The Swiss solar pioneer Meyer Burger has decided to keep its core solar cell production in Germany instead of relocating it to the USA due to cost concerns. This decision led to a sharp sell-off in the company’s stock.
The potential closure of Meyer Burger’s solar cell production in Saxony-Anhalt, Germany, has been averted. The company announced that the planned establishment of an alternative production site in the USA is currently not financially viable and has therefore been halted. Consequently, the production in Bitterfeld-Wolfen will continue to be necessary. “This is the good news to the bad,” said CEO Gunter Erfurt.
Earlier this year, Meyer Burger closed what it described as the largest solar module production facility in Saxony’s Freiberg, citing pressure from cheap Chinese imports to Europe as the reason. The industry had previously made unsuccessful appeals to the German government to support European manufacturers. The solar cell production in Bitterfeld-Wolfen was also under consideration for closure, with recent reports indicating it would be needed until 2025.
The strategic shift means lower financing requirements but also reduced profitability in the medium term, the company explained. In 2023, Meyer Burger reported a negative EBITDA of 164 million Swiss francs on a revenue of 135 million francs, compared to a negative EBITDA of 34.6 million francs the previous year. The board has decided to implement a restructuring and cost-cutting program, though details have not been disclosed.
Meyer Burger’s stock, already in deficit, plummeted to a record low following the announcement. In June, management had reported “significant progress” on its plans, raising investor hopes for a return to profitability. However, the sudden reversal drove shareholders away, with the stock dropping by up to 55.5% to an all-time low of 1.82 francs. Since July 2023, the shares have been on a nearly continuous downward trajectory, losing about 95% of their value from the January peak of 49.51 francs per share.
Germany remains the most economical option
Erfurt mentioned that the company had planned to scale down the German plant as soon as production in the USA ramped up. “That’s now off the table.” The financial challenges of establishing solar cell production in the USA stemmed in part from rising costs for materials needed to refurbish a factory.
The Saxony-Anhalt plant, with its 350 employees, will continue to be the “backbone” of Meyer Burger’s solar cell supply, providing modules for the company’s production facility in Arizona, USA. This is currently the most economical option, the Swiss company announced. The module production in Arizona has a capacity of 1.4 gigawatts, which can be fully supplied by Bitterfeld-Wolfen.
US takes tougher stance against Asia
Erfurt explained that new regulations in the USA have made it more lucrative to import solar cells for module production. Logistics costs for cells are also relatively low. Additionally, the USA has significantly more restrictions and tariffs on imports from Asia. “The general price level in the USA is therefore relatively healthy compared to Europe. That’s why it works,” he said.
