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The Week in Germany: Focus on Saxony
	Today, TWIG begins a multi-week look at the Free State of Saxony. With the reopening of the baroque treasure trove the Grünes Gewölbe and Dresden's 800 year celebrations, Saxony's past has received a great deal of attention this summer. This week, however, we will focus on Saxony's role as an emerging center for research and technology. With one of the most vibrant economies among the new German states, Saxony has attracted investment from companies like BMW, VW, Porsche, and the high-tech firms AMD and Infineon.

September 15, 2006

Dresden Hosts European Solar Energy Conference

Researchers, industry representatives, and politicians attended the 21st European Solar Energy conference at the Dresden Convention Center from September 4 - 8. The agenda focused on positive developments in the solar energy market over the last year and the strategy for growth over the coming decades.

This solar locomotive offered sun-powered tours of Dresden's Baroque Center during the conference. (dpa)

Global solar power generation is expected to increase by 25 percent this year, attendees were told in the opening session. More juice at power outlets means more revenues for the industry, which has enjoyed a 40 percent annual growth rate in recent years, according to Dr. Winfried Hoffmann, president of the European Photovoltaic Industry Association (EPIA), which hosted the conference.

Industry experts see an equally sunny outlook for the coming decades. The EPIA predicts that 25% of electricity consumed worldwide will come from solar power by 2040.

The industry will reduce costs but needs government support

The achievement of this objective is dependent on a few key factors, however. Dr. Hoffmann told attendees that government subsidy programs, such as Germany’s Renewable Energies Act, will be critical if solar power is really going to provide a quarter of the world’s energy needs some day.

Another key hurdle is price: Anton Miller, Chairman of the German company Q.Cells AG, said that significant cost reductions must be achieved in the next 4-10 years for solar energy to become competitive. Miller explained that the generating cost of solar energy in sunny countries (22-35 EuroCents per kilowatt hour) is already below retail price.

Elsewhere, generation costs for solar power still exceed retail price. Frank Asbeck, the CEO of Germany’s largest solar power company, SolarWorld AG, told the Atlantic Times earlier this summer that his company will break the retail price barrier in 2012, as the cost of power from the roof sinks by 5 to 8 percent annually and the retail cost of electricity grows.

Strategy for growth: Chinese villages and the Governator

Emerging economies like China and developing countries figure prominently in the industry’s prospects for growth. Small solar power stations can function in remote areas without the need for a centralized electrical grid. Frank Haugwitz of the German Agency for Technical Cooperation reported to conference attendees about a project that brought solar power to 400,000 people in 721 Chinese villages from 2002-2004.

Asbeck hopes that rural electrification in China will develop along the same path as telecommunications in Asia, where mobile communications leapfrogged landlines to bring phone and internet to the masses. His company offers a “First Aid Kid” for the developing world – a solar module and an adapter cord that costs less than $100 – which a remote village might use to power a water disinfection system, lights, a cell phone, and perhaps even the MIT’s $100 dollar laptop.

The U.S. also offers a promising market for solar energy. Michael Eckhart, President of the American Council on Renewable Energy, told the conference attendees that the states are leading the call for alternative energies. A major breakthrough in this area is California Governor Arnold Schwarzenegger’s Million Solar Roofs Initiative, which foresees an investment of $3.2 billion in solar power facilities.

Solar summer for Saxony

The German federal state of Saxony, where Dresden is located, has enjoyed more solar highlights this summer than just the conference. In July, Asbeck’s SolarWorld celebrated the roof-raising for its biggest investment to date, an €80 million ($101.16 million) facility in Freiberg where 200 employees process silicon, build solar modules, and ship them across Germany and the world.

These jobs are important to Saxony, where unemployment is hovering around 20 percent, and Asbeck believes he can keep them there: “As long as we keep our wage costs between 10 percent of revenue […] I don’t need to go to the Czech Republic or anywhere else. That’s why I can also produce in the USA,” he told the Atlantic Times.

SolarWorld is the third largest solar power company in the world, with over 1,300 employees and revenues just under €500 million. The Freiberg site is its main production facility.

Links:

European Photovoltaic Solar Energy Conference and Exhibition

Atlantic Times Interview with Frank Asbeck

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