July 26 (Bloomberg) -- Siemens AG said it’s making changes at its solar-energy business after it lost money because of cancellations from customers and support from European governments flagged.
Siemens, which built a solar-thermal power plant in Lebrija, Spain, is suffering from “major cancellations that have grown enormously” as countries with high solar radiation are cash-strapped, Chief Financial Officer Joe Kaeser said today during a call with reporters. He didn’t detail the nature of the changes, which he said were a realignment.
“The solar business in general, and at Siemens in particular, didn’t turn out to deliver what we hoped for and what has been expected, so there has to be some material realignment in that sector,” Kaeser said. “We have started that already in the second quarter, and that will continue.”
The changes are part of a broader cost cutting program announced by Siemens to make the company more “lean, fast and agile,” Chief Executive Officer Peter Loescher said today. The company is still working on details of that program and will make an announcement after the annual meeting of senior managers later this year.
Siemens, General Electric Co. and Areva SA acquired stakes in the last three years in solar-thermal equipment makers, backing a technology valued for its ability to store and supply power around the clock unlike photovoltaic, or PV, panels which directly convert sunlight into electricity. In the U.S., developers have ditched solar-thermal for photovoltaic panels whose prices fell 51 percent last year.
Siemens bought Solel Solar Systems for $418 million in 2009 to boost the solar thermal power business. It booked charges of more than $300 million at the unit two years later.
The acquisition was followed by austerity programs in countries that are suitable for the technology, such as Greece, Italy and Spain, as governments fight sprawling national debt.
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