Green Bloodbath Accelerates – German Solar Giant Q-Cells On The Brink Of Collapse!

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The Wall Street Journal Germany has an in depth analysis of the collapse of German solar module giant, Q-Cells: Too Close to the Sun – The Rise and Fall of Q-Cells.

It’s worse than we thought!

Last Tuesday the solar company based in Thalheim in Saxony-Anhalt, once the largest module manufacturer in the world, very quietly announced its results for 2011 – a blood bath. The company lost 850 million euros and is now teetering on the brink of bankruptcy, with no hope of a rescue. It is the latest in a series of spectacular solar company failures now ripping through the industry. The number of weird economic events keeps surging.

The Wall Street Journal reports how the company was founded by engineers in 1999 amid flourishing hope and optimism in what was supposed to become the cornerstone of Germany’s dreamed “Solar Valley”. The newly elected Socialist-Green coalition government, led by the newly elected Gerhard Schroeder, hailed it as the beginning of a new industrial era would sweep Germany into the 21st century. That future was secured by the passage of the Energy Feed-in Act (EEG) in 2000, which guaranteed producers of green energy fixed rates for 20 years and cheap low-cost credits for solar systems. This led to a boom in the solar industry and wind industry over the decade that followed.

Among the solar companies that sprouted overnight was Q-Cells. By 2005 the company had grown to 750 employees with annual sales of €300 million. Consulting company Ernst & Young named then Chief Executive Milner as Entrepreneur of the Year. Q-Cells expanded production and opened plants overseas, one in USA.

By 2007 the company had grown to over 1700 employees and sales of €860 million and profits of €150 million. Green energy seemed to be the way to go.

Today things don’t look rosy at at all. Q-Cells shares today can be bought for a €0.23, down from its peak of over €80 a few years back (click on 5 J., which is 5 years). Insolvency appears imminent. What happened? Everything seemed to be going right just a couple of years ago. But as the Wall Street Journal writes, everything actually had gone wrong.

As the industry boomed in Germany, thanks to mandatory feed-in rates paid to solar power producers, cheap manufacturers from China got into the act. Asian manufacturers tooled up on a massive scale and produced the modules at far lower prices. The price of solar modules on the global market plummeted. Then came the crash of 2009, the government rolled back the feed-in rates, Q-Cells had also neglected to invest in R&D. Single woes compounded and caught up. Now the company looks hopelessly doomed.

The Wall Street Journal writes:

2011 – the prices dropped further – Q-Cells succumbed to high operating costs. Old production lines at its headquarters were no longer profitable. They are going to be closed, written off, the employees will have to go. By the end of the year the company had booked a loss of €850 million. Even worse: The company doesn’t see any profit until the year 2014. What remains is pure desperation.”

Is there a chance of a rescue? Stephan Wulf of Warburg Research is gloomy. For him the question is “whether Q-Cells can avoid insolvency and if it will be able to find a place on the global photovoltaic market. Looking at the strong competition from China, I have considerable doubt. about the prospects of Q-Cells surviving. ”

Those are hardly words that will encourage investors.

The Tagesspiegel also has a report on how many renewable energy companies rode the gravy train for years, but did not bother to invest in R&D. Now it’s time to pay the piper.

Warmist scientist on supervisory board

By the way, one of Q-Cells supervisory board members is Prof. Dr. Eicke Weber, Director of the Fraunhofer Institute for Solar Energy Systems ISE, Freiburg. and a harsh critic of Fritz Vahrenholt’s and Sebastian Lüning’s skeptic book “Die kalte Sonne“. I guess there’s a lot we could learn from Prof. Weber.

 

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22 responses to “Green Bloodbath Accelerates – German Solar Giant Q-Cells On The Brink Of Collapse!”

