Spectacular comeback The new boom in the solar industry

As of: 06/24/2021 8:03 a.m.

After years of decline and bankruptcies, the solar industry in Germany is experiencing a comeback. Even solar cells are being produced again in this country. Help is also coming from the coalition.

From Lothar Gries, tagesschau.de

While the expansion of wind turbines is stalling, photovoltaic systems are enjoying ever greater popularity. In a tender in March, the Federal Network Agency was literally overrun with applications. There were more than twice as many interested parties as expected. Much to the delight of the Union and the SPD, who are agreed on an immediate program for energy and climate protection shortly before the summer break . After the federal cabinet yesterday given the green light has, the package should to be passed by the Bundestag today . According to this, the tender volumes for photovoltaic systems will be increased by 4.1 gigawatts to six gigawatts from next year. In the future, the municipalities will also be able to participate financially in photovoltaic areas. Until now, this was only possible with wind turbines. The Union and the SPD could not agree on a solar obligation for new buildings. Consumer advocates and the Haus und Grund association had heavily criticized the plans.

Mega boom in the solar industry

Solar systems were already very popular last year. According to the Bundesverband Solarwirtschaft (BSW), a quarter more solar systems were installed on German roofs than in the previous year, exactly 184,000, with an output of around 4.9 gigawatts. No other form of energy grew faster in power generation. However, pull-forward effects probably also contributed to this. In the spring there was still uncertainty about the continued existence of state subsidies, plus the temporarily reduced value added tax.

Almost every tenth kilowatt hour consumed this year comes from solar energy in this country. The Federal Association of Energy and Water Management (BDEW) is already demanding that new solar systems with an output of at least ten gigawatts (GW) be installed every year by 2030. “We need a solar boom,” said BDEW chairwoman Kerstin Andreae recently to “Handelsblatt”.

Again solar cells from Bitterfeld

The domestic production of solar modules is celebrating an unexpected comeback these days. Solar cells are being produced again in Germany, in what was once the “Solar Valley” near Bitterfeld in Saxony-Anhalt. The Swiss company Meyer Burger recently opened a new plant here, which will be ramped up these days.

“At the historic Solar Valley solar location, we are setting a milestone on Europe’s path to more strategic independence in the key technology of photovoltaics,” said CEO Gunter Erfurt at the opening on May 18th. In the highly automated operation, up to 200,000 solar cells are expected to roll off the production line every day. In a first step, an annual capacity of 400 megawatts is planned. It should be five gigawatts by 2026.

Next door, the solar company Q-Cells, which belongs to the South Korean Hanwha Group, is expanding its location in Bitterfeld and intends to invest a good 140 million euros in the research and development of new, low-resource solar modules by 2023. Q-Cells was once one of the largest photovoltaic manufacturers in Europe, but was ousted by Chinese competition and had to file for bankruptcy in 2012 before the Koreans bought it.

The lucrative business with solar parks

In fact, the manufacture of solar panels plays a rather subordinate role in the rebirth of the industry. The most important players in the new boom are now operators and developers of solar parks, above all the Hamburg company Encavis, which has now been included in the MDAX share index. The electricity provider, formerly known as “Capital Stage AG”, acquires and operates solar power plants and (onshore) wind parks in Germany and other European countries – with success, as the latest outlook shows. The result this year is expected to increase more than twice as fast as in 2020. Sales are expected to grow to over 320 million euros, thanks to two newly connected solar parks in Spain with a maximum production capacity of 200 and 300 megawatts each. The regular income that such a business model generates has not escaped other entrepreneurs.

Is a new IPO imminent with BEE?

Five years ago, a dozen Encavis managers decided to start their own company. With financial help from the entrepreneurial family Wacker (Wacker Chemie) and the former publishing family Jahr, the wind and solar park operator Blue Elephant Energy (BEE) was created. The company controls systems with a combined output of 1.1 gigawatts. Projects of a similar size are being planned. BEE achieved an operating result (Ebitda) of more than 60 million euros last year with a turnover of over 80 million euros. Because of the unusually high margin and the industry’s growth prospects, there is even speculation that the Hamburg-based company will go public. The company could earn 150 million euros, insiders reported to the Reuters news agency. After that, the issue could be implemented this summer, if possible in July. The company does not comment on the speculation. But company boss Felix Goedhart is quoted by the “Frankfurter Allgemeine Sonntagszeitung” as saying: “Our operating profit margin of 74 percent with low risk should be interesting for investors.”

