Siemens closes solar business with €784m in losses

Siemens, a German engineering giant, is set to close its solar energy unit, Solel Solar Systems, after it failed to secure a buyer for the business that is loaded with losses of €784m ($1bn).

The company had put up the business for sale in October 2012 citing that lower equipment prices and slow growth have dented company’s estimations from the unit.

Siemens had acquired solar thermal project equipment maker Solel in 2009 for $418m.

Commenting on the move, Siemens spokesman Torsten Wolf told Bloomberg that the company would first complete the ongoing solar projects before permanently closing the operations.

The closure would cost the company a double-digit million-euro amount, added Wolf.

Although the company has commenced shuttering its facilities, some of the projects are expected to continue till 2014.

It " has become evident that, due to the increasingly difficult market situation, we will not find an investor for this business," revealed Wolf talking about company’s failure in selling the unit.

Earlier in January 2013, Siemens chief financial officer Joe Kaeser estimated that the losses from solar unit would account to a total of €1bn by the end of fiscal 2013 with losses, when writedowns were at €850m then.

Closure is set to affect 280 jobs, which were initially 600.

Siemens solar unit contraction is akin to technology firm Bosch’s exit from solar industry after accumulating losses of €2.4bn in five years of its operations till March 2013.

European solar industry has slumped mainly due to the heavy imports of low-cost solar modules from China, which led the European Commissioner to levy punitive charges on such imports.