Siemens to Shut down Solar Power Unit

[OKIsItJustMe]

http://invezz.com/news/equities/3153-siemens-to-shut-down-solar-power-unit

[font face=Serif][font size=5]Siemens to Shut down Solar Power Unit[/font]
[font size=4]Siemens’ Share Price Little Changed in Early European Trading[/font]

by Alice Young, 10:07, June 18

[font size=3]Siemens AG (FRA:SIE, ETR:SIE, NYSE:SI) will close its solar power division after failing to find a buyer for it in a move highlighting the difficulties of the photovoltaic technology market. Siemens’ share price has edged down in early Frankfurt trading today, June 18. Yesterday, the stock closed more than one percent higher on the NYSE where it is listed as American Depository Receipts (ADRs).

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As Bloomberg reported yesterday, Munich-based Siemens was going to close the unit following losses of some €784 million (£667.5 million) since 2011. The newswire quoted Siemens’ spokesman Torsten Wolf as saying that the shutdown of the solar power division was going to affect about 280 workers at the company. The number of employees has already been reduced from 600 to 280, with most of them working in Israel. Wolf added that Siemens was going to complete several solar projects and that the closure would cost a “double-digit million-euro” sum.

Siemens acquired Israel’s Solel Solar Systems, which manufactures equipment for solar thermal power plants, in 2009 for $418 million (£266.6 million) as part of the company CEO Peter Loescher’s push into solar power, following Siemens’ expansion into wind power. The unit was put up for sale in October last year, with prices for photovoltaic technology declining due to weak demand. Wolf said that it had “become evident that, due to the increasingly difficult market situation, we will not find an investor for this business”. He added that the company had held negotiations with a number of interested parties but no agreement could be achieved.

Siemens’ chief financial officer Joe Kaeser told investors in January that the unit’s losses were likely to increase to almost €1 billion by the end of fiscal 2013.

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[wtmusic]

1. Another casualty of Germany's Energiewende boo-boo.

"Closing the unit is expected to cost Siemens tens of millions of euro. The number of employees had already been reduced from 600 to about 280, the company said. Most of these worked in Israel. Work on closing production facilities would begin immediately but some project-related activities would continue until 2014.

Siemens is one of a glut of German companies to have suffered losses after investing heavily in solar technology.

Bosch, the technology and car parts group, said in March that it would exit its solar activities because of fierce competition, steep losses and falling prices. Bosch sustained some €2.4bn in losses in solar technology since it entered the solar industry in 2008. "

http://www.ft.com/cms/s/0/9c3de418-d74f-11e2-8279-00144feab7de.html#axzz2WaH08Y7q

[dumbcat]

2. And another article.

http://www.renewableenergyworld.com/rea/news/article/2013/06/siemens-will-shut-solar-unit-on-1-billion-in-losses-since-2011?cmpid=SolarNL-Tuesday-June18-2013

Siemens’ solar operations offered solar-thermal power technology, whereby mirrors in so-called parabolic troughs focus sunlight on liquids to generate steam and power turbines.

The segment has been undermined by plummeting costs in the competing photovoltaic panel sector. Three years ago energy from the latter was 10 percent more expensive than solar-thermal, while now it is less than half as much, according to data compiled by Bloomberg New Energy Finance.

Siemens’ solar unit also struggled because of the perception in North Africa, one of the biggest markets for the industry, that the unit was an Israeli company, making it hard to do business there amid the region’s political tensions, according to a person familiar with the company’s strategy, who asked not to be named because of the matter’s sensitivity. Wolf declined to comment.

If a huge global company like Siemens can't survive an industry shakeout, what chances to the little guys have?

[FBaggins]

3. Siemens is surviving just fine

They're just shutting down a subsidiary that isn't doing well and has little prospect in the near future.

[dumbcat]

4. You're right. I worded that poorly.

I'm sure Siemens will survive. What I meant was that if a small company (subsidiary) backed by Siemens' massive resources and long term view doesn't survive the shakeout, it has got to be even harder for a small company or a startup without big financial backing to survive.

It seems that the problem was the company was working with CSP and solar thermal. Those two facets of the industry seem to be having a hard time competing with the rapidly dropping price of PV solar. I wonder if this is a temporary situation or a long term trend?

[Yo_Mama]

5. It's also the solar panel makers

They all seem to be losing money hand over fist.

The government supported ones will survive in India and China, and some Taiwanese and perhaps Korean subs with much lower operating costs will likely stay in.

I believe the Japanese will pick up because the Japanese will probably buy Japanese. '

There is still money in the business for installers, but the pure manufacturers seem to be in deep trouble around the world. Overcapacity.

[kristopher]

6. Yes, as the comments here imply, solar is clearly on it's last legs

Graph of the Day: Solar grid parity in 102 countries

By Giles Parkinson on 24 May 2013

Here’s an interesting graph used by Suntech’s Stuart Wenham (sourced from Applied Materials) during a presentation at the Solar 2013 conference in Melbourne on Thursday. It highlights the extent of “grid parity” for solar PV across the world – it is now in 102 countries.

This definition of “grid parity” is the cost of rooftop solar versus the cost of electricity sourced from the grid – this is sometimes known as “socket parity”. Most of the countries – though not all – are those with good solar resources and relatively high electricity pricesAustralia reached “socket parity” several years ago.

Wenham says that solar PV will fall a further 50 per cent in costs up to 2020 – see our story today. He says that solar PV at a utility level will also challenge fossil fuels – as it already does in those with high gas and diesel costs, and will offer the cheapest avenue to countries which have little electricity infrastructure.

http://reneweconomy.com.au/2013/graph-of-the-day-solar-grid-parity-in-102-countries-39133