Solar power from Mecklenburg for VW

Climate protection and the goal of the EU Commission to make Europe the first climate-neutral continent by 2050 are generating more and more alliances between a wide variety of companies. The Hamburg asset manager Luxcara has acquired a solar park in Mecklenburg and commissioned the energy giant RWE to market it. RWE will supply the car manufacturer Volkswagen with electricity from next year. The system has a total capacity of 170 million kilowatt hours of electricity per year, which makes it one of the largest solar projects in Germany

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Investment opportunities What to do with the savings in inflation?

Status: 22.06.2021 12:28 p.m.

Even in times of rising prices and zero interest rates, many Germans have their money in savings books or call money accounts. But if you want to protect your savings from inflation, you need alternatives.

From Lothar Gries, tagesschau.de

Consumer prices in Germany rose by 2.5 percent in May – more than they have been for almost ten years. At the same time, there is practically no more interest on overnight and fixed-term deposits, the most popular form of investment among Germans. Cash is also in great demand. The value of the notes issued by the Bundesbank rose by 9.5 percent last year. A similarly high growth rate was last seen in 2014. At the end of May 2021, banknotes issued by the Bundesbank to the value of 839 billion euros were in circulation, 52 billion or 6.6 percent more than a year earlier. But if you want your money to grow, you have to consider other investments than hoarding cash or putting it on savings accounts. There is no shortage of alternative investment opportunities. The long lucrative federal bonds are no longer one of them. The yields on these securities have fallen below zero since August 2019. Investors who lend money to the German state have to pay for it – a turning point, as they still got a return of five percent at the beginning of the millennium. “Today federal bonds have no place in assets that are designed to maintain or increase in value,” explains Ulrich Kater, chief economist at Deka-Bank, which is part of the savings bank group.

No prospect of rising interest rates

Investors should also not give in to the hope that consumer prices, which have recently risen again, will lead to higher interest rates. Inflation is likely to accelerate further until the end of the year, but the European Central Bank (ECB) has repeatedly emphasized that it will adhere to the zero interest rate policy. The priority is to stimulate the economy again after the corona crisis, said ECB boss Christine Lagarde. In addition, the current rise in inflation is only temporary.

Investments that are considered to be risk-free, such as savings books and fixed-term deposit accounts, no longer offer any prospect of positive returns for the time being. In order for the saved to experience growth, stocks in particular offer themselves as a way out. Fund savings plans, for example, are a good way to get started. Investors pay regular amounts, in many cases from 25 euros upwards, into an investment fund in which various securities are bundled and which is managed by professionals. Alternatively, of course, investors also have the option of taking their money into their own hands and buying shares in individual companies on their own. In the past few years, you couldn’t go wrong when buying technology stocks.

Alternative ETF?

If you don’t dare to do this, but still want to invest in stocks, you can invest your money in a so-called Exchange Traded Fund (ETF). These funds replicate a stock market index (often with so-called derivatives). This can be the German share index (DAX) or other indices such as the US leading index Dow Jones. The performance of an ETF is closely linked to the respective index. As a result, the fees are usually lower than with other funds. Investing in the stock market is of course not without risk: If the index behind an ETF falls because the stocks in it fall, the fund also loses value.

Nevertheless, ETFs are enjoying growing popularity. According to industry experts, there are almost 7,000 of these funds. This is also due to the low interest rate phase. It ensures that more people invest their money in funds than before. Many have done well with this strategy and have achieved better returns than they would have achieved on a call money account. For example, an ETF on the DAX alone has generated a return of 55 percent in the last five years – provided that you kept your nerve at the beginning of the pandemic and did not sell when the markets collapsed by a third in spring 2020.

Gold and open real estate funds

A popular investment, especially in times of crisis, is gold. The corona pandemic has confirmed this again. By early August 2020, the price of a troy ounce (31.1 grams) had risen to an all-time high of $ 2,063, around a third more than at the beginning of the year. But then things went downhill again, to $ 1,684 in March. It is currently $ 1,775. In fact, gold is extremely volatile because the price is mainly driven by demand, because it has no “intrinsic value” like companies do. The precious metal is therefore not considered a reliable investment. There is also the often unsafe storage of bars or coins.

