Interview with SMA boss: Solar industry is experiencing "unprecedented boom"

The solar industry is on the upswing, also in Germany.

Interview with SMA boss: Solar industry is experiencing "unprecedented boom"

The solar industry is on the upswing, also in Germany. The Hessian solar technology group SMA Solar is even building a new factory in Hesse. In the podcast "The hour zero", SMA boss Jürgen Reinert is optimistic that Germany can quadruple its solar park.

It was long declared dead, solar energy in Germany - but the situation in the industry has changed for some time. Lower costs, greater awareness of climate change and ambitious political expansion targets have spurred the industry on. The energy crisis, exacerbated by Russia's attack on Ukraine, has added momentum. "Our customers and employees say: They haven't experienced anything like this in the past ten years," reported Jürgen Reinert, head of SMA Solar, in the podcast "The hour zero".

The industry is experiencing an "unprecedented boom". There were years before, between 2005 and 2010, when things only went up for companies like SMA Solar, in some years sales doubled. The company, founded in Kassel in 1981, was the world market leader for inverters, a central control component for photovoltaic systems. Sales peaked at 1.9 billion euros.

However, due to strong competition from China and falling subsidies, the German solar industry went downhill. Q-Cells, Solarworld, Conergy, which conquered the world market after the turn of the millennium, went bankrupt or were swallowed up. Thousands of jobs disappeared. SMA also had to make massive job cuts in 2015, around half of the workforce in Germany, and sales halved.

Last year, SMA Solar generated sales of 984 million euros with 3,500 employees. The high demand is not yet reflected in all figures, even if the order books in Kassel are full. "We could clearly produce two or three times as much," says Reinert. But you are "still at the level of the last two years and therefore only just profitable". SMA now sees itself as a system provider that sells complete solar solutions. This conversion costs time, the price pressure remains high in the meantime. In order to give the German photovoltaics industry a boost, said Reinert, "a lever" is needed.

For further growth, the solar technology group is investing at its location in the northern Hessian Niestetal - SMA is building a new factory. As a result, production capacity can be almost doubled by 2024. The start of construction is planned for the end of the year, 200 jobs will be created. With the investment, SMA Solar wants to secure supply chains and gain greater independence. "We are currently talking very strongly about dependence on Russian gas and oil," said Reinert. "But the solar industry in Europe is 90 percent dependent on China." The traffic light coalition had announced ambitious expansion goals for renewable energies at the start - and sharpened them again in the spring.

Installed capacity is expected to quadruple by 2030, from 54 to around 215 gigawatts. Experts estimate that up to 15 billion euros per year could flow into the market. This is a boost for the industry: for manufacturers of solar cells and modules, project developers and system operators, but also craftsmen. Other manufacturers such as Meyer Burger are also investing in Bitterfeld and Freiberg in Saxony. Around five gigawatts (GW) are currently being added each year, and Germany has to come up with around 20 GW.

Is such a large expansion even possible? SMA boss Reinert is optimistic. Such a ramp-up is “in principle not a problem”. "Photovoltaics are easy to install." There are of course hurdles such as training installers, availability of resources and fast approval processes. But technologically it is feasible. Since the start of the traffic light government, the industry has been in a "much better dialogue" - which has been intensified by Russia's war. The government listens, is pragmatic and solution-oriented.

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