  1. DirkH

    Oh well, one can’t always win.
    “The Tagesspiegel also has a report on how many renewable energy companies rode the gravy train for years, but did not bother to invest in R&D. Now it’s time to pay the piper.”
    The author of that piece is a director of a microbiological research institute and demands “massive” R&D money from the state and a masterplan. Yeah, that’ll work… Of course he wants it centrally planned (he says so literally). So this article is just another gravy train rider demanding his share. Probably he already has some really interesting Algae projects.

  2. Edward.

    Hard not to feel a tinge of sympathy for the workers but then one must remember all the jobs at Q-cells were reliant upon Government induced mandatory subsidy. A subsidy paid for by levying the taxpayer and therefore the whole business was never viable and operated within an inequable fixed market – so to see them in trouble maybe even …bye bye and thus: good riddance to bad **7t – is what I really think.

    Constantly in the UK, we hear about how the new ‘green jobs’ will greatly benefit the British economy, this is purblind idiocy of a special kind. Are they so blinkered by the green advocates, green hedge fund loonies, Watermelon Presidents/UN new world order manipulators [Soros et al] and the eco-lunacy, saving the world will bring in votes [oh no it won’t]…………………do they shove their heads in the sand? [or in another dark place?] – it must be so.

    They [UK pols] cannot open their eyes and observe, that the whole world is actually going into green energy agenda reverse! Just as we in Britain are ramping up the green targets and building ever more bird choppers and sticking useless photovoltaic cells on our roofs – the British political elite makes a speciality of such mental mass delusion [it must be a psychosis], in fact it has to be said, that, yes they’re even more stupid than most European politicians and that’s saying something!

    BTW:

    RWE and E. ON have backed out of Britain’s new fission generating plant and that is bad news for Britain’s power needs, word is the German government was pulling levers behind the scenes – anything on that in Germany – Dirk/PG??

    http://www.eureferendum.com/blogview.aspx?blogno=82372

    1. DirkH

      My speculation is that EON and RWE fear that cheap shale gas and cheap LNG from the USA will make profitability of those nukes very uncertain – with the added risk of a German-style green uprising in the UK… EON and RWE will want guarantees… they’re bargaining…

      1. Edward.

        Yeah good thinking Dirk, spot on I think.

      2. Joe

        Actually, the change in price would not be that great in my opinion.

        Europeans pay 5-6 times more for natural gas than Americans do because a large part of what Europeans are getting is priced to the liquified, shipped form of the fuel (despite the Russian pipelines). A larger supply of that LNG will only change the price slightly – nowhere near the price one would pay were it domestically produced and neither liquified of transported by ship.

        What MIGHT change pricing that is Polish shale and Israeli offshore gas production. That would certainly be awelcome change – EVERYTHING has energy in it. Affordable energy is the key to the weaker European economies improving their output by improving overall economic productivity (which is to say: lower price per unit of material economic output).

  3. Mindert Eiting

    The Amsterdam Environmental Alderman (Van Poelgeest) has decided today to build about eighty windmills in Amsterdam. At present some are outside the city but the additional windmills within the city will generate the electricity for one third of the house holds, he said. The square, where a live, has a windy corner. So who knows what our Green Alderman will decide to do with his Teletubbies city. Moreover, our national Labour Party got a new leader (Diederik Samsom) who is a former Greenpeace activist. Usually I voted on that party but I have to keep an eye on them and will decide next what to do. Do these people read a minimum of literature?

    1. DirkH

      WIND TURBINES IN THE CITY??? Keep us informed, Mindert – if you find a simulation video of how that is supposed to look like, that would be great. Two words: Blade Throw. Oh, another two: Ice Throw.

      1. Bernd Felsche

        Have you seen the size of the excavations necessary for the footings of one of those behemoths? The amount of steel and concrete that goes into one is “staggering” for those unfamiliar with what it takes to keep a large, wind-loaded tower standing on soggy ground.

        I hope the Alderman enjoys his piles.

        1. DirkH

          They do have some slight problems keeping them vertical at the Borkum offshore windfarm. The bearings break when the whole thing deviates 5 degrees from the vertical. And they already have several dead ones.

