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Siemens Shutters Solar Sector


Ain’t no sunshine when Siemens is gone: The massive German multinational is getting out of the solar business after posting a loss of more than $1 billion in its two years of operation. The engineering company is a world leader in wind turbine development, but its foray into solar production has been a massive flop.

Siemens’ failure wasn’t due to a lack of innovation. Rather than producing solar energy the conventional way, using photovoltaics, the firm produced solar-thermal power, using mirrors to focus sunlight on tubes of water, and using the resulting steam to power turbines. Bloomberg reports on what went wrong:

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.

Cheap Chinese photovoltaic panels drove Siemens’ more expensive solar option out of business. But those Chinese panels are riddled with defects, and the companies that produce them are going under as well. Germany is considering rolling back its government support of its solar industry, a step Spain has already taken. Failure begets failure in the solar industry.

Despite years of favorable treatment from governments around the world, solar still can’t compete with oil, gas, or coal on the open market. Governments would be better served investing in the research and development of solar technology rather than propping up firms putting out an inferior product. Anything else is just wasting daylight.

[Broken solar panel image courtesy of Getty Images]

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  • foobarista

    An aside: this was the same technical approach used by Solyndra. There was a spike in the cost of silicon a few years ago that made this approach seem promising, but what some thought was a permanent change in the price turned out to be a temporary spike. After the silicon price returned to earth, and after Chinese subsidies, the hot water approach couldn’t compete financially.

  • hammad

    Thanks for sharing such informative stuff system

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