German conglomerate Robert Bosch has outlined plans to close its solar energy operations by early 2014 following €1bn in losses for the 2012 financial year.
The company has claimed that the price pressures in the solar market have culminated into a difficult trading environment, forcing the company to rethink of its presence.
Bosch is also keen to offload its manufacturing unit with plans to halt production by early next year.
Commenting on the developments chairman Dr. Volkmar Denner stated that given the unrelenting market changes, the company was not confident of possible improvement in the sector.
"Even though we reduced our manufacturing costs significantly in 2012, it wasn’t enough to compensate for the fall in prices of up to 40 percent.
"Nearly the entire solar industry is currently deep in the red worldwide," elaborated Denner.
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By GlobalDataThe company however added that it had considered various possibilities to revive its business – such as technological advances, additional ways of reducing costs, as well as possible partnerships.
"However, none of these possibilities offered a solution that would be economically viable over the long term," added Denner.
The company’s cumulative losses since foraying into the solar industry in 2008, stood at €2.4bn, including €1.6bn in impairments.
Bosch supervisory board chairman Franz Fehrenbach noted, "I have always said that there cannot be cross-financing of the Solar Energy division forever. We have very different conditions today than we did in 2008."
"We remain convinced that renewable energy – including photovoltaics – will play an important role in the energy mix of the future.
"Nevertheless, given the situation we’re in and the changed market environment, we are no longer competitive in this area," concluded Fehrenbach.
The closure of solar business is likely to cost 3,000 jobs which the company has assured will be transferred to other Bosch units.