Those who shy away from the capital market and don’t believe in precious metals can also invest their money in real estate funds. They collect capital from investors and invest it in offices, shopping centers, residential buildings or logistics centers. The so-called open real estate funds are particularly popular with private investors. The income from such a fund, i.e. the rental income after deducting costs, is distributed to the owners as profit. With well-managed funds, an annual return of four to five percent can be achieved, a little more than the inflation rate.

Sometimes there is a risk of total loss

But the system has a catch. A minimum holding period of 24 months applies to open-ended real estate funds. An investor must also announce the return of his money to the fund company. Then he will get his system back after twelve months at the earliest. So if you have to get your money at short notice at any time, you should refrain from such investments.

The examples show that there is no shortage of alternatives to the savings book or a federal bond. But if you want to increase your money, you also have to be prepared to take risks. In some cases, for example when purchasing shares, there is even a risk of total loss, as the example of Wirecard recently showed. A look abroad – especially the USA, where far more people own shares than in Germany – shows that long-term wealth can only be built up with investments in the capital market

Investors in high spirits Why the DAX rushes from record to record

Status: 14.06.2021 4:03 p.m.

While the economy is only slowly picking up pace after the Corona openings, the German stock market does not seem to be stopping. What are the main reasons for the price boom? From Lothar Gries, tagesschau.de The German leading index DAX rose by up to 0.7 percent in the morning and climbed to a record high of 15,802 points – the 23rd record this year. The index has risen by 15 percent since the beginning of the year. The stock exchanges are also in record-breaking mood at the European level. The Stoxx 600 index, comprising 600 values, also climbed 0.7 percent today and reached its 38th high this year with 460.51 points. The stock markets are fired from several sides. The most important driver is the expansionary monetary policy of the central banks in the USA and Europe. Since the European Central Bank (ECB) lowered the key interest rate to zero on March 10, 2016, i.e. more than five years ago, the returns on traditional savings offers from banks and savings banks have also shrunk to such an extent that even risk-averse German investors are looking for alternatives have looked around. In addition to real estate and precious metals, stocks are very popular.

More and more shareholders

In this country there were as many shareholders last year as last year in 2001, as determined by the German Stock Institute (DAI). According to this, 12.4 million people in Germany have invested in the stock market, i.e. they owned exchange-traded securities such as fund shares or stocks. Compared to 2019, that’s an increase of 2.7 million or 28 percent. The downward trend of previous years has thus been completely reversed. After the dot-com bubble burst in 2000, the number of equity investors in Germany steadily declined – until interest rates sank to virtually zero. But the ECB has not only boosted the number of shareholders and thus share investments, it is also active on the capital markets itself. In order to keep the economic effects of the corona pandemic as low as possible, the central bank is pumping many millions of euros into the market every day. To do this, it buys bonds issued by governments and companies. By the end of March 2022, she wants to spend the gigantic sum of 1.85 trillion euros, a number with twelve zeros. A considerable part of it flows into the stock market and drives prices to ever new heights.

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No end of the flood in sight

In the past few weeks, there have been repeated suspicions that the central banks in Europe and the USA will soon be able to turn the money off again because inflation is reporting back and price increases have shot far beyond the monetary authorities’ targets. But both Jerome Powell, the head of the US Federal Reserve (Fed), and ECB President Christine Lagarde initially gave the all-clear. Just today, Lagarde said in an interview with the magazine “Politico” that the time was not yet ripe for a discussion about an end to the crisis bond purchases by the central bank. “It is far too early to debate these issues,” said Lagarde. The economic recovery must be firm, solid and sustainable. Don’t take a patient’s crutches off until the muscles begin to build up sufficiently – so that the patient can move on their own two legs again.

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V-shaped economic recovery expected

In addition, investors are assuming that the pandemic-related restrictions will end soon. “The pandemic is no longer an issue at the latest with the now significantly lower number of new infections, and investors also seem to be able to come to terms more and more with the fear of inflation,” says market expert Milan Cutkovic from brokerage firm Axi. With the decline in Covid-19 restrictions, growth expectations are skyrocketing around the globe. The Organization for Economic Cooperation and Development (OECD) expects the global economy to grow by 5.7 percent this year. For Germany, the federal government expects growth of up to four percent. The prognosis from the beginning of the Corona crisis that there will be a V-effect in which the economy first collapses, but then quickly recovers, seems to be confirmed. This is rather good news for equity investors, because they hope that a growing economy will generate increasing profits and thus rising prices for listed companies.

Price turbulence ahead?

