The pandemic has dealt a blow to the Germany's solar PV equipment manufacturing industry that currently depends on Asia, especially China as a major contributor to its sales. However, VDMA believes there is an opportunity to be grabbed here as it strengthens the sentiment of encouraging European solar production on large scale. (Photo Credit: VDMA)
- VDMA says Q4/2019 for German PV equipment makers was a tough one as incoming orders dropped by over 50% on sequential basis
- For Q1/2020 the industry isn’t too hopeful thanks to the pandemic bringing down their incoming orders to 50% less than in Q4/2019
- It sees orders from China, the US and Europe collapsing due to the pandemic
- Industry is now expecting demand for local large scale manufacturing for solar to gain ground
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In Q4/2019, German solar PV equipment makers saw their incoming orders declining by more than 50% compared to the previous quarter, and in Q1/2020, they expect sales to be 50% less than previous quarter. Pointing to this gloomy mood, German Engineering Federation VDMA observes, “Although the photovoltaic industry is used to fluctuations from the past few years, it does not look as if PV equipment manufacturers will be able to recover from this slump in the near future due to the current situation with regard to the COVID-19 pandemic.”
Sales of cell production equipment in Q4/2019 increased by 9% points compared with Q3/2019. Overall, in 2019 sales of cell equipment was 43% but it was thin film equipment that continued its run at the top spot with highest sales of 53%, as in 2018.
German companies sold 97% of their products to clients beyond borders and China continues to be a big market for them. Due to the pandemic, they experienced interruptions in supply chains as well as production losses due to their dependence on the Chinese market as a big market for their products.
This will continue to reflect in their business including the entire mechanical engineering industry, said VDMA as it sees Chinese orders collapsing in the PV sector, not to miss lack of orders from the US and other European nations, all due to the coronavirus crisis.
VDMA has not lost hope though of the European equipment industry’s revival as talks of setting up large scale solar production capacity in Europe are gaining strength (see European Nations Pitch For Local RE Manufacturing).
“The investments of the German government and the German mechanical engineering industry in the development of advanced cell manufacturing processes for bifacial and high-performance products are paying off. This successful path must be pursued further. The obvious global dependence on Chinese PV production also offers opportunities for the German mechanical engineering industry,” said Dr Peter Fath, Managing Director of RCT Solutions and Chairman of the Executive Board of VDMA Photovoltaic Equipment Production Equipment.
Sensing an opportunity for the industry in the wake of the pandemic, Dr Fath added, “Since the outbreak of the Covid-19 pandemic, German PV engineering has seen a a significant increase in inquiries for the global construction of solar factories. Local production to break the dependency on China is a worldwide trend and offers excellent export opportunities for our PV machinery manufacturing. German machines run stable and are easier to keep in operation compared to Chinese competitive products. Also, the establishment of a large production capacity in Europe is now again on everyone’s lips and the VDMA is strongly involved.”