Swiss investor aims to undo China’s grip on EU solar sector
• Meyer Burger Technology has bought SolarWorld stock and patents and plans to restart module production in Germany from 2021
ASwiss company is buying up cheap solar assets in a move to reclaim a key link in Europe’s renewable energy supply chain from China.
Meyer Burger Technology said it is planning to restart module production in Germany’s “Solar Valley” from 2021 to feed growing EU demand for green energy. Over the past decade, EU manufacturers have been crushed by Chinese panel makers that have grown to dominate the global market.
“It’s a problem that the world leaves solar panel production to China,” said Meyer Burger CEO Gunter Erfurt.
The company bought the stock and patents of Germany’s bankrupt SolarWorld and rented a factory south of Berlin to build the solar modules. It has raised Sf165m to revive manufacturing, with a potential output covering almost a third of annual new European panel demand by the middle of the decade.
Researchers warned in May that the bloc had to hugely ramp up solar generation to meet its 2030 climate goals. Bringing back manufacturing capacity from China could help spur employment and the development of new automatedmanufacturing technologies, according to the report by the European Commission’s Joint Research Centre.
Meyer Burger, based outside
Bern, paid just €12m for the assets of SolarWorld, a company that achieved a peak market region value of along about Germany €4.6bn’in s border 2007. Erfurt grew up in the mining to the Czech Republic and was formerly MD at the defunct panel maker.
Solar Valley, an hour’s drive south of Berlin, is an industrial reminder of Germany’s solar boom-to-bust years. In the heyday of module production in the late 2000s, the region boasted 3,500 workers, most employed at Q Cells. Insolvent by 2012, that company lingers on with less than a fifth of its former workforce in Germany as a unit of South Korea’s Hanwha.
Meyer Burger will seek to narrow Chinese advantages while trying to stay a nose ahead in technological superiority, according to Erfurt, who said engineering talent in eastern Germany is now more cost competitive than in Shanghai.
EU policymakers too have been trying to support local production — in June they renewed tariffs as high as 75% on solar glass from China. However, that move drew criticism from Meyer Burger’s CEO, who said it could raise the price on panels that rely on Asian supply chains.
The tariffs on solar glass are “a problem and not an advantage”, Erfurt said on Tuesday.
Current solar growth rates in Europe lend a measure of credence to Erfurt’s gamble. Led by Spain, the trade bloc added 16.7GW of solar last year, a jump of more than 100% on 2019. Counting on solar to feed power to electrical mobility and heating, Germany last year almost doubled its target for solar to about 98GW by 2030, more than the UK’s current total electricity capacity.
It was suggested in a 2019 study commissioned by Meyer Burger, and undertaken by the independent Fraunhofer
RETROFITTING OLD FACTORIES HAS NOT ALWAYS HISTORICALLY BEEN AS EASY AS THE FIRMS DOING IT HOPE
Institute, that the company’s future panels may be three years ahead of the competition, potentially generating more energy per square metre than similar technologies.
Still, Meyer Burger’s plan is ambitious, said Jenny Chase, the head of solar analysis at BloombergNEF.
“Solar manufacturing is an incredibly difficult business [in which] to make money, and retrofitting old factories has not always historically been as easy as the firms doing it hope,” she said. As Chinese mono modules are now 19 US cents a watt,
Meyer Burger’s units would still have to be “very, very cheap”, according to Chase.
Meyer Burger rose as much as 3.5% and traded at Sf0.16 by late afternoon in Switzerland.
While its shares are “only suitable for risk-tolerant investors” the stock is “clearly undervalued”, wrote Zuercher Kantonalbank analyst Richard Frei in a note this week.