Solar Energy

Solarworld Seeks State Aid to Rise Again

  • Why it matters

    Why it matters

    Even in its prime, now-bankrupt energy firm Solarworld relied heavily on public support. Now its successor company is on the hunt for new ways to find government help.

  • Facts


    • Solarworld was once the great success story of German renewable energy, surging to a stock market valuation of nearly €5 billion.
    • In May 2017, Solarworld finally went bankrupt, after years of declining subsidies had eroded its business model.
    • This month, founder Frank Asbeck bought Solarworld factories from the bankrupt company, and will restart a much leaner company, with around a quarter of the workforce.
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Follow the yellow brick road. Source: Action Press

Frank Asbeck, the man who has dominated the German solar industry for two decades, refuses to go down without a fight. Having led his once all-conquering Solarworld company into bankruptcy in May, and seen it partly saved by a Qatari rescue package earlier this month, he is now looking for state help to revive his solar empire, Handelsblatt has learned.

Handelsblatt’s sources say Mr. Asbeck has been sounding out political options to get state support for his company. The states of Thuringia and Saxony, where the company’s two factories are based, are willing to offer financial guarantees to the reconstituted Solarworld. No formal application has been made for state assistance in any state, not least because Mr. Asbeck would have to submit a substantial business plan.

For a number of reasons, both national and state politicians will be deeply ambivalent about helping out the irrepressible Mr. Asbeck. First, EU law puts severe restrictions on government money for businesses. Second, he has benefited handsomely from public subsidies in the past. Finally, the fact that a Qatari investor now owns 49 percent of Solarworld is a difficulty: human rights allegations about the Gulf state could make things tricky just before a national election.

“With state support, Mr. Asbeck would get the benefit of an innovation center, while others pay the bills.”

Götz Fischbeck, solar energy market expert

But direct loan guarantees are not the only public help that could be available. Mr. Asbeck has always had a genius for sniffing out state subsidy and support. This time round, just months after his company’s bankruptcy, he is proposing that Solarworld open up its research department for collaborations with other firms, possibly spinning it off entirely from the main firm. In return, it could become eligible for direct funding from federal and European sources.

Company insiders of the post-bankruptcy Solarworld claim that German state or federal governments could then take a direct stake in a non-profit Solarworld research unit. Outside observers expressed some skepticism. “It’s simple: Mr. Asbeck needs an innovation center, but can’t fully afford it. With state support, he gets the benefit while others pay the bills,” said solar market expert Götz Fischbeck.

Nonetheless, possible state support for a spun-off research facility was already discussed by representatives of the federal and Thuringian state government on June 27, Handelsblatt has learned from a participant at the meeting. The government of Saxony told Handelsblatt it has ruled out any participation in such a scheme, while Thuringian officials said it was not currently on the agenda. The federal economics ministry declined to comment.

While people close to Mr. Asbeck continue to talk in grand terms about strengthening the European solar industry, Solarworld has not presented a new business plan in either Thuringia or Saxony, the states where his factories are located. On August 3, the company presented plans for a revival of the business to 30 labor representatives. The plans, said people who were present, were brief and lacked detail, focusing on premium products and suggesting the workforce would be cut from 1,850 to 500. Participants reacted angrily to the sketchy plans, with one saying the business plan had the sophistication to operate a food-truck.

However, in the past Mr. Asbeck has shown an extraordinary nose for state support and subsidy, and a consistent capacity to persuade politicians to support his business.

The sun also rises, if it's up to Mr. Asbeck. Source: DPA

A farmer and an enthusiastic hunter, Mr. Aspeck founded Solarworld in 1998. Two years later, new energy laws brought in substantial subsidies for renewable energy, turning his business model overnight into a runaway success. With the German government paying €0.50 for every kilowatt-hour of solar energy generated – far above the market rate – business boomed. Within a number of years, Solarworld was listed on the stock exchange and valued at €4.6 billion.

“Over the years, he has received, at a conservative estimate, well over €100 million in public subsidies for Solarworld,” explained Mr. Fischbeck, the solar energy expert. Over the decades, the state of Saxony paid Solarworld around €11.2 million in grants and subsidies: it is now attempting to reclaim some of these funds.

Despite state support, Solarworld’s business model grew increasingly shaky as the years went by. As the global market boomed, the German market shrank, as limits on subsidies undermined profitability in the sector. By 2013, Solarworld was in deep trouble: it came very close to bankruptcy, rescued at the last minute by a bailout from Qatari investors, which nonetheless left some shareholders facing a 95 percent haircut. In May of this year, bankruptcy could no longer be avoided. But not long afterwards, the insolvency administrator sold Solarworld’s facilities to Mr. Asbeck himself, and more investors from Qatar.

At a conservative estimate, Mr. Asbeck has received well over €100 million in public subsidies for Solarworld.

Despite severe criticism from shareholders, the deal went through, granting Mr. Asbeck yet another fresh start with Solarworld. And state support for his business was again high on his agenda – he is apparently keen to see Germany’s renewable energy laws revised in ways that might favor his own company.

Interviewed earlier this week by the Frankfurter Allgemeine Zeitung newspaper, Mr. Asbeck said that the current rules for renewable energy contracts mainly benefited Chinese providers. Government contracts should not be determined by price alone, he said, but according to criteria of quality, efficiency and ecological standards.

Germany’s renewable energy laws are a federal matter, but states have influence in the matter via the Bundesrat, the upper house of parliament, which is made up of representatives of state governments. The laws are currently a matter for debate, said a spokesperson for the Thuringian economics ministry. However, a spokesman for Saxony said they were not a priority. The federal economics ministry declined to comment.

16 p09 Solarworld – Crash After the Boom-01

Dana Heide is a political correspondent for Handelsblatt in Berlin. Franz Hubik covers renewable energy for Handelsblatt in Düsseldorf. Thomas Sigmund is the bureau chief in Berlin, where he directs political coverage. To contact the authors:,,

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