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Is German energy a model for Obama?
(Agencies)
Updated: 2008-12-11 11:32 DRESDEN, Germany -- While the rest of the economy plunges into recession, Germany's solar power industry is full of optimism, fat order books and factories humming at full capacity, in stark contrast to the surrounding economic gloom.
Throughout eastern Germany's "Solar Valley," manufacturers are racing to keep up with global demand for solar panels and the state-of-the-art machinery that makes them, even though share prices have fallen sharply this week. "There's no recession here," said Frank Asbeck, the founder of SolarWorld AG , the world's third-largest photovoltaic company, which makes everything from solar-grade silicon to solar cells and solar panels. "We're always recruiting staff and are happy to hire workers laid off elsewhere," he said during a tour of a 480-million euro ($600 million) manufacturing plant in Freiberg south of Dresden. SolarWorld's share price took a beating along with others on Tuesday after Germany's Q-Cells , the world's leading solar cell maker, issued a profit warning, saying 2008 sales growth would slow to 43 percent and to 10 to 20 percent in the first half of 2009. The economic downturn has been squeezing lending but there has been little sign of a downturn in investment in solar power, said Bernd Rau, co-founder of Roth & Rau, which has 40 percent of the world market for machines that make solar panels. "The sun doesn't send any bills," Rau said, adding banks have become fully aware of the sun's ability to produce recession-proof cash flow. "The financial crisis isn't going to change anything about the fundamental vision of solar power." Q-Cells' chairman Anton Milner, who stunned markets with his warning on Tuesday only a week after saying the crisis was not having an impact, said he thought the downturn would now cause problems for the smaller, weaker players in the sector. Yet Milner said he expected very strong US growth even though the steep drop in oil prices in recent months is a key factor clouding the horizon for growth. Theo Kitz, analyst at Merck Finck in Frankfurt, said the growth in photovoltaic was still strong despite market volatality. "The solar sector is in one of the fastest growing markets despite the recession and that won't be changing," he said. "It's not going to matter if annual growth rates fall a few percentage points below the 60 percent rates we've been seeing." Despite its heavy cloud cover most of the year, Germany produces half of the world's solar power, twice as much as its nearest rival, Japan, and four times third-placed United States. It produced 3.78 gigawatts in 2007 and in 2008 will add 1.5 gigawatts. Renewables account for 14 percent of its electricity. This success was set in motion a decade ago, when a new coalition of Germany's Social Democrats and Greens set up a framework to promote solar, wind and other renewables by requiring utilities to buy clean energy at above-market rates. It worked, as the scores of companies in "Solar Valley," in the eastern state of Saxony, amply show. The law has since been copied in more than 40 countries. Germany's renewables sector has been recording growth of 30 percent per year since 1998 and now employs some 250,000 people, turning entrepreneurs like Asbeck and Rau into millionaires. It is expected to hit 450,000 jobs in the decade ahead and before long bypass the car industry's 600,000 workers, as rising energy prices and falling production costs make sustainables even more attractive. German equipment and know-how is now exported around the world and Germany is the world's third-biggest producer of solar panels after China and Japan. Despite the optimism in Germany, there has been much turbulence in the solar industry this year. On Tuesday when Q-Cells dropped 18 percent while SolarWorld lost 5 percent. The stock prices of other solar power companies around the world have also fallen on fears of oversupplied markets. In Spain, Europe's second-biggest market after Germany, the government slashed subsidies for solar providers in September because demand was so high. In Germany, utilities will be paying out less to solar providers from 2010, reflecting the sector's strong gains in recent years. |
