By Andrew McCathie Jun 14, 2007, 4:19 GMT
Freiberg, Germany - Lying in the middle of what was once communist East Germany and shrouded for months under a leaden grey wintry sky, the small 800-year-old town of Freiberg would appear to be an unlikely new centre for the burgeoning global solar energy industry.
But more than 17 years after a popular uprising swept away the Soviet-backed East German state, a network of wind energy farms and new alternative energy companies have been springing up around Freiberg.
'Freiberg has gone from a mining town to a high-tech town,' said Freiberg's Mayor Uta Rensch with the town's business tax revenue doubling in recent years to 22 million euros (30 million dollars) and employers reporting a shortage of skilled workers as new jobs are created.
The winding back of the region's once key mining industry combined with lavish government handouts for renewable energy and low-cost highly skilled workers have helped to set the stage the rapid development of the alternative power sector in eastern Germany.
'Between Saxony, Thuringia, Saxon-Anhalt and more recently Brandenburg (states comprising Germany's east) there is the highest concentration of solar companies in the whole world,' said Carsten Koernig, chief executive of Germany's Federation of Solar Industry.
Already more than half the German solar power industry's total yearly turnover of about three billion euros is derived from the eastern part of the country, which is also home to the world's biggest solar energy plant.
The result has been that eastern Germany is beginning to take on a leading role in developing the technical know-how in renewable energy with a key part of the business success of the region's alternative power companies underpinned by exports and foreign orders, including increasingly from Asia.
Moreover, Germany's sun-power industry has emerged as a new source of jobs with Koernig saying Tuesday he expecting the number people employed in the sector to double over the next five years to about 90,000.
In the meantime, underscoring the positive outlook for the industry, 15 new solar factories are planned to open in the coming 12 months.
The push to develop new energy-efficient fuels in eastern Germany represents the latest stage in Germany's green revolution, which began almost 30 years ago when it launched a comprehensive recycling system.
But coming against the backdrop of the search for alternative fuels in wake of soaring oil prices and the push towards reductions in CO2 emissions, it has also opened up new chances for the nation's economically hard-pressed former communist east.
The move to boost the renewable energy sector has helped eastern Germany to finally start to emerge from the economic gloom since the collapse of communism in 1989.
But companies in the region claim that the amount of sunshine during the other parts of the year helps to offset any downturn in output during winter. Located on Freiberg's outskirts, Deutsche Solar AG, which derives about eight per cent of its revenue from the Asian- Pacific region, hopes to produce 12 per cent of the world's solar wafers by 2008.
At the same time, Europe's biggest solar energy group Hamburg- based Conergy AG is spending about 250 million euros transforming a defunct chipmaking factory on the east German-Polish border into what the company said will be the world's first mass volume solar wafer facility.
Construction is also underway on turning a former Soviet air base near Leipzig into a 132 million euros sun power plant, which will be one of the world's biggest solar plants.
In addition the booming global solar energy business has resulted in Germany's new sun power companies turning strong financial numbers with Berlin-based Solan AG reporting 72-per-cent surge in sales last year and ersol Solar Energy AG saying sales doubled in 2006.
Asia, in particular, has emerged as a key new market for the German solar sector. Asia's renewable energy sector is expected to grow by more than 30 per cent a year as the region's fast-paced economic growth underpins its strong energy demand.
Last month Conergy, which predicts that the global renewable energy market will be worth 225 billion euros by 2015, opened an office in Shanghai as part of its efforts to cash in on China's burgeoning alternative energy market.
This followed Conergy and its offshoots setting up operations in India, South Korea, and Singapore in the past three years. Last week it launched an office in Thailand.
But public funds remain key to the fortunes of the renewable energy sector in Germany with money from the European Union also helping to finance its development.
At the same time, those in Germany paying out about 4,600 euros for a solar energy system can expect to receive about 500 euros back annually from their power company over 20 years.
What is more the renewable power sector is becoming increasingly confident about its potential globally competitiveness.
The German solar industry is expecting prices for solar systems to fall, declining between five and six per cent this year.
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