Germany's solar woes dim the promise of green jobs

It has been a rough year for Germany's solar panel manufacturers. Hailed not long ago as a promising new sector ripe with job opportunities, the industry is now seeing its biggest players succumb to over-production and stiff competition from Asian firms.

“It is fair to say that the industry is in a crisis,” says Gerhard Stryi-Hipp, director of energy policy research at the Fraunhofer Institute for Solar Energy Systems.

The latest casualty of the downturn is Q-Cells SE, once one of the world's leading producers of photovoltaic cells. Faced with mounting losses amid record-low prices for solar cells, the company from Bitterfeld-Wolfen filed for bankruptcy protection last week.

Leaders in both Germany and the US have touted green jobs as a growing source of high-paying, difficult-to-outsource jobs of the 21st century. But while the majority of new jobs in Germany are tied to renewable energy now, the solar industry slowdown indicates that green job gains might be short-lived and subject to the same pressures from Asia as other industries.

A March study for the Federal Environment Ministry estimates that solar installations created 110,000 new jobs last year – almost the same number as in 2010, putting the growth trend near zero for the first time in the young industry's history. 

Once built, solar power plants require little maintenance and don't provide much long-term employment. “As long as the market is growing, solar installations will create new jobs,” says Mr. Stryi-Hipp. But “the solar manufacturing sector has already passed its zenith and will be adding fewer and fewer jobs” in years to come.

Until recently, German solar firms expected growing exports to sustain the job growth of years past. But as their profit margins grew thin, they started to send jobs abroad. “We see now that exports have only a limited effect on domestic employment,” says Stryi-Hipp, “as companies set up international production sites in an effort to become more efficient.”

The troubled solar sector notwithstanding, green industries remain the biggest job creator as Germany works towards its goal of getting 35 percent of its energy from renewable sources by 2020 and a whopping 80 percent by 2050. The March study estimates that all renewable energy sectors combined created 370,000 jobs last year – more than half of the almost 550,000 new jobs the German economy added as a whole that year, according to official statistics.

In the future, jobs are likely to shift from the narrow field of photovoltaic energy to the myriad industries involved in the overall transformation of Germany's energy economy.

“We're going to see a lot of jobs in the markets for wind and biomass,” Stryi-Hipp predicts, “as well as industries that are indirectly related to renewable energy, things like electrical grids, battery storage, heating, or building maintenance.”

The solar bubble

For now, the assembly lines at Q-Cells will keep running until June, and paychecks will keep coming for 1,300 employees in Germany as well as 900 more at the company's branch in Malaysia. After that, it is anyone's guess how many people will lose their jobs in the company's restructuring.

It is the fourth insolvency in less than a year to come out of the heartland of Germany's solar industry, a region aptly dubbed "Solar Valley.” Q-Cells joins the ranks of former industry heavyweights SolarHybrid AG, Solar Millenium AG, and Solon SE, failed companies that employ another 1,200 people – engineers, administrators, and factory workers whose jobs now hang in the balance.

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