Meyer Burger: German photovoltaic company cancels plans for US and prepares restructuring

The industrial manufacturer, Meyer Burger, canceled his plans to build a large factory in the US. The announced production of solar cells in the state of Colorado Springs is currently not economically viable, the Swiss company announced today (26.8.2024). As a result, the share price of the photovoltaic group fell by almost 50% to less than 2.14 Swiss francs at the start of the transactions. From their high level in spring 2023, shares have lost 98% of their value. This move also reduces its announced profitability, according to the publication of Handelsblatt. Therefore, Meyer Burger simultaneously promotes a programme of restructuring and cost reduction. This will affect the Hohenstein – Ernsthal site in Saxony, as well as the facilities in Switzerland, the US and Asia, said a representative in a relevant question. Meyer Burger: Solar cells continue to come from Bitterfeld – Wolfen The expansion of photovoltaic plant production in the U.S. state of Arizona with 1.4 gigawatts will continue for now. However, this would initially increase “only to a capacity of 1.4 gigawatts instead of 2.1 gigawatts”, according to the representative. Solar cells for self-produced units will continue to come from the German plant in Bitterfeld – Wolfen. Meyer Burger has today postponed the announcement of its six-month size for the second time in a week and a half, for the end of September. The group is with its back against the wall financially. “Meyer Burger’s announcement shows that the company’s prospects are very difficult,” says Erkan Aycicek, an LBBW analyst. The extension to the USA was therefore the last solution for the plant manufacturer who has been making losses for years. The solar industry is fighting for its survival Meyer Burger’s CEO, Gunter Erfurt, asked Berlin for help. However, the German government was unable to reach an agreement and did not reach a solution either after intensive discussions. As a result, the last remaining plant producers in Germany, such as Meyer Burger, Solarwatt and Heckert Solar, announced closures, cuts and restructuring measures. The solar industry is not only fighting for its survival in Germany. Although demand for solar units is at record levels, the European photovoltaic industry is in crisis. Months ago, industry warned about the consequences of the rapid increase in the number of cheap units from China entering the European market. Within a year, solar market system prices have fallen from 30 minutes per watt to peak at 13 minutes, a drop of almost 56%. Even market leaders in China are now facing economic difficulties. No one can produce profitable at these prices. For pioneer Meyer Burger, the US was therefore an escape attempt. The company relied mainly on subsidies from the Inflation Reduction Act (IRA), but “in the US, investment costs for many goods have increased recently,” explains a representative. And planned tax credits totalling $1.4 billion have not been implemented in the expected amount. Meyer Burger wanted to get out of the red with a mix of grants, loans and capital increase. This would require funds totalling around 450 million Swiss francs. However, the company, which is based in Switzerland, failed to raise this amount. In the industry circles, Meyer Burger has long been considered threatened. By cancelling the production of cells in the US, the question now is how long the company can last. Reducing plant production in Goodyear could also be a problem. In addition, Meyer Burger already has market agreements for a large part of the planned capacity. The question now is whether they can be kept. The company keeps it open and writes that “existing long-term market agreements” can “probably be respected”. The initial situation in Germany has not changed, analyst Aycicek says. “The political environment has not substantially improved and there has been no sustainable market recovery so far”. Therefore, Meyer Burger ‘will have difficulty remaining competitive in the long term under current market conditions’, says the expert.