German Solar Millennium files for insolvency

Dec 21, 2011 - German solar technology company Solar Millennium AG (ETR:S2M) announced today it had filed for insolvency with the district court in Fuerth.

The company noted that certain conditions of the agreements for the sale of its US pipeline have not been met yet. In addition, intensive negotiations with investors on the entrance into the Ibersol project could not be finalised. These two transactions would have generated funds that would have more than covered the company's liquidity needs, Solar Millennium said.

At the beginning of November, German solar company Solarhybrid AG (ETR:SHL) said it plans to enter into a partnership with US solar module maker First Solar Inc (NASDAQ:FSLR) in order to acquire the US project pipeline of Solar Millennium. The sale was expected to be completed by the end of November.

Solar Millennium's Blythe, Palen, Amagosa-Tal and Ridgecrest plants in the USA, which have a combined capacity of 2.25 GW, were initially planned to use concentrating solar power (CSP) technology. However, the company later decided to convert all of the US projects to PV power.

German solar technology firm Solon SE (ETR:SOO1) has also recently filed for insolvency, raising concerns that other sector companies may follow.

According to estimates by the Berlin University of Applied Sciences (HTW), the global solar energy sector will face a significant consolidation as capacities currently exceed demand by around two-thirds, while Chinese sector players are putting pressure on prices.

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