Meyer Burger to raise $165m for European solar panel manufacturing move

Business news |
By Nick Flaherty

Swiss solar panel equipment maker Meyer Burger Technology is planning to raise CHF165m ($165m, E155m) to move into manufacturing in a move it likens to the shift from 4G to 5G mobile phone technology..

Following its restructuring and a board room battle with investors, the company last month said it was looking at building a manufacturing plant in Germany to make panels with the own equipment, rather than selling the equipment to other companies.

It is now actively looking to buy existing solar panel production lines, potentially from former partners in Germany as deals unravel. The company has sold its equipment to the REC group and UK perovskite solar panel maker Oxford PV as well as silicon solar panel maker Panasonic.  

The reason for this fundamental change of direction is the realization that the company has not been able to generate profits from its technological leadership in recent years. This rankles with the board, as Meyer Burger’s technology has shaped the development of photovoltaics along the entire value chain and has set the industry’s essential standards, such as the diamond wire saw technology, PERC technology and precision measurement technology for solar modules.

A large proportion of the solar modules produced world-wide today are based on technologies developed by Meyer Burger but by selling its production equipment, the company says it relinquished control of its technology and largely left the value creation, and profits, to its customers.

It says it now want to keep hold of the entire value chain, including sales, but not installation. It is aiming to produce PV modules primarily for roof top systems with an initial annual production capacity of 400MW.

“By transforming its business model, the Company significantly expands its value chain to achieve sustainable profits,” said the board. “In the long-term, the Company will benefit from the technology and cost leadership of its patented heterojunction SmartWire technology.”

Next: Meyer Burger deals 

“The Board of Directors has decided that Meyer Burger, as a rule, will in the future manufacture production equipment for Heterojunction/SmartWire exclusively for its own use and aims to become a leading global producer of solar cells and modules,” it said. “Consequently, the entire value chain will remain with Meyer Burger. The protection of the proprietary technology and the know-how can thus be strengthened, and future improvements of the production facilities will no longer be shared with third parties. The standard equipment and service business will be continued unchanged.”

As a result the company is abandoning a deal with German manufacturing partner the REC Group which has a 600MW production line using Meyer Burger’s latest equipment. This may open up the option of purchasing the plant as REC will not be supported with future manufacturing technology.  

It is also a major investor in perovskite tandem cell technology startup Oxford PV, and its equipment is used in a pilot production line in Germany. It is highly likely that this site will be a target for Meyer Burger. Oxford PV has raised a total of just over $150m, including $43m from Meyer Burger.

The company also has a deal with Panasonic for its equipment which is also expected to be discontinued.

“The change of our business strategy from equipment supplier to a vertically integrated cell and module manufacturer is the right and logical next step to secure an appropriate share of the value pool that our globally leading technology generates,”  said Franz Richter, the new Chairman of the Board of Directors of Meyer Burger Technology.

Agreement for the deal has to come from an Extraordinary General Meeting to be held in early July.

Meyer Burger expects to save significant time and economic resources by acquiring existing production sites in Germany to start production in the first half of 2021 and to expand it in the following years.

The company says it has already secured several letters of intent from potential customers in Europe and the US to purchase a total over 2 GW of cells and modules per year.

“The next technological step is comparable to the transition from 4G to 5G in mobile communications, only Meyer Burger has brought the 5G technology of the PV industry to market maturity,” said new CEO Gunter Erfurt. “We can be in the market with our products within just one year. Our manufacturing in Europe is competitive and offers a significant profit potential”.

Production will increase to 1.4 GW of cell and 0.8 GW of module production by the beginning of 2022 by raising a further CHF 180m ($180m).

In the longer term, the Company aims to expand annual production capacity to at least 5 GW with additional module production facilities in Europe and North America which shall be supplied from a central cell production. Meyer Burger then also expects to gradually increase its market share in the utility-scale segment.

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