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Is Meyer Burger closing down solar production in Saxony?

The solar technology group Meyer-Burger is demanding state aid in the price competition with China. The factory in Freiberg, formerly Solarworld, is once again threatened with closure.

Reading time: 4 Minutes

Man sieht die größte Solarmodulfabrik Europas - Meyer-Burger von Außen
Europe's largest solar module factory is located in Freiberg - but the Meyer Burger Group has announced that it will close if state aid is not provided quickly. © PR/Meyer Burger

By Georg Moeritz

Freiberg. Five-week deadline for the federal government: The Solar technology manufacturer Meyer-Burger with 500 employees in its largest factory in Freiberg calls for state aid for the industry. If Berlin does not decide to provide the necessary support by the second half of February, the Saxon site will be closed. Meyer-Burger only reopened the former Solarworld factory in 2021 after the company went bankrupt.

Group CEO Gunter Erfurt informed the stock exchange, staff and press about his ultimatum on Wednesday: "We are not threatening anyone, we are simply saying what the phase is." Meyer-Burger is currently losing money in Freiberg. The company is now expecting a loss this year instead of the profit it had hoped for. The current losses are unsustainable, it says in the press release. The share price of the Swiss group with a total of 1,500 employees has fallen sharply since the summer.

Erfurt again cited the fact that Chinese modules were being offered too cheaply in Europe as the main reason for Meyer-Burger's difficulties. Ten years ago, Asian competition led to the bankruptcy of many solar module factories, with only three remaining in Saxony. According to Meyer-Burger, "production overcapacity" in China increased again last year. Because the USA put the brakes on imports of Chinese goods, more solar technology was pushed into Europe.

Bitterfeld-Wolfen and Hohenstein-Ernstthal continue to work

The Meyer-Burger Group still has two sites in eastern Germany, which are not at risk according to Erfurt: In Hohenstein-Ernstthal, formerly the headquarters of the predecessor company Roth & Rau, around 130 people work in development and mechanical engineering. In Bitterfeld-Wolfen in Saxony-Anhalt, solar cells are produced from silicon, which are then combined into photovoltaic modules in Freiberg. According to Erfurt, this solar cell production is even to be increased - for export to the new module factory in Goodyear in the US state of Arizona. "We are investing like crazy in the USA," said Erfurt. Demand is high.

The CEO emphasized that US economic policy promotes domestic production. It is therefore not worth exporting Freiberg products to the USA. The stock in Freiberg has grown to modules with a capacity of 360 megawatts. Last year, the factory produced 650 megawatts. However, 1.35 and later 1.0 to 1.2 gigawatts were announced for the year. But Meyer-Burger reported difficulties in ramping up production, sometimes due to corona, sometimes due to gaps at suppliers.

No short-time working at Meyer-Burger in Freiberg

However, there is no short-time working in Freiberg, nor is it planned. "We either work full throttle or not at all," said Erfurt when asked. Solar technology is assembled in Freiberg in three shifts, seven days a week.

If the decision on the desired state aid is made, the Group will "happily devote itself to developing new capacities". Meyer-Burger had already spoken of 3,500 jobs in the Group in 2027. The figure is now 1,500, 1,000 of which will be in production in eastern Germany. There are plans to create 500 jobs in Arizona and more than 350 in a new solar cell factory in the US state of Colorado. Erfurt said that the Group was looking for new industrial partners and had commissioned an investment bank to support its strategy.

Man sieht Gunter Erfurt, Vorstandschef von Meyer Burger.
Gunter Erfurt, CEO of Meyer Burger, expects state aid for the European solar industry - otherwise he will close the Freiberg plant and concentrate on the USA.
© Archive photo: Arvid Müller

The Swiss company is calling on the German government to take "measures to create fair competitive conditions in Europe". Erfurt said that the industry was currently being "thrown under the bus by Chinese trade". However, tariffs or trade barriers against China are the wrong approach. The industry is dependent on cooperation with China. The Saxon manufacturer Solarwatt for example, only produces part of its modules in DresdenThe majority is imported from China. Solarwatt cut 85 jobs in Dresden at the end of last year. Managing Director Detlef Neuhaus also complained at the time about disadvantages compared to China and the USA.

Demand: More money for electricity from domestic technology

Through their association in Berlin, the manufacturers have called for solar modules from European production to be promoted with a "resilience concept". Anyone who buys these certified modules should be rewarded with more money for the electricity generated. The feed-in tariff should be increased by 2.5 to 3.5 cents per kilowatt hour of electricity, depending on the type of system.

The necessary glass would then continue to come from Brandenburg, silicon from Bavaria and the assembled modules from Saxony. In the first year, this subsidy will cost around 50 million euros, said Erfurt. That is little compared to other subsidies.

Saxony's state government responded with a joint statement by Minister President Michael Kretschmer (CDU), Energy Minister Wolfram Günther (Greens) and Economics Minister Martin Dulig (SPD). Kretschmer recalled that the state government had been lobbying the federal and state governments for months to save the industry, including with a solar summit. However, the solar package announced by the federal government has still not materialized.

Economics Minister Dulig said: "Without state aid, the solar industry in Germany will be shut down for good." The German government must now come to an agreement without delay. Strategic political support is necessary in order to avoid becoming "completely dependent on China".

Greens call on Federal Finance Minister to release money

Günther and Green MP Bernhard Herrmann called on the FDP-led Federal Ministry of Finance to release the money. "The instruments are known, they need to be financed," wrote Günther. The EU must also act. The Saxon and Central German solar industry is a crucial building block for the ramp-up of production in the EU.

Nico Brünler, member of the state parliament for the Left Party, also called for the "bonus payments proposed by the Federal Ministry of Economics" to protect against cheap Chinese competition. Brünler wrote that Germany used to have a world-leading solar industry. However, CDU-led governments had overturned the subsidies and weakened the industry. In Germany, it was mainly Chinese solar panels that were being installed. Saxony's CDU General Secretary Alexander Dierks, on the other hand, wrote that it was the traffic light government that was damaging competitiveness with the wrong priorities and wrong decisions. It is "simply more attractive for companies to move out of Germany".

The European Union wants to respond to the US economic stimulus program with a "Net-Zero Industry Act" (NZIA). According to the EU plans, the European share of photovoltaic systems should be 45% by 2030. The plan also sets targets for other "key technologies", including heat pumps, battery cells and electrolysers. However, Meyer Burger CEO Erfurt fears that China will outperform the EU in other sectors: wind turbines and car production.

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