Thin film crowd prompts merger of Sunfilm with Q-Cells subsidiary

Two German solar module makers said today they plan to merge to create one of the world's largest producers of thin film silicon solar modules in order to compete in the crowded market.

Grossroehrsdorf, Germany's Sunfilm announced the news with Sontor, a wholly-owned subsidiary of Thalheim, Germany's Q-Cells (XETRA: QCE.DE). The new venture, called Sunfilm AG, is expected to have production sites in Grossroehrsdorf and Bitterfeld-Wolfen, and research and development in Bitterfeld-Wolfen.

Sunfilm brings 85 megawatts of peak production capacity from its two facilities in Bitterfeld-Wolfen and Grossroehrsdorf, with an additional 60 MWp of capacity under construction in Grossroehrsdor. Sontor is ramping its 24 MWp facility, which produced 3.6 MWp of modules in 2008. That facility is in Solar Valley Thalheim, a sector of Bitterfeld-Wolfen.

The companies said the merger would provide cost savings, economies of scale, and joint research and development. The merger is subject to approval and expected to close by the end of May.

The new company is to be 50-percent owned by Q-Cells, while Sunfilm shareholders Good Energies and NorSun plan to hold 35 percent and 15 percent, respectively, of the new company.

The companies noted that Sunfilm AG's production capacity will allow it to take advantage of economies of scale, helping its positioning in "an increasingly crowded market," according to a statement. Thin film solar is one of the cleantech sectors most cited as facing consolidation because of the number of players (see Record 2008 for cleantech with $8.4B in investments and Oerlikon aims to streamline thin-film solar).

In February, Sunfilm was one of two solar power companies in Germany to receive aid from the European Commission, netting €56 million ($70.2 million) for the production of thin-film solar modules of Saxony (see Biopesticides make a killing this week).