What prompted the tremendous demand for photovoltaic systems we have experienced in the past few years?

Photovoltaics have proven to be the most-cost effective way of producing electricity, especially in the sunnier parts of the world, so today we are seeing rates of below 2 cents per kilowatt hour production cost. Being cheaper than atomic energy, wind or biomass, solar power is a real game changer in the industry. Moreover, it is a long-lasting technology that does not need too much manpower to manage the plant and the initial investment is smaller than other renewable sources. This new increase in demand cannot be met with just 30,000 skilled workers in the German installation trades - compared to around 200,000 ten years ago. We need to look at how we can recruit more talent to sustain investment. 

In which way is the supply chain issue affecting your productivity and your plans to double production?

The supply chain represents a massive challenge across the industry, seen in our annual reports where we have a much higher order intake than actual sales. All these hiccups are caused by transportation issues on one hand and the microprocessors crisis on the other hand. The manufacturers are overwhelmed by this increasing demand and Europe is in the middle of a hassle where many producers are American companies (e.g., Intel) but their pre-production is based in Taiwan, South Korea or China. As a result, it is very difficult to put the order intake into revenues as quickly as our competitors in Asia.

How much endorsement is solar energy receiving from the political environment?

The fact that we are able to have meaningful discussions with political leaders is extremely useful, because this communication line was not open to our requests a few years ago. However, these discussions do not, of course, lead immediately to tangible measures, but are of a long-term nature. We are almost 90% dependent on China for PV system components. So if some geopolitical disturbances were to happen (besides the war in Ukraine), the rate at which PVs are implemented in Europe would have much to suffer.

Besides these, cyber security is yet another factor we should take into consideration since all the systems used to distribute solar power can be shut down from the exterior.

We are focusing on getting the benefits of European design and production across the political agenda, but at the moment we are stuck in the middle since we do not have policies that incentivize local production. In order to double our capacity, we are building a factory in Hessia with a special focus on in-house development and operation that will ultimately offer opportunities to the local community. Importing assemblies and other technical elements still remains a piece of the production chain, but we hope to be backed up more by our governments.

Connectivity and storage are crucial points of the energy transition, in which way can these challenges be mitigated?

E-mobility and photovoltaics are the key drivers of the energy transition.

We expect massive growth worldwide in this area over the next few years and aligned our strategy to this very early on. In the future, the main focus will be on sector coupling, i.e. the interconnection of the various applications. Here, we at SMA have unique competencies to meet these requirements. Our goal is to manage the high level of complexity in the system in the best possible way to provide customers with a user-friendly experience tailored to their needs. This includes plug-and-play approaches as well as quick and easy installation.

What are your main ambitions for the next five years?

Many markets, Germany included, are looking at four or five times the volume that we have right now. We have achieved about 5 GW of new installed capacity per year in the last two years and expect to add around 20 GW per year in the coming years., We will continue to focus on offering comprehensive plug & play systems that give our customers maximum independence in their use of clean energy. In terms of expanding our footprint, there are many well placed markets that we are taking into consideration, mainly in Eastern European countries.

How do you perceive global warming as a whole and do you feel like we are making progress in solving this problem?

I think there is definitely a realistic chance that we can still mitigate climate change and achieve the goal of reducing global warming by 1.5 °C if we continue at this pace. . In order to ramp up production and attract qualified workforce, the policy side needs to be in harmony with all our efforts to scale up the solar industry. All in all, we must choose our priorities right and decide if investing in renewable sources is more important than funding other industries, like e.g. car manufacturing - which uses many of the components found in PVs. We have all the pieces of the puzzle in place, but in order to really thrive, we feel the need for more political support.