Germany’s residential solar panel industry is facing a lot of distress after a collapse in consumer demand triggered a wave of bankruptcies and lay-offs in Europe’s biggest and most important market for the sector. Many companies distributing and installing rooftop panels have gone bust, been taken over or forced to adopt changes in strategy.
While the bust and resulting glut of panels have led to a sharp fall in prices for consumers, industry figures warn that they have hit sentiment among investors and are threatening to damage a sector that is crucial to meeting Europe’s ambitious climate targets. Dries Acke, deputy chief executive of industry lobby group SolarPower Europe, described the situation as “not a positive trend”. “To some extent this is consolidation after a few exceptional years,” he said. But he added: “You cannot have a green transition with red numbers. The sector needs to be profitable.” Demand for photovoltaic panels in Germany boomed in the wake of Russia’s full-scale invasion of Ukraine in 2022, as consumers confronted with soaring energy bills turned to solar power. Manufacturers and distributors grew rapidly, increasing production and distribution capacity, hiring staff and training installers. Germany installed 15 gigawatts of solar capacity in 2023, according to SolarPower Europe — up from 7.4GW the previous year and a record for any European country. Solar start-ups in Germany “were expecting the double-digit growth rate to continue and for each of them to individually capture a significant market share”, said Dina Darshini, who heads LCP Delta’s solar and battery division. “But actually, the opposite has happened — the market has shrunk in 2024, there are more players, and everyone is trying to vie for a smaller market.” The drop raises questions about Germany’s target of installing 19GW of new solar capacity per year between now and 2030 as part of a drive for Europe’s biggest economy to be carbon-neutral by 2045
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