German Solar Industry at a Crossroads: Growth, Challenges, and Calls for Action

Germany’s solar power production rose by 14% last year, a clear sign that the country’s solar sector continues to expand. And yet, not everything is as bright as the statistics suggest. A visit to the Intersolar trade fair in Munich reveals the deeper challenges facing the industry.

Despite being one of the leading global exhibitions for solar technology, German companies were notably underrepresented on the showroom floor. That’s because the much-heralded “solar boom” — which, according to the German Solar Industry Association, shows no signs of slowing — is being driven predominantly by Chinese manufacturers.

One of the few German exhibitors, SMA Solar Technology from Hesse, continues to hold its ground against overwhelming international competition. Spokesperson Eric Quiring says the company relies on continuous innovation, high product quality, and long lifespans to differentiate itself in a tough market.

Cybersecurity Concerns in Solar Tech

SMA produces inverters — devices that convert direct current from solar panels into usable alternating current. The company employs over 4,000 people and reports annual revenue of €1.5 billion, highlighting the strength of its “Made in Germany” strategy. But alongside innovation, cybersecurity has become a crucial concern.

Quiring warns that foreign control over solar infrastructure, whether through hacking or built-in remote access functions, could pose a serious threat to both German and European power grids. He argues that critical components like inverters are best developed and manufactured domestically to ensure data integrity and prevent remote manipulation.

Calls for a More Active Industrial Policy

German manufacturers, industry associations, and researchers are now urging the federal government to adopt a more proactive industrial policy that supports domestic solar production. They point to progress already made in countries like Italy, France, and Austria, where efforts to rebuild a European solar industry are well underway.

Ralf Preu of the Fraunhofer Institute for Solar Energy Systems (ISE) in Freiburg cites a promising example in Sicily, where a combined solar cell and module production facility is being established. The project involves multiple European equipment manufacturers and research institutes, working together to develop a competitive production hub.

Europe’s Solar Industry Needs Rebuilding

According to Preu, the political framework for revitalizing solar manufacturing in Europe is already in place. What’s missing is the industry’s ability to act on it. He laments that while Germany possesses world-class expertise across the entire solar production chain, that knowledge isn’t being translated into market-ready products.

This sentiment is echoed by Carsten Körnig, managing director of the German Solar Industry Association. He notes that Germany has the largest solar market in Europe, and believes it’s time the country reclaimed a bigger share of that market. The association plans to push the new federal government to implement policies that would boost domestic production — something it says has been lacking so far.

Human Rights Concerns in Chinese Supply Chains

Rebuilding Europe’s solar manufacturing capacity also makes sense from a human rights perspective. There is little transparency around working conditions in Chinese solar factories, especially those located in regions inhabited by the oppressed Uyghur minority. Because of these concerns, access to production sites is highly restricted — a growing ethical dilemma for European buyers dependent on Chinese imports.

In light of all this, the solar industry in Germany and across Europe finds itself at a turning point. While growth continues, the path forward demands not only innovation and quality but also strategic policymaking and ethical supply chains.