Meyer Burger Technology, a Europe-based solar cell and module manufacturer, has started the process of shutting down its manufacturing facility in Freiberg, Germany. The closure is a part of the company’s plan to cut its losses in Europe and move the manufacturing base to the U.S.

The company stated that maintaining a full-scale solar manufacturing operation in Europe is no longer viable and announced plans to shift focus to the U.S. market, which promises faster growth with lower capital demands.

The company plans to explore the options under the 45X Advanced Solar Manufacturing Tax Credit regulation to advance its expansion plans in the U.S.

The company said a final decision on the closure would be made by the second half of February, and the shutdown would begin in April 2024, as it left a window of possibility if the government were to introduce incentivizing measures.

Gunter Erfurt, CEO of Meyer Burger Erfurt, said, “Closing our state-of-the-art module production in Germany, which started production less than three years ago, is a decision we would like to avoid. But in the absence of long-time announced firm commitments by lawmakers on measures to create a level playing field, we are prepared to execute our restructuring plan in Germany.”

Solar cell production in Thalheim (Bitterfeld-Wolfen), Germany, is expected to continue to support the production ramp-up of U.S. solar module manufacturing.

The company said it would continue operating its R&D sites in Switzerland and Germany to develop and produce technology and equipment to support its business outside of Europe.

The company maintained that the U.S. is conducive to a thriving domestic solar market, given the Inflation Reduction Act benefits, stable cost base, fixed purchase agreements, and profitable price levels.

Erfurt explained, “In the U.S., we can take full advantage of our leading technology position, resulting in substantial interest by partners and supported by favorable industry policies. Given 5.4 GW of order book under offtake agreements and a potential to generate EBITDA at roughly CHF 250 million (~$288.19 million) in 2026, we are able to grow a profitable business, providing a positive outlook for our shareholders. The expansion of the U.S. business is currently proceeding as planned with the ramp-up of our solar module production site in Goodyear, expected to start in the second quarter of 2024.”

Meyer Burger blames the significant increase in Chinese production overcapacity and trade restrictions imposed by India and the U.S. for the oversupply and distortion in the European solar market over the past year.

The company expects to conclude the 2023 fiscal year with an EBITDA loss of at least CHF126 million (~$145.25 million). The company’s module inventory increased significantly to 360 MW despite the slumped sales during the year. The production facilities in Germany were underutilized, adding to the costs.

The company expects to self-fund its expansion in the U.S. through the sale of inventory, and it has also applied for a loan from the U.S. Department of Energy, passing the first assessment stage.

It is also considering equity financing, involving a rights issue, private placements or other forms of equity-based financing.

In September 2023, the European solar manufacturing industry, represented by SolarPower Europe, wrote to the European Commission, highlighting a critical issue regarding the low prices of photovoltaic modules imported from China into Europe and their impact on the domestic market. It claimed that due to the lower prices and oversupply from the Chinese counterparts, manufacturers in the EU were left with over 500 MW of unsold modules, equivalent to more than 30% of their annual manufacturing capacity.