Europe's embattled solar power industry has been dealt a fresh blow, with cut-price competition from China driving Germany's SolarWorld into insolvency and wiping out quarterly profits at SMA Solar. Silvia Antonioli reports.
Stormy times for European solar companies. Germany's largest solar group, SMA, posted a 90 percent drop in first quarter operating profit. And they did better than their peer SolarWorld. They filed for insolvency on Wednesday. The cause of such pain? Aggressive Chinese rivals. They have long been a thorn in the side of Europe's embattled solar power industry. Yet, CEO Frank Asbeck, known as "the Sun King" in brighter times, hasn't lost his optimism. (SOUNDBITE) (English) FRANK ASBECK, CEO, SOLARWORLD: "Despite the cloudy weather, I see a positive outlook. We'll definitely get the necessary majority today, I'm sure of it. And I hope this is a 're-birth', a new birthday for SolarWorld, and then we'll see how it goes." Germany was instrumental in building the global solar industry, thanks to lavish state subsidies. Since these were taken away handling competition has proved tougher. And when China cut support to its own industry, cut-price Chinese products started to flood the global market. SMA is trying to fight back by expanding its energy-management business. It hopes that sector has higher entry barriers for competitors. When for now the sun is shying away from Europe's solar industry.