Brussels, 14 December 2010
State aid: Commission clears €15.5 million aid for Sovello's third solar modules plant in Bitterfeld-Wolfen, Germany
The European Commission has authorised €15.5 million of regional investment aid for the German company Sovello AG for the production of solar modules in Bitterfeld-Wolfen (Sachsen-Anhalt), Germany. The project involves an investment of €147 million and is expected to create at least 320 new jobs in the region. Germany limited the aid amount to the maximum allowable under EU state aid rules, taking account of aid granted to a previous investment project by Sovello. The Commission found the measure to be compatible with the requirements of the Regional Aid Guidelines 2007-2013 (see IP/05/1653), and in particular with their rules on large investment projects. The Commission concluded that, on balance, the positive effects of the investment on regional development outweigh potential distortions of competition induced by the aid.
Sovello manufactures solar modules based on the String-Ribbon technology. Solar modules convert sunlight into electricity. Set up in 2005 as a joint venture by manufacturing companies active in the photovoltaic sector, Sovello was sold in 2010 to a venture capital company (Ventizz Capital Fund IV, the fourth fund of Ventizz Capital Partners).
The investment project takes place in Bitterfeld-Wolfen (Thalheim, Sachsen-Anhalt), Germany, an area eligible for aid under Article 107(3)(a) of the EU Treaty as a region with an abnormally low standard of living and high unemployment.
Sovello already has two solar module production plants in Bitterfeld-Wolfen (Sovello1 and Sovello2), for which it received regional aid. The new investment comprises the extension of the existing production site through the construction of a third plant (Sovello3) on adjacent land. The project started in November 2007 and will be completed by end 2010. The investment costs are €147 million, while the aid amounts to €15.5 million.
The Commission verified whether the notified aid is fully in line with the Regional Aid Guidelines, in particular with their thresholds regarding the market share and production capacity of beneficiaries of aid for large regional investment projects. The guidelines also foresee a progressive reduction of the regional aid ceiling for large projects, because these suffer less from typical regional handicaps than smaller projects.
The Commission calculated that Sovello's market shares on the world market for solar modules are well below 25% before and after the investment. As the photovoltaic market has a double-digit growth rate, which is fairly above the EEA growth rate, the Commission also concluded that the additional production capacity created by the project would not raise concerns. As these thresholds are not exceeded, the Commission concluded that the positive impact of the investment on regional development outweighs the potential distortions of competition.
The non-confidential version of the decision will be made available under the case number N237/2010 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.