www.thecommentator.com/article/3827/the_great_renewables_scam_unravels

    Hat tip Hilary

    http://hro001.wordpress.com/2013/06/21/quote-of-the-day-appalling-journalism-promoted-unsustainable-renewables/

  3. Simon on June 22, 2013 at 9:50 pm said:

    Isn’t because Chinese companies are selling solar panels for half the price of their competitors? The EC reckon they are price dumping: http://www.bbc.co.uk/news/business-22766639

    • Richard C (NZ) on June 23, 2013 at 10:36 am said:

      >”Isn’t [it] because Chinese companies…..”

      No. The entire industry and corporate financial models, including Chinese, is built around over optimism and subsidies:

      ‘China’s Solar-Panel Boom and Bust’

      How a mad dash into a burgeoning sector turned into a scramble for support.

      If one city epitomizes China’s role as cheap manufacturer for the world, it’s Wuxi, a sprawling metropolis of more than 4.5 million people a short bullet-train ride northwest of Shanghai. Out beyond the old town, with its ancient temples and canals, much of modern Wuxi is a massive industrial park, a seemingly endless grid of wide, straight roads fronting squat factories bearing the names of international brands: Epson, Nikon, Panasonic.

      Wuxi’s industrial zone also is the epicenter of the global solar-energy industry, a sector now in the throes of convulsive growing pains. Specifically, the zone is home to the gleaming glass-fronted headquarters of Suntech Power Holdings Co., which over the last decade sprang from local startup to world’s largest solar-panel maker — and then, this spring, declared that its main business unit was bankrupt.

      Lesser versions of Suntech’s bust are repeating themselves throughout China’s solar sector, as other once-triumphant panel makers flirt with insolvency. They grew too fast, propelled by inefficient environmental subsidies in Europe and the United States and by billions of dollars in backing from governments and banks in Wuxi and across China. The Chinese solar stampede was a mad dash for easy money, and at first it seemed unstoppable. But then Western governments dialed back their solar largesse, demand for China’s solar panels failed to keep pace with the industry’s torrid production increases, and inventory began piling up. The result: Manufacturers’ balance sheets began turning red.

      Continues>>>>>>>

      http://www.gsb.stanford.edu/news/headlines/chinas-solar-panel-boom-bust

    • Mike Jowsey on June 23, 2013 at 1:10 pm said:

      Simon, the Chinese are dumping because their production exceeds demand and the industry is teetering on total collapse.

  4. Australis on June 23, 2013 at 5:38 pm said:

    Panels are only one cost component of a photovoltaic system.

    Cheap panel imports from China should have given a huge boost to European installers. The retail price didn’t drop, so the Chinese ‘dumping’ contribution is going directly into margins.

    But even this boost hasn’t been able to salvage the European industry.

  5. Richard C (NZ) on June 23, 2013 at 7:33 pm said:

    According to James Hansen, the current increase in global warming is: “…equivalent to exploding 400,000 Hiroshima atomic bombs per day 365 days per year. That’s how much extra energy Earth is gaining each day”. This meme is currently being propagated everywhere especially by John Cook, Climate Communication Fellow for the Global Change
    Institute at the University of Queensland and Skeptical Science blogger, e.g. in a speech on extreme weather:

    “All these heat-trapping greenhouse gases in our atmosphere mean … our planet has been building up heat at the rate of about four Hiroshima bombs every second – consider that going continuously for several decades.”

    http://www.theaustralian.com.au/news/earth8217s-temperature-building-at-rate-of-four-hiroshima-atomic-bombs/story-e6frg6n6-1226668001612

    90% going into the ocean according to Cook. Hansen:

    http://www.ted.com/talks/james_hansen_why_i_must_speak_out_about_climate_change.html

    Vancouver Observer, Climate Snapshot blog:

    “That’s 278 atomic bombs worth of energy every minute – more than four per second — non-stop. To be clear, that is just the extra energy being gained each day on top of the energy heating our planet by 0.8 degree C. It is the rate at which we are increasing global warming.

