How many more green energy companies must go bankrupt or reduce labor forces before all you green energy advocates will say enough? On April 17, First Solar, a solar energy company that received a $1.46 billion loan guarantee from the Department of Energy (DOE), announced that it will lay off 2,000 workers in the US and worldwide. First Solar announced that the company will "indefinitely idle" (whatever that means) four production lines in Malaysia and close a plant in Germany. These actions, combined with other personnel reductions in Europe and the US, will reduce First Solar's global workforce by approximately 2,000 positions, about 30 percent of the total. This is the largest reduction for the industry since bankrupt Solyndra dismissed its 1,100 employees in August, 2011.
Five months ago, First Solar celebrated making its millionth solar module for the European market at a plant in Frankfurt an der Oder. However, reality (in the form of decreasing subsidies and demand) reared its ugly head. On Tuesday, the company, which is based in Arizona, announced that it would stop all of its German production. First Solar said it will return a $30 million German government grant, write off at least $150 million in assets, and spend as much as $55 million on severance payments to its workers there.
Solar manufacturers are struggling with subsidy cuts in Europe and falling natural-gas prices that make renewable energy less competitive. The largest producers in China say their profits will fall this year as shipments grow. The entire solar industry is struggling to cope with three new realities: lower government subsidies for solar power around the world, significant global overcapacity in panel manufacturing, and intense competition from Chinese makers of solar panels. Solar panel prices have fallen 46% in the past year as manufacturers, led by First Solar and Suntech Power, the world's largest solar company, boosted output. Germany and Italy, the two biggest markets, cut subsidies (rates paid for solar power) to curb an uncontrolled installation boom.