Frank Asbeck The Sun King Shines

The boss of Solarworld, Germany’s biggest solar panel maker, is proud of having fought for restrictions on Chinese solar modules in Europe, a move that may have saved his firm.
Europe is losing out to Asia in the global solar market.

It's raining. Frank Asbeck is not in the best of moods. You can't see the famous view from his office in Bonn, a glass palace on the Rhine.

But the 56-year-old wouldn't be the “Sun King” if he didn't turn the bad weather into an opportunity for a little self-promotion and a jab at the government in Berlin.

“Most politicians still believe that if there's no sun you don't generate power,” Mr. Asbeck said, explaining how solar modules actually generate a similar amount of electricity on days when there's little sun.

Mr. Asbeck, a passionate hunter who drives a Maserati and owns a castle, made a name for himself in 2013 when he brought in Qatari investors to save his firm and successfully lobbied for import duties and minimum prices in the United States and Europe.

 

Handelsblatt: Mr. Asbeck, have you dug the grave of the German solar industry?

Mr. Asbeck: You’ve thought up a nice fairy tale there – from sun king to grave digger. How do you come up with this nonsense?

You helped implement custom duties and minimum prices on Chinese solar panels. That was good for your own business, but it has strangled the broader boom in the solar industry.

Wrong! Dumping [exporting goods at a price lower than their normal value] is the reason why the German market has shrunk to less than a quarter of its previous size.

How so?

Chinese manufacturers, with the help of state loans, brought their panels to Europe with prices well under the manufacturing cost. This gave rise to a giant bubble and the policymakers felt compelled to abruptly cap their support. Then came the bust.

I certainly have not dug the grave of the German solar industry. If anything, I've dug the grave of unfair trade policies, and the monopolization of technology in the hands of a state-run economy. Chinese dumping destroyed more than 10,000 jobs in Germany's solar industry. I'm proud that we've been able to check this development.

 

Quelle: dpa
</a> Frank Asbeck, founder and CEO of Solarworld, has been at the forefront of the German solar business.
(Source: dpa)

 

You're very much alone in your position. German companies such as utility EnBW, conglomerate Baywa or chemicals firms Wacker Chemie are demanding the immediate abolition of minimum prices. Even the European solar association, Solarpower Europe, has spoken out in favor of ending these measures. Why should the European Commission follow your arguments and extend the price floors, which are set to expire in December?

It's very simple: The European Commission, through extensive investigations, has concluded that the Chinese are engaged in massive dumping. To this day, nothing has changed in that regard. In order to compensate for this anti-competitive behavior, the European Union has introduced anti-dumping measures.

This is about upholding the rule of law. Period. Incidentally, the United States has much tougher customs duties. And the market there is booming right now at an enormous rate. This contradicts the theory that upholding fair competition leads to a collapse in demand.

What are the Americans doing better in comparison?

The United States clearly says: ‘Whoever cheats is out.’ There are tough customs duties. And in contrast to Germany, politicians don't talk down photovoltaic energy. Rather, they see it as a chance to become independent from energy imports. Autonomous electricity production is politically desirable there and isn't burdened with a fee as in Germany.

Currently, you make more than half of your sales in the United States. Aren't you repeating exactly the same mistake that nearly drove Solarworld to bankruptcy – being too dependent on a single market? Once it was Germany, now it's the United States.

I can certainly bear the fact that we're well represented in a prospering market. But we are also well diversified.

Your problem is that growth in the United States has an expiration date. In 2017, the 30 percent tax credit for solar panels ends.

Let's wait and see! Anyone who's listened to President Barack Obama's ambitious statements on reducing CO2 and fighting climate change knows how serious the United States is about expanding renewable energy.

 

Europe Falls Behind in Solar Energy-01



 

So you're banking on policymakers planning for the long term when it comes to state support? That's brave of you.

If there are abrupt reductions in state support, as we have seen recently in Great Britain, then we will have to deal with it. But in the end, the photovoltaic train cannot be stopped. The technological progress has come so far that you can have it for very cheap prices.

It still cannot succeed without subsidies.

Renewable energy receives state support because it has to compete with energy providers that have been subsidized for decades and still are today. The entire energy system has to be transformed because it's tailored entirely to fossil fuels.

Solar electricity in Germany is today at the same price point as electricity from gas turbine plants. In Saudi Arabia and the entire Sub-Saharan region photovoltaic is already the cheapest energy source by a wide margin. But yes, in Alaska there will clearly still be a need for state support.

When will solar power succeed without subsidies?

The unbelievable growth rate of solar installations by 30 percent annually is not driven by subsidies alone. I estimate that for half of all newly installed solar power, people don't receive a subsidy at all. But it's also clear that the branch must be able to pay for its own costs.

State-financed dumping from China is not the model. Rather, it's a price that covers the actual costs for production, materials, work and research. As the technology advances, prices will fall. Solarworld, as the premium manufacturer and innovation leader, is at the forefront.

 

Video: A history of SolarWorld's U.S. operations.

 

With a bulk product such as solar panels, there's only a marginal difference between what's considered premium and cheap. One panel may offer 1 or 2 percent more efficiency, another a three- or four-year longer shelf life.

There's a huge difference between a Solarworld module and a product made in China for dumping. Both look similar because they're encased in a frame and glass. But the devil is in the detail. This is high technology. Our panels are unbreakable. A storm won't blow them from the roof, and hail has got nothing on them.

A Solarworld panel must last for 30 years or more in all weather conditions. And a 2 percent difference in efficiency results in a 10 percent higher yield. If the panel lasts 10 years longer than cheap products from the Far East, then there's a 50 percent higher yield over the life of the product. That's certainly not nothing! This is why we can ask for a cent or two more and become profitable again this year. We have a wonderful turnaround story – the restructuring has succeeded.

Succeeded? You had 25 million in losses in the first half of the year, your equity has shrunk to five percent. And you haven't managed to re-finance yourself from daily business proceeds.

The worst crisis in the solar industry is behind us. A large number of our competitors didn't survive. We will demonstrate positive earnings this year before tax and interest. And we're investing in new machines and jobs. That's a turnaround.

What happens if you don't make it in the black this year?

There's no question. We'll make it.

 

095 Solarworld-WTB 2014 resume

 

Franz Hubik reports on renewable energies for Handelsblatt. To contact the author: [email protected]