    Even if we stopped burning all fossil fuels tomorrow, our past CO2 emissions will continue to add hundreds of thousands of A-bombs worth of energy each day for years.”

    http://www.vancouverobserver.com/blogs/climatesnapshot/2012/05/15/global-warming-increasing-400000-atomic-bombs-every-day

    # # #

    Shame that, for some reason (practical – it’s apparent energy, not real) , we can’t capture all that “free” energy with PV’s and water heating systems. It is downwelling radiation just like solar so there is no difference directionally.

    It really is, it seems to me, an extraordinary waste of “400,000 Hiroshima atomic bombs per day 365 days per year”. This would be the ultimate “green” energy wouldn’t it?

    • Richard C (NZ) on June 23, 2013 at 9:19 pm said:

      >”90% going into the ocean according to Cook”

      Post at Lucia’s re Watenabe et al ‘Strengthening of ocean heat uptake efficiency associated with the recent climate hiatus':

      http://rankexploits.com/musings/2013/watanabe-strengthening-of-ocean-heat-uptake-efficiency-associated-with-the-recent-climate-hiatus/

      Glenn Tamblyn repeats the current desperation that Rob Painting is fond of:

      +++++++++++++++++++++++++++++++++++++++++++++++++++
      Glenn Tamblyn (Comment #116687) June 20th, 2013 at 8:00 pm

      DeWitt Payne said

      “But doesn’t that imply that the heat content of the top layer has to increase in order to get more down-mixing? Yet the ARGO data says the 0-700m layer heat content has been flat. I must be missing something.”

      No, there is another possible mechanism. Increased heat flow downward can occur through a combination of two factors. Because the volume of water moving is unchanged but it has a higher heat content per M^3, or because its heat content is unchanged but a larger volume of water is being moved.

      In the latter case this wouldn’t show up in the ARGO data for the surface.

      And this is what is believed to be happening. The major ocean gyres, one in each ocean basin, psh water towards their centers where it then downwells through a process called Ekman Pumping. And the gyres are created by the winds. Particularly the Trade winds near the Equator blowing from the East and the Roaring Forties blowing from the West.

      It is being suggested that the increase in downwelling of heat is correlated with an increase in the Trade winds which could then spin up the gyres and increase the downwelling. And the climate models aren’t doing that well at predicting the increase in the Trade Winds so they don’t predict the increased downwelling that well.

      But as sequestration of heat to greater depth continues, the increasing buoyancy at depth as a result would provide a counter balancing force to the Ekman pumping and eventually slow it down again.

      It is quite possible that there is a natural oscillation in this pattern of Trade winds/gyres/downwelling and that we see this manifested in things like the PDO.

      http://rankexploits.com/musings/2013/watanabe-strengthening-of-ocean-heat-uptake-efficiency-associated-with-the-recent-climate-hiatus/#comment-116687
      ++++++++++++++++++++++++++++++++++++++++++++++++++++++++

      What Tamblyn is describing is also known as “funneling” and has been observed in localized seasonal situations and documented in the literature. But according to Tamblyn, Painting and others, all the energy from the 4+ Hiroshima bombs every second is being funneled down below 700m in all 3 ocean basins by just the 3 gyres. Apparently (Tambln Comment #116806 June 22nd, 2013 at 3:45 am) this phenomenon is being missed in the 0-700m data because the ARGO floats don’t measure it, this in turn because the random distribution of the floats has to be maintained by oceanographic vessels moving the floats “Obviously if left for too long they would all start to concentrate in the center of the gyres”.

      My credibility is being stretched beyond “Safe” limit so I’d like some verification of all this. As does tetris for example:

      ++++++++++++++++++++++++++++++++++++++++++
      tetris (Comment #116745) June 21st, 2013 at 11:17 am

      Glenn Tamblyn

      Unless I’m missing something in your reply to DeWitt, you appear to be arguing that it is actually possible for joules/calories/heat [call it what you will] to make their way down through the upper 700 meters of all the oceans around the world [70% of it’s surface not to mention the volume involved] without this showing up in the ARGO data -which, it bears repeating, is the absolute best three dimensional spacially distributed oceanic data we have.

