June 17, 2013 4:38 pm

Siemens to close lossmaking solar power unit

Siemens will close its lossmaking solar unit after failing to find a buyer, underscoring the difficulties of making money in the volatile solar technology market.

Siemens announced in October that altered regulatory conditions, lower growth and strong price pressure in the solar markets meant the company’s expectations for its solar energy activities had not been met and it therefore planned to dispose of the unit .

However, negotiations with interested parties proved difficult and in May the Munich-based company was forced to reclassify the unit in its accounts to reflect the dwindling chances of a sale.

Joe Kaeser, chief financial officer, told investors In January that, in total, the solar unit’s losses and writedowns had cost Siemens roughly €850m: by the end of fiscal 2013 that figure is likely to increase to almost €1bn.

Siemens acquired Israel’s Solel Solar, which makes equipment for solar thermal power plants, for $418m in 2009.

Closing the unit is expected to cost Siemens tens of millions of euro. The number of employees had already been reduced from 600 to about 280, the company said. Most of these worked in Israel. Work on closing production facilities would begin immediately but some project-related activities would continue until 2014.

Siemens is one of a glut of German companies to have suffered losses after investing heavily in solar technology.

Bosch, the technology and car parts group, said in March that it would exit its solar activities because of fierce competition, steep losses and falling prices. Bosch sustained some €2.4bn in losses in solar technology since it entered the solar industry in 2008.

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