Engineering giant Siemens ( IW 1000/34) said on Monday it is pulling the plug on its activities in solar energy owing to cut-throat competition and waning public subsidies.
Siemens said it "plans to divest its solar business activities and is currently holding talks with potential buyers on this subject."
It would instead focus its renewable energy activities on wind and hydro power, said the group, which previously boasted it plans to become a champion of "green" energy.
"The energy division will be slimmed down and the Solar and Hydro Division will be discontinued," it said, adding that the Solar and Hydro Division generated revenue "in the low triple-digit millions" in the business year ended September 30, 2012 and has "roughly 800 employees."
Siemens explained that the solar business had not been so profitable as hoped.
"Due to the changed framework conditions, lower growth and strong price pressure in the solar markets, the company's expectations for its solar energy activities have not been met," it said.
The global market for concentrated solar power had shrunk from four gigawatts to slightly more than one gigawatt, it explained.
In future, the renewable energy business would focus on hydro power and wind energy and the overall energy sector "will comprise the divisions of fossil power generation; wind power; oil and gas and power transmission," Siemens said.
"Solar energy does not form one of Siemens' core businesses. Growth in this area has deteriorated in recent years and it made no sense for them to remain active there," said Commerzbank analyst, Ingo-Martin Schachel.
Siemens' move comes as a further blow to Europe's ailing solar energy sector which faces ferocious competition from companies in China and a gradual reduction for public subsidies for solar energy technology.
In recent months, a number of technology companies, such as Q-Cells, Centrotherm and Solarwatt have all gone bust or run into severe difficulty.
"In photovoltaic technolgy, competition from Chinese firms is proving a headache. In the area of solar thermal energy, the market isn't ready for it yet. There's not enough demand," said Commerzbank analyst Schachel.
"The problem is that where there is sun, there's no money. In fact, the opposite is the case," Siemens' finance chief Joe Kaeser said in July.
Copyright Agence France-Presse, 2012