This combination of a zero interest rate policy, a glut of money from the central banks, a growing number of shareholders and the expectation of a rapid recovery in the global economy is driving share prices to ever new heights. But the air is getting thinner. Many investors are watching the Fed’s monetary policy deliberations this Wednesday. It is true that the Fed is not expected to deviate from its current course and end the boom in the financial markets. “But their projections on inflation, interest rates and the economy could cause price turbulence,” says Naeem Aslam, chief market analyst at the brokerage firm AvaTrade.

Economic recovery Is Germany’s upswing lagging behind?

Status: 11.06.2021 6:09 p.m.

The corona numbers are falling, economic life is normalizing and the economy is picking up again. Germany seems to be lagging behind its neighbors. Is it really like that? From Lothar Gries, tagesschau.de The British economy grew by 27.6 percent in April compared to the same month last year – a record as the National Statistics Office (ONS) announced. The strong growth figures reflect the economic recovery in the wake of the gradual opening of the economy, which crashed in spring 2020 after the start of the pandemic and the following protective measures. Projected over the year, the British central bank now expects an increase in gross domestic product (GDP) of 7.25 percent. That would be the highest growth rate since 1941. Other European countries such as France are also assuming a strong economic recovery of 5.5 to 5.7 percent for the current year. The Spanish government even expects an increase of 6.5 percent. In fact, in the opinion of most economists, the prospects for economic growth in the euro area have brightened significantly in view of the falling number of corona infections and the global economic recovery. According to the latest information, the European Central Bank (ECB) is therefore assuming an increase in GDP in the euro area of ​​4.6 percent this year.

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Germany far behind in terms of growth

After a strong upward trend, things should go up in the USA, which is still the largest economy in the world. There, the Federal Reserve (Fed) is expecting an increase in economic output of 6.5 percent with a view to the advanced vaccination campaign and the prospect of an economic stimulus package. In China, Germany’s most important trading partner, the economy is likely to grow by as much as 8.5 percent this year. And Germany? Lies far behind in one of the farthest places. The Bundesbank currently expects GDP growth of 3.7 percent for 2021. Federal Minister of Economics Peter Altmaier is even more optimistic. “Thanks to extensive government aid of almost 300 billion euros, the German economy survived the worst of the coronavirus crisis. This year, growth of three and a half to four percent would be possible,” said the minister.

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So is the recovery of the domestic economy lagging behind that of its most important trading partners? The economists of the Organization for Economic Cooperation and Development (OECD) give a differentiated answer. It is true that the economy in countries that quickly vaccinate their population against Covid-19 and that contain the infection rate through effective measures is recovering faster than elsewhere.

Already in the summer pre-crisis level

In South Korea and the United States, for example, per capita income is likely to have reached pre-pandemic levels by the end of this month. In large parts of Europe, however, this will only be the case after three years, in Mexico and South Africa it may take five years or more, the OECD fears. Seen in this way, Germany is in a much better position than when looking at the bare growth figures. The Bundesbank estimates that economic output could reach pre-crisis levels again this summer. The economists of the OECD expect that this will not be the case until the end of the year.

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Nevertheless, the recovery in Germany would still be faster than in Italy, France or Spain. In these countries, GDP per capita is unlikely to be above the level of the end of 2019 until the middle of next year, according to the forecast of the OECD. It looks particularly bleak for Spain, whose economy will not be above pre-crisis levels again until the summer of 2023. The experts predict that Great Britain will not return to pre-crisis levels until the middle of next year.

Fatal dependence on tourism

This shows the great dependence of these states on the service sector and especially on tourism. In Spain, for example, this industry slumped by 48.4 percent last year, in Italy by 35.1 percent, in Greece even by 55.4 percent, while in Germany it fell by almost 15 percent. Accordingly, GDP fell less sharply in Germany last year than in most of the neighboring countries. This is also due to the comparatively higher share of industry in the overall economy and its unchanged strong exports to China. “How strong the economic recovery will be in each country depends on the level of government support for businesses and vulnerable workers, the degree of dependence on certain industries such as tourism, and health and vaccination policies,” said a May report Study by the OECD. Despite the global economic recovery, global income is likely to be around three trillion dollars lower than before the pandemic by the end of 2022, the OECD estimates. This roughly corresponds to the performance of the French economy.

Increasing influence How China is entering Europe’s ports

Status: 10.06.2021 12:33 p.m.

