SolarWorld, Germany’s largest but financially struggling solar firm, has approved restructuring efforts and paved the way for acquisition of a large stake in the company by Qatar Solar.
Under the comprehensive restructuring plan, Qatar Solar will acquire a 29 percent stake in the debt-laden firm, helping it to avert an imminent collapse. SolarWorld AG founder Frank Asbeck will invest 10 million euros of private funds in the firm. His holding in the company would decrease from 27.84 percent to 19.5 percent.
SolarWorld, once a major player in the global solar industry, has in recent years incurred running losses of several billion euros.
The losses were driven by the both the removal of government renewable energy FiT (Feed in Tariff) subsidies within Germany, and the dramatic fall in solar panel prices since China entered the global solar panel market back in 2010. Although SolarWorld continued to increase production capacity, it could not attract enough market demand for solar panels.
Chinese panel manufacturers have focused on supplying solar power plant packages to suit average installations and average conditions at a much lower price, thereby removing that part of the market from the SolarWorld portfolio.
The SolarWorld solar panel and solar power plant system can be considered the Mercedes Benz of the solar power world — and there is certainly a market for extra high quality solar power plants especially in regions which face hostile weather conditions. Such systems are referred to as high performance solar installations, which is SolarWorld’s forte. Their robust engineering and construction methods will be vital as SolarWorld bids for and c0nstructs utility-scale power plants throughout the Middle East and Africa and delivers solar systems to residential and commercial purchasers.
The use of renewable energy holds great promise in Middle East. Most of the Arab countries are making determined efforts to reduce their reliance on oil and gas, and explore alternative sources for domestic energy production — thereby freeing up that oil and gas for export.
New projects, worth an estimated combined USD 6.8 billion, are being launched to boost solar power across the Middle East. A total of ten projects, based in the UAE, Kuwait, Oman, Egypt, Jordan and Morocco, will harness the enormous potential offered by solar power. Several investors have already expressed their interest in these projects.
In 2014, Qatar is expected to announce a tender for 1,800 megawatt solar energy plant, costing around USD 10-20 billion. Upon completion, electrical output from this project will make up about 16 percent of the country’s total production by 2018. Saudi Arabia is also on the lookout for investment in its USD 109 billion solar energy program, which will provide a third of KSA’s electricity needs by 2032.