      I think that it is stretching credulity just a tad too much to ask people simply to accept that this process does not show up in the data gathered by over 3000 state-of-the-art sensors.

      “Transmutation” comes to mind and until Trenberth, you or others can come up with a verifiable, repeatable experiment that demonstrates how this heat transfer actually occurs without leaving a trace on the way down, as far as I’m concerned [and a good number of others I’ve discussed this with] Trenberth’s “hiding heat” has the makings of alchemy, homeopathy, astrology, desperation or fish gut reading. Your pick.
      +++++++++++++++++++++++++++++++++++++++++++++++++++

      I’m going with “desperation”.

    • Bob D on June 24, 2013 at 10:30 am said:

      Richard C:

      “I’m going with “desperation”.”

      Absolutely. What we’re seeing here is scientists (and I use the term loosely) who simply cannot let go of their pet theory, even when it’s proved wrong.

      We have observed this phenomenon many times in the past, from the time of Galileo through to Hoyle. Even Einstein fell victim to it, with his cosmological constant, which he later called “the greatest blunder of my life”.

      But Einstein was able to admit he was wrong. This crowd never will, I suspect.

    • Richard C (NZ) on June 24, 2013 at 11:40 am said:

      Bob I note re Watenabe et al that Lucia includes what must be the uppermost possibility that ‘there is no warming’ at present but she thinks it is due to natural variability only. She thinks warming will resume because she discounts other factors. At top:

      “Their conclusions are that warming will resume (and I strongly suspect it will but thought so before I read this paper.)”

      Further down,

      “This would tend to support the notion that the slowdown could be due to natural variability rather than other possible explanations like ‘the sun’, ‘volcanic aerosols from small eruptions’, ‘asian brown cloud’ or even ‘there is no warming’.”

      Can’t say I go along with either of those quotes except for ‘there is no warming’ at present. I can’t see any reason, with the solar situation as it is, for warming to resume if there’s no warming now. In terms of scientists admitting they’ve been proved wrong I think Hans von Storch is facing up to this rather better than any other IPCC-aligned scientist I can think of:

      SPIEGEL: How long will it still be possible to reconcile such a pause in global warming with established climate forecasts?

      Storch: If things continue as they have been, in five years, at the latest, we will need to acknowledge that something is fundamentally wrong with our climate models. A 20-year pause in global warming does not occur in a single modeled scenario. But even today, we are finding it very difficult to reconcile actual temperature trends with our expectations.

      http://www.spiegel.de/international/world/interview-hans-von-storch-on-problems-with-climate-change-models-a-906721.html

      At least with this ocean gyre funneling idea around that is apparently taking the energy of 4 A-bombs a second down below 700m the proponents and the likes of Balmaseda et al (Trenberth included) and Watenabe et al will eventually have to do basin-by-basin analysis, which neither did, and come up with some hard observational evidence if they can i.e. put up or shut up.

      AR5 final will be interesting in this respect.

  6. I know some people in rural South Canterbury who are “off grid” and had their $40,000 solar array fried by an electrical storm. This wasn’t a one off because some neighbours of theirs had $20,000 taken out
    (I don’t know whether the thing was a total loss as I never heard back from them )

    It does, however, show the risk that you take when you invest a fairly large amount of money (possibly 10% of your property value) on solar, and the payback is around 20 years I think

    This area is still covered in snow so the amount of solar energy that anyone would have produced would be zero for the last 5 days. You’d also be hoping that the snow didn’t drag off your solar panels when the thaw comes.

    Solar might be a bit more attractive if it were available on a lease basis, and I think some companies are offering this.

    • Richard C (NZ) on June 24, 2013 at 12:06 pm said:

      Interesting report Andy. I had not heard of that elsewhere.

