Eastern Germany Hit Hard by Decline of Solar

http://www.spiegel.de/international/business/0,1518,830188,00.html


The sun, it was said, was going to save Frankfurt an der Oder, a city of 60,000 on the Polish border. After years of post-reunification economic doldrums, whose nadir came with the 2003 failure of a much-ballyhooed microchip factory project, the burgeoning German solar industry took an interest in the down-on-its-luck city.

In 2006, solar-panel manufacturer Conergy moved into the never-used computer chip factory, joining Odersun, already headquartered in the city. In 2007, the United States solar giant First Solar opened a factory as well, followed by a second one last year.
Now, though, the future suddenly looks decidedly dark. Odersun declared bankruptcy in March and Conergy, while pledging to return to profit this year, has seen its share price lose 99.6 percent of its value in the last five years. Many doubt the company will survive. Worst of all, however, was the announcement earlier this month that First Solar was closing both of its factories in Frankfurt an der Oder; 1,200 people will soon be jobless as a result.

"We saw the solar industry as a chance to reindustrialize the region and invested significantly in incentives," Frankfurt an der Oder Mayor Martin Wilke told SPIEGEL ONLINE. "This is a serious setback. It is a very difficult situation."

Frankfurt an der Oder's pain is far from an isolated case. The solar industry, once a beacon of hope for an eastern German economy that struggled for years to revive following reunification in 1990, is undergoing a brutal phase of consolidation. There is a massive surplus of global production capacity and the bad news for eastern Germany keeps getting worse. Last December, the Berlin company Solon, which employed hundreds in the Baltic Sea coast town of Greifswald, filed for bankruptcy. Aleo-Solar, based in Prenzlau north of Berlin, lost over €30 million (about $40 million) last year after turning a profit of €31.8 million in 2010, leading many to fear for their jobs there.