          1. Ulrich Elkmann

            Matt Ridley in the title story of The Spectator, March 3, “The Winds of Change”:
            http://www.spectator.co.uk/essays/7684233/the-winds-of-change.thtml
            “I have it on good authority from a marine engineer that keeping wind turbines upright in the gravel, tides and storms of the North Sea for 25 years is a near hopeless quest, so the repair bill is going to be horrific and the output disappointing. Already the grouting in the foundations of hundreds of turbines off Kent, Denmark and the Dogger Bank has failed, necessitating costly repairs.”
            So this is still an off-the-record concern, and they are still trying to figure out how to present it as “alternativlos” without losing the believers.

          2. Joe

            By my estimate, the pilings would have to go down at least 1/5th of their height. At LEAST. This means perhaps 10-15m.
            That’s a lot of embedded (and uncounted) energy in them thar foundations…

  4. DirkH

    Spiegel in glowing terms about Osmosis power plants. (Green pseudoscientific complex keeps digging for ever lower energy density.) http://www.spiegel.de/wissenschaft/technik/0,1518,823820,00.html

    1. Bernd Felsche

      Osmosis? I thought that that was only useful for pre-exam nights at university. Put the book under your pillow and by the morning, you’ll know everything in the book.

      1. DirkH

        Osmosis power plants use the same principle and achieve the same quality of results.

  5. Ulrich Elkmann

    “Wind turbines in the city”: déjà vu, all over again:
    From Popular Science magazine, June 1932: “Skyscraper windmills”:
    http://www.popsci.com/environment/images/2010-11/skyscraper-windmills-june-1932
    http://www.hsu-hh.de/images/rz7B88ikVgFYUror.jpg

    For once, Der Spiegel sounds somewhat sceptical about Hermann Honnef’s 250-meter multirotor towers:
    http://www.spiegel.de/spiegel/print/d-44438924.html
    (well – that was in 1949). Title: “Alles gut befunden, gebt mir Geld” (has been approved – send money). “…beste Wasser- und Windverhältnisse….Wie er sie braucht, um die Wind-Elektrifizierung Deutschlands in die Wege zu leiten.” (the best wind conditions…as he needs them to bring about the wind-power electrification of Germany), “Schon vor ihm gab es Windkraftler in großer Menge. Sie scheiterten an der stets wechselnden Stärke des Windes und der ebenso wechselnden Stärke des Stromes.” (There were a lot of wind pioneers preceding him. They all were undone in by the fluctuating strength of the wind and the according shifts in power.) Plus ca change…

  6. Ric Werme

    > I guess there’s a lot we could learn from Prof. Weber.

    Maybe he’ll soon have time to teach us.

  7. Casper

    SCHON WIEDER POLENS SIEG!
    http://www.rechtslupe.de/verwaltungsrecht/umweltrecht/obergrenze-fuer-treibhausgasemissionszertifikate-340179

    “Die EU-Kommission darf den Mitgliedsstaaten keine Obergrenze für Treibhausgasemissionen vorschreiben. So hat jetzt der Gerichtshof der Europäischen Union bestätigt, dass die Kommission durch die Vorgabe einer Obergrenze für die Treibhausgasemissionszertifikate Polens und Estlands ihre Befugnisse überschritten hat.”

    1. DirkH

      Translation: European Court decides that the EU commission oversteps its competencies by dictating upper limits for Greenhouse gas certificates of Poland and Estland. Victory for Poland.

      Strange. I thought the court was better controlled… How could they have missed that?

      1. Casper

        Remember the wind of change comes always from Eastern Europe! 😉

        1. Joe

          That, and Soljanka. Retzept, my friends…: http://ausweis-bitte.blogspot.com/search?q=soljanka

  8. John Blake

    Paging Goethe: “Erlkonig hat mir was leides getan.”

  9. Nik

    You can fool all of the people some of the time…..

    no need to repeat old and tried advice, for most people, but some just never learn.

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