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Siemens talking to buyers as it plots exit from solar sector
German industrial giant Siemens is to exit the solar industry and says it is in talks with potential buyers of its interests in the sector.
Siemens says it will now focus all of its renewable energy activities on wind and hydropower, which it expects to be the biggest contributors to growth.
The company had previously said that its concentrating solar power (CSP) activities were under review.
“Investments in this area, not just for us but for others, were not worthwhile,” said Siemens chief executive Peter Löscher in July while discussing the group’s financial third-quarter results.
Today Siemens says: “Due to the changed framework conditions, lower growth and strong price pressure in the solar markets, the company's expectations for its solar energy activities have not been met.
"The global market for concentrated solar power has shrunk from four gigawatts to slightly more than one gigawatt today. In this environment, specialised companies will be able to maximise their strengths."
The retreat from solar marks an abrupt about-turn from the confidence Siemens showed through two deals in 2009, when it bought CSP specialists Archimede of Italy and Israel's Solel.
Since then CSP's prospects have dimmed in the face of massive falls in equipment prices of PV, making the latter a more attractive option for many developers.
The German group has faced criticism that at $418m, it overpaid for the latter. By the fourth quarter of 2011 it had announced a $314m impairment charge after reviewing the value of its CSP operation.
It also plans to part company with its PV-related operations.
Siemens will continue to operate the two business units involved – Solar Thermal Energy and Photovoltaic – until a deal is concluded so “existing contractual obligations will currently not be affected”.
It will also carry on making equipment applicable to the CSP sector such as steam turbines as part of its wider energy-equipment business.
As part of the shake-up, the rest of Siemens' existing Solar & Hydro Division – its hydro and energy-storage operations – will continue as part of its Energy business, alongside Siemens Wind Power.
The Solar & Hydro Division generated revenue "in the low triple-digit millions" last financial year and has roughly 800 employees, about 200 of them in Germany.
"The importance of renewable energies in the global power mix will continue to grow and hydro power and wind energy will remain the major renewable contributors," Siemens says. "Our renewable energy activities will be focused on these two areas."
"We have established our company as the clear market leader for offshore wind power farms and we are also making very good progress in onshore business."