Manpower shortage dims solar panel boom in Germany

Germany is racing to meet its climate goals and massively expand renewable energy sources like wind and solar. But is a lack of skilled labour standing in the way of its ambition?

Solar power company Enpal trainee
Solar power company Enpal trainee Milan Alexander. Photo: Odd ANDERSEN / AFP

Balancing on a sloping tiled roof, apprentice Pascal Ode installs a solar panel under the watchful eye of his trainer.

Hopes are high that Ode may soon be able to install the systems on both homes and businesses.

When he is trained, he will be a much-needed new pair of hands in the industry that is crucial to Germany’s energy transition — but is suffering from an acute worker shortage.

Demand for new photovoltaic panels soared as Europe’s biggest economy was forced to ramp up the share of energy produced by renewables in the wake of Russia’s invasion of Ukraine which hit energy supplies, lifting prices.

The conflict has led Germany to end its reliance on Russian energy, at a time when the country was also accelerating its plan to become carbon neutral.

Compared with 2021, the installed photovoltaic capacity in the residential sector has leapt by 40 percent.

“Since the Russian invasion of Ukraine, many people wanted to free themselves from fossil energy and the high costs of energy,” said Wolfgang Gruendinger, spokesman for Enpal, one of many companies benefitting from soaring demand.

The Berlin start-up offers long-term solar panel rentals, complete with installation and maintenance.

The formula is proving attractive. Enpal, which began business in 2017, said it has rented 40,000 kits to individuals, including 18,000 last year alone.

It currently installs 2,000 kits a month.

“Demand is very strong. We have to install many units in the shortest possible time, while at the same time, we are seeing huge shortages in qualified workers,” said Alexander Friedrich, who was hired by the company to train new employees.

To cope with the demand, Enpal set up its own training school last year in Blankenfelde, in the south of Berlin, to train workers to install panels, as well as train specialised electricians to work on photovoltaic panels.

“We are recruiting people from all backgrounds — former pizza workers, cooks, delivery riders, taxi drivers,” said Gruendinger.

The company puts about 100 new hires through the school each month.

Among them is Ode, 19, who responded to an advertisement on Instagram offering the four-week training.

READ ALSO: Can German homeowners expect high renovation costs under new EU law?

‘Something new’

Learning “something new” had attracted him to take on the challenge, he told AFP.

“I really enjoy the fact that it is a job that comes with fresh air and that you’re always on the road,” he added.

Enpal does not have prohibitive education criteria for their new hires. But one key requirement is for new recruits to climb a high ladder reaching at least two storeys up to screen out those with a fear of heights.

The sound of drills, screwdrivers and metal components being handled by groups of apprentices reverberated around the training hangar.

Wearing helmets and attached to ropes, the trainees were practising on roof replicas mounted on the ground.

Solar panel installation Germany

Trainees install solar panels at the solar power company Enpal’s training facility in Blankenfelde: Photo: Odd ANDERSEN / AFP

Their task is urgent.

Germany is aiming for 80 percent of its energy needs to be covered by renewables by 2030, against 46 percent a year ago.

To do so, lawmakers have set a target of installing 215 gigawatts (GW) of photovoltaic capacity by 2030 — meaning that annual rate of installation has to be tripled from last year’s effort of 7.2 GW.

The plan is for roofs of factories and commercial buildings, as well as fields, to be covered with them, according to draft legislation promoting their installation.

But “the shortage of qualified workers threatens to slow down the energy transition”, warned the Cologne-based think-tank German Economic Institute (IW) in a recent report.

The worker gap is so wide that the Federation of Solar Industries BSW said it was looking to Chancellor Olaf Scholz’s ambitious immigration reform to provide some relief.

READ ALSO: EXPLAINED: Why Berlin is voting on going climate neutral by 2030

The law, expected to be passed this year, is aimed at easing immigration issues.

The BSW cites the example of a recent agreement that aims to attract Indian workers trained in solar energy installations.

IW estimates that there is a shortfall of 216,000 electricians, heating and air-conditioning experts, and IT specialists necessary to develop the solar and wind energy sector in Germany.

The figure does not take into account plans to bring back production of solar panels to Germany.

Bring production back

Currently, 80 percent of the panels’ components come from China, according to the International Energy Agency.

The massive reliance on the Asian giant for the supply chain for materials such as polysilicon, wafers, cells and modules has come to the fore for Germany after it was recently stung by its dependency on Russian energy.

Once a leader in producing photovoltaic cells, with market heavyweights in the 2000s like Solarworld, Q-Cells and Centrotherm, Germany has seen its market share plunge after state subsidies dried up and China ramped up its production.

Over the past two decades, some 100,000 jobs in the sector have been lost.

But the trend may be starting to reverse.

Swiss specialist in the sector, Meyer Burger, built a factory at Thalheim, east Germany, in 2021, spurred by lower production costs and growing homegrown demand.

By Sophie Makris

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Why people in Germany are being advised to switch energy suppliers

As energy prices continue to fall in Germany, experts are advising people to consider switching supplier to get a better deal.

Why people in Germany are being advised to switch energy suppliers

What’s happening?

