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Sovello stops production

August 21, 2012

Another German solar module maker, Sovello, has fallen victim to fierce global competition. Insolvency adminstrators say the firm based in eastern Germany's "solar valley" will stop production within the next two weeks.

Workers in a production unit of solar module maker Sovello
Image: picture-alliance/dpa

The German solar-cell company Sovello announced on Tuesday it would have to end production at the end of August. The company which filed for insolvency in May said it would be forced to lay off its 1,000 employees.

Its insolvency administrator Lucas Flöther told the German news agency DPA that production facilities would be put into stand-by mode for the time being. "The financial situation of our company unfortunately requires such a move," Flöther said in a statement.

Lack of financing also meant that an earlier plan to create an alternative employment unit for at least 500 workers and make a new start with the rest of the staff had failed.

"For the employees it is an existential catastrophe," said Erhard Koppitz, who heads the regional branch of the trade union for the mining, chemicals and energy workers, the BCE.

Renewables sector in crisis

Sovello's case is the most recent example of Germany's solar industry being in a deep crisis. Strong competition from Chinese solar module makers and a tangible cut in German federal subsidies for the industry have been cited as the two main reasons for the continuing slump in the sector.

New investors for insolvent firms are hard to find, even in the case of Sovello which has had a unique selling point in making extremely energy-efficient panels.

Sovello is a spin-off of Germany's insolvent Q-Cells and is located in what became known as "Solar Valley" near the city of Halle in the Bitterfeld-Wolfen district of the eastern German state of Saxony-Anhalt. In recent decades, it had been Europe's largest center of solar technology.

hg/ipj (AFP, dpa)