Strategic Shift for Solarwatt

In a pivotal move announced during a press conference, Solarwatt, a renowned player in the solar energy sector, has decided to halt its module and battery storage production at its Dresden facility. This decision, made in late 2023, reflects the pressing need for the company to adapt to the current economic landscape, primarily due to unsustainable production costs in Europe driven by intense pricing competition from China.

Conclusion of Local Production

Following the challenging market conditions, Solarwatt confirmed that it ceased manufacturing solar modules earlier in the year, with plans to wind down battery production by the end of 2024. The company will now rely on contract manufacturers in Asia for producing its solar products, including modules, batteries, and inverters, effectively marking a significant shift in its operational strategy.

Workforce Reduction

Aligned with the production closures, Solarwatt is also implementing substantial job cuts. By 2025, the workforce, which currently stands at 850 employees, is expected to be reduced to approximately 350, resulting in around 500 layoffs. The company cites the closure of its production facilities as a primary reason for these drastic measures, although it also anticipates further job losses across various departments.

Transition to Full-Service Provider

The new strategy positions Solarwatt as a comprehensive provider of private energy solutions under the “Solarwatt Home” brand. Customers can expect bundled offerings including photovoltaic (PV) systems equipped with battery storage and inverters, wall boxes for electric vehicles, heat pumps, and an energy management system to optimize production and consumption. This initiative includes collaborations with reputable partners, such as Stiebel Eltron for heat pumps and Kiwi Grid for energy management.

Market Challenges

Solarwatt's shift comes amid challenging economic conditions for the solar industry in Germany. The competition from affordable solar hardware sourced from overseas has put immense pressure on local manufacturers. The struggles faced by leading companies like Meyer Burger, which closed their significant European manufacturing site, further illustrate the difficulties within the sector. Reports have surfaced about multiple firms facing layoffs or even insolvency, including installation companies like Wegatech.

Experts suggest that the recent decline in demand for PV systems, particularly for installations under 30 kilowatts, highlights a broader issue in the market as new competitors flood the scene with over 5,000 new installation firms entering the market in the past few years. As the industry grapples with stagnation, falling market prices exacerbate the downward pressure on revenues.

This shift in Solarwatt's strategy not only signifies changes for the company but also reflects broader trends influencing the solar energy market in Europe.

Original Source - heise.de