      When you go off-grid you’re saying goodbye to all the accumulated knowledge of reticulation network operators and take on the risk yourself as you point out e.g. 3 phase line dropout fuses are usually fitted with lightening arrestors. The solar systems will obviously have to have some extra protection equipment that isn’t in the initial cost at present. Either that or it is an option that wasn’t taken up perhaps to save some dollars and take the risk.

      And no you really don’t want snow covered solar cells or even overcast skies in sub zero conditions either if it’s heat you want.

  7. From the UK

    “Dark clouds over the solar panels”
    Developers currently building solar farms receive a subsidy of up to £85 per MWh of energy produced

    http://www.telegraph.co.uk/comment/telegraph-view/10135661/Dark-clouds-over-thesolar-panels.html

    In NZ terms, that is $168 of subsidies per MWh

    I don’t know what the average price of electricity is in the UK, but current spot prices in NZ are around $80 per MWh as of today

  8. Andy on June 24, 2013 at 6:35 pm said:

    “Can wind and sun power run trains on time?”

    Short answer:

    No

    Longer answer:

    http://www.express.co.uk/news/uk/409594/Can-wind-and-sun-power-run-trains-on-time

    Network Rail has drawn up contingency plans to tackle short-term emergencies.

    During any prolonged power cuts, it will insist operators run diesel trains on electrified routes and it will find alternative ways to signal trains.

    Rail experts also predict that the National Grid might reduce the voltages to suppliers such as EDF, which could mean slower trains.

    The nightmare scenarios have forced Network Rail to undertake a “future-proofing” exercise.

    To reduce reliance on the National Grid, Network Rail has been considering generating its own electricity.

    By the way, “generating its own electricity.” means building its own windfarms, which will also be not generating any power at the same time that other wind farms are not generating any power.

    • Mike Jowsey on June 24, 2013 at 9:02 pm said:

      Andy, here is an excellent 2-min silent animation which puts wind power generation into perspective:
      http://www.youtube.com/watch?v=zc7rRPrA7rg

    • Thanks Mike – that is a very graphic demonstration of the land area required by wind turbines (and solar) vs a single nuclear station (or coal for that matter) that provides the same power.

      The sad thing is that you still need the conventional power station anyway, as backup for the wind.

  9. Richard C (NZ) on June 24, 2013 at 7:01 pm said:

    The same energy debacle spawned by Lysenko-style AGW-based science is being mirrored in education and social control. In this respect I’ve come a full circle from where I started in this climate debate. Keitho provides the link to this blog essay in the WUWT ‘Getting ‘Cooked’ by Hiroshima Atomic Bomb Global Warming’ thread:

    ‘Reorienting World Order Values Via the Intervention of Activist Education and Progressive Politics’

    Quoting first two paragraphs,

    Why yes that is a quote from a Future Worlds Project financed by the Rockefeller Foundation and the Carnegie Endowment for Peace in the early 70s. At least we now know why education just keeps coming up as the vehicle of choice to initiate social change without that fundamental fact being particularly noticeable. Even if caught, we just get told to defer to the professionals so that the political coup can continue at a slower pace. Drastic Gradualism is actually the term used to get the West to a radically different social, economic, and political system. Hopefully by the year 2000 was the Plan. The 70s were to have been the years to use education to change the prevailing Consciousness before initiating the mobilization for change in the 80s. The precise language used was to:

    “supplant the outmoded values/ belief system associated with the state system [they mean nation-state, not those pesky political units the US has 50 of] in a pre-ecological age. [in other words, before Paul Ehrlich started writing about impending disaster]. The emergence and diffusion of a new value/belief consensus [helpfully provided as a Conceptual Understanding so ALL students will know it] is a vital precondition for the kind of active politics that would accomplish the transformation of the structures of power and authority in subsequent period of time.”