After Russia’s invasion of Ukraine in February 2022, energy prices reached record highs, causing misery for consumers in Germany. 

But in the last few months, the cost of gas and electricity has been falling. In fact, March was the first month since the start of the war where energy prices were below the cost from the same period last year.

At the moment many suppliers are lowering their prices for electricity and gas, and consumer protection groups are recommending that households check their contracts, compare prices and change suppliers if necessary.

“Household electricity prices for new customers have fallen continuously since December 2022,” said electricity market expert Mirko Schlossarczyk from the consultancy Enervis. Current offers are below 30 cents per kilowatt hour, he added.

“For existing customers and those receiving the basic (default) supply, however, the price level is still noticeably higher and is currently a little over 40 cents (per kilowatt hour).” These prices have only fallen slightly in recent months, Schlossarcyzk said.

Why have prices been falling?

The coalition government’s energy price caps account have helped to bring costs down. 

The electricity price brake  – which caps electricity costs for households and small businesses with a yearly demand of up to 30,000-kilowatt hours at 40 cents per kilowatt hour – has been applied to all electricity customers in Germany since January this year. 

The gas price brake – which caps prices at 12 cents per kilowatt hour – started in March 2023 and retroactively covers the months of January and February.

READ ALSO: Why consumers in Germany are seeing their energy costs go down

For the remaining usage, the regular market price has to be paid by households – and costs there have been going down significantly.

According to Schlossarczyk, the main reason for the decline in consumer electricity prices is the significant drop in wholesale prices.

A one-euro coin stands between the flames of a gas-powered cooker.

A one-euro coin stands between the flames of a gas-powered cooker. Photo: picture alliance / dpa | Holger Hollemann

However, many consumers haven’t yet benefited from the lower market prices for gas and electricity, as they are still being supplied with energy that suppliers bought at higher prices last year.

When it comes to electricity, 76 percent of electricity tariffs in the basic supply sector – in other words, the suppliers that have the most customers in a certain region – are still above the electricity price brake in some cases despite reductions, according to the comparison portal Check24. 

In the alternative supply, 88 percent of the tariffs are cheaper than the price brake, said a spokesperson.

With an annual consumption of 5,000 kilowatt hours, new customers currently pay an average of 31.4 cents per kilowatt hour. In the basic supply, on the other hand, it stands at an average of 43.2 cents. For comparison – according to the German Energy Association BDEW, the average electricity price in Germany was just under 32 cents in June 2021.

But the basic supplies aren’t immune to the downwards spiral in prices. According to a spokesperson, the comparison portal Verivox sees “a clear trend towards price reductions at present”.

For the months of June, July and August, the portal has so far registered 94 electricity price reductions averaging a 12 percent drop, although there are also a few increases. 

For the coming months, Schlossarczyk expects prices of 28 to 30 cents per kilowatt hour for new customers. For existing customer contracts and people receiving the basic supply he expects some noticeable price reductions.

What’s happening with gas prices?

According to Verivox, gas prices are also declining significantly.

In the basic supply sector, the portal has so far registered 75 price reductions by an average of 17 percent for June, July and August. Nine suppliers have announced increases averaging 9 percent.

Check24 has registered 106 gas price reductions of the basic supply since January. Despite these reductions, 90 percent of the gas tariffs in the basic supply are still above the gas price brake, the company reports.

A person in Germany holds cash. The government has pledged to clamp down on gas prices.

A person in Germany holds cash. The government is clamping down on gas prices with a gas price break. Photo: picture alliance/dpa | Lino Mirgeler

On average, consumers there were paying 13.3 cents per kilowatt hour of gas. In contrast, 80 percent of the tariffs in the alternative supply are already cheaper than the price brake. Check24 puts the average at 9.4 cents.

According to BDEW, the average gas price in Germany in June 2021, i.e. before the energy crisis began, was 6 cents per kilowatt hour.

What do consumer experts say about the energy price development?

They say that customers in Germany should take action if they can.

“We recommend switching suppliers,” said Christina Wallraf, energy expert at the Consumer Advice Centre in North Rhine-Westphalia.

The prices for new customers are “quite acceptable again”.

Those who want to switch should examine their existing contract, said Wallraf, adding that it is important to find out the remaining term and the notice period in order to work out the right time for a change of supplier.

“If you are currently in the basic supply, the contract can be terminated at any time, taking into account the statutory two-week notice period,” she said.

The consumer advice centre also suggests using comparison portals to make an individual adjustment before making a tariff comparison.

READ ALSO: How to change electricity and gas suppliers in Germany 

For example, the filter “direct switching option via the portal” should be set to display as many tariffs as possible.

Consumers should also make sure that prices are guaranteed in the contract in case case energy prices rise again in the coming winter.

The centre also advises consumers to do an internet search on the company to check if they have positive or negative reviews from previous customers. 

Could energy prices go through the roof again this winter?

Energy market expert Schlossarczyk thinks that is unlikely.

“Due to the price cap in the end customer price segment alone, the burden limit for household customers is capped until April 2024,” he said.

He predicted that there wouldn’t be a price explosion for household customers in the coming autumn and winter.