German Solar Industry - Financial Ruin Predicted

The German solar industry has experienced great sales in recent years but analysts say the success is over. It seems that foreign countries are taking business away from German suppliers of solar cells and panels.

Much of the demand for solar panels came from within Germany, as people were ordering them to install on their rooftops to supplement their energy supply. But now those orders are being filled by manufacturers in Asia, and at a lower price.

Chinese suppliers like Suntech Power, Yingli Solar or Trina Solar are benefiting from the demand from the German market. In the last two years, the solar panel market share of Chinese companies has risen from almost nothing to 30 percent. Taiwan, South Korea and India are also getting a piece of the action as well.

Thanks to lower labour costs, UBS estimated that the solar panels being sold by Asian companies have price tags two-thirds that of one created by a German company.

Logically, foreign competition will put pressure on German companies to reduce prices which they will probably do if they want to stay in business.