    Continues>>>>>

    http://www.invisibleserfscollar.com/reorienting-world-order-values-via-the-intervention-of-activist-education-and-progressive-politics/

    Keitho’s comment:

    http://wattsupwiththat.com/2013/06/23/getting-cooked-by-hiroshima-atomic-bomb-global-warming/#comment-1345151

    # # #

    It’s not just energy that has been subverted in the quest for a new world order but it’s one debacle that can be quantified in monetary terms so it stands out. The “New Thinking” basis of it (actually the old Humanist Marxism) is less visible but that’s where the powerful root of such economically distorted international business and governmental failures is planted.

    The UN’s Agenda 21 is just one expression but there’s plenty of other “organic reorientation” expressions, the educational “Common Core” being another.

  10. Mike Jowsey on June 24, 2013 at 7:45 pm said:

    The ‘Great Renewables Scam’ Unravels
    Date: 22/06/13 Peter C Glover, The Commentator
    In many parts of northern Europe, wind and solar projects may be highly visible facts on the ground. But the headline economic fact behind renewable energy is, and always has been, its sheer and blatant “unsustainability”

    http://www.thegwpf.org/great-renewables-scam-unravels/

  11. Alexander K on June 25, 2013 at 10:44 am said:

    My visit to rellies in the village in Yorkshire from whence my Grand-Dad fled in the late 19th century, proved to me beyond doubt that my English (and Scots) cousins have been force-fed the mythology of perpetual government funding without most ever questioning who pays the taxes! Now that steeply rising domestic power costs are pushing them into fuel poverty, they are beginning to realise that the idea of ‘renewables’ without hydro generation is not only built on moonbeams and fairy tales but will kill all but the wealthy if the madness goes unchecked.
    But when an entire culture has grown up on unquestioned taxpayer-paid subsidies which are mostly hidden from the public view (and the subsidies in the UK are truly enormous), it takes a while for all the pennies to drop!

  12. Richard C (NZ) on June 25, 2013 at 7:40 pm said:

    ‘China solar firms to dodge EU duties’

    As Europe slaps duties on $US15 billion of solar panels, their Chinese producers are preparing to counterattack with devices assembled from South Africa to Istanbul that will avoid the import taxes.

    Trina Solar Ltd., JinkoSolar Holding Co. and Canadian Solar Inc. are among Chinese companies preparing to shift manufacturing abroad, dodging penalties imposed by the European Union in the bloc’s biggest ever anti-dumping action.

    Read more: http://www.smh.com.au/business/carbon-economy/china-solar-firms-to-dodge-eu-duties-20130625-2otng.html#ixzz2XD9W1wCL

    “The levies will increase prices for European solar-plant builders and homeowners who install them on rooftops. They were expecting to benefit fully from solar-module prices that declined last year because of a supply glut and weaker demand.”

    # # #

    Taxes that increase renewable energy system prices – ironic how unintended consequences work out. And so like fossil-fuel energy carbon taxes too – double irony.

  13. Richard C (NZ) on June 27, 2013 at 10:34 am said:

    ‘Obama’s Radical Climate Agenda’

    By The Editors

    [Concluding remark, page 2]

    Rather than develop what we already have, the Obama administration is threatening to hamstring our most likely source of economic growth and new jobs for the coming generation in the hopes that fads such as solar power will pay off. That is not justified by science, by economics, or by sensible policy analysis.

    What it is, in fact, is an attempt by a foundering administration to change the subject from scandal to sunshine.

    http://www.nationalreview.com/article/352025/obamas-radical-climate-agenda-editors/page/0/1

    # # #

    The National Review editors are referring to the mounting internal US scandals dogging the Obama presidency but stimulus funds wasted on failed solar startups is one of those but being gazumped by the others and fading from attention i.e. not front-of-mind anymore in the US (not that it ever was for everyone) because there’s only so much controversy for the attention span.

    Not so in Europe and Germany in particular I suspect, the failure of their “green” renewable policies are only just now coming to attention in the midst of the financial crisis. Once the energy sector squander is linked to financial failure in the public mind (if it actually ever is) the Greens have a problem on their hands.

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