Piraeus, Rotterdam, Antwerp and soon possibly also Hamburg – China has its own terminals in 14 European ports or holds shares in port operators. Critics warn of the consequences of the urge to expand. From Lothar Gries, tagesschau.de The listed Hamburg port operator HHLA is currently negotiating with the Chinese state shipping company Cosco about a possible participation in one of its container terminals – with the telling name of Tollerort. HHLA recently announced that a legally binding agreement has not yet been reached. However, the publication of such a release indicates that the talks are on the home stretch. Trade with China is by far the most important business for the third largest European seaport. Ships of the Chinese shipping company Cosco have been calling at Hamburg for almost 40 years. Two years ago, China’s Vice President Wang Qishan also visited the Tollerort terminal. With its four berths on a quay wall a good kilometer long, 14 container cranes and a five-track rail connection, Tollerort is one of a total of four container terminals in the Port of Hamburg and the second largest at HHLA.

Important loophole

According to experts, by entering Hamburg, China would close the largest gap in its maritime Silk Road. Even more: through a partnership with HHLA, Cosco could also get privileged access to the Italian Adriatic port of Trieste. The Hamburg port operator had taken over the majority in a new terminal there last year – with the express approval of the government in Rome, which wanted to block the way for the Chinese who were also interested. Because a majority stake by Cosco in the largest container terminal in Trieste would have been tantamount to a sell-out from the perspective of the Italians. Now the Chinese could still gain access to Trieste via Hamburg. That would be a decisive move in Beijing’s expansion strategy, since Trieste is the northernmost port in the Mediterranean and therefore particularly important for Central and Eastern Europe. HHLA is also involved in terminals in the Ukraine and Estonia.

“Loss of Sovereignty”

Cosco and its sister company China Merchant already have their own terminals in a total of 14 European ports – or at least shares in the port operators. All the major seaports on the continent are included, from Rotterdam and Antwerp to Le Havre, Bilbao, Genoa, Valencia and Marseille. According to calculations by US experts, more than two thirds of the 50 largest container terminals in the world are already controlled by the Chinese or at least supported by holdings. “Europe has thus lost some of its sovereignty,” complained the former French Prime Minister and China expert, Jean-Pierre Raffarin. The sell-off began in 2016 when Greece, which was practically bankrupt at the time, was forced by the troika made up of the monetary fund, the EU and the ECB to privatize the port of Piraeus. The Chinese were happy to take it and were given complete control of the strategically located port for a bargain price of 280 million euros. Today Piraeus is number four in Europe, behind Rotterdam, Antwerp and Hamburg. The port is the end point of the maritime Silk Road, from China across the Indian Ocean to the Red Sea. Beijing also controls its entrance for onward travel through the Suez Canal, with a naval base in Djibouti on the Horn of Africa.

Silk Road project – anything but a marketing gimmick

The example of Greece shows the political effects of China’s increasing influence in some countries, says Günther Oettinger, the former EU Commissioner and Prime Minister of Baden-Württemberg. “Before the European Union imposed symbolic sanctions on China in March, Greece liked the role of delaying and watering down resolutions against China. A rogue who thinks evil”, said the CDU politician in a guest article for the “Tagesspiegel” “. China’s expansion can no longer be stopped. “We cannot blame the Chinese for being smart. We can only blame ourselves for being so stupid,” said French President Emmanuel Macron, referring to China’s strategy, which is an increasingly large one in Europe’s economy Role to play. In fact, the EU countries watched China’s shopping spree for a long time with takeovers of technology companies such as the German robot manufacturer Kuka. “When China’s leadership launched the ‘New Silk Road’ project in 2013, many in Europe believed it was a marketing gag,” said Günther Oettinger. President Xi Jinping was very serious, as can be seen from the trade network that has now been established. In Europe, China prefers to help those states, such as Greece or Hungary, that are poorer than Western Europeans. These countries are to be tied closely to themselves by investing billions in infrastructure in order to create a “China-friendly Europe”, as a high-ranking EU diplomat of the “world” said.

No concerns from Berlin

The most recent decision by the EU Parliament, which Suspend discussions on the investment agreement reached with China at the end of last year . Among other things, it was supposed to regulate the access of European companies to the Chinese market, but met with growing opposition in the European Union. Critics complained that the agreement did not set any limits to China’s expansionist urge. This is unlikely to prevent the Chinese from entering the Tollerort container port in Hamburg. The negotiations are after NDR- Information well advanced and coordinated with the federal government. There are no concerns from the Chancellery, the Ministry of Economics and Transport, or the Foreign Office.