Brussels, 23 March 2011
State aid: Commission clears €18.75 million aid for Solar Factory's third solar modules plant in Freiberg, Germany
The European Commission has authorised under EU state aid rules €18.75 million of regional investment aid for the German company Solar Factory GmbH, a subsidiary of SolarWorld AG, for the production of solar modules in Freiberg (Saxony), Germany. The project involves an investment of €75 million. The Commission found the measure to be compatible with EU rules, and in particular with the requirements of the Regional Aid Guidelines 2007-2013 (see IP/05/1653), because, on balance, the positive effects of the investment on regional development outweigh potential distortions of competition induced by the aid.
Solar Factory, a 100% subsidiary of SolarWorld AG, produces solar modules on the basis of crystalline silicon.
The investment project takes place in Freiberg (Chemnitz, Saxony), Germany, an area eligible for aid under Article 107(3)(a) of the Treaty on the Functioning of the European Union (TFEU) as a region with an abnormally low standard of living and high unemployment.
Solar Factory already operates two manufacturing facilities for solar modules in Freiberg. The new investment substantially increases the existing production capacity through the construction of a third plant (SF III) in the industrial zone Freiberg Saxonia. Works on SF III started in early 2010, and are planned to be completed in 2011.
Considered separately, the aid would not have to be notified to the Commission, because it is to be granted under existing schemes already authorised by the Commission and the aid amount does not exceed the notification threshold. It is, however, not to be excluded that the new project would form a single investment project with previous investments undertaken by the SolarWorld group in Freiberg, for the production of solar wafers (see IP/10/897), in which case the total aid granted for the combined investments would exceed the notification threshold for regional aid to large investment projects. The Commission, therefore, assessed the project under its Regional Aid Guidelines and, in particular, their specific provisions for large investment projects: as such projects suffer less from regional handicaps, the guidelines foresee reduced aid intensity and thresholds regarding the beneficiaries' market share and production capacity.
The Commission's investigation found that even if the notified project were to form a single investment project with previous SolarWorld investments, the aid to be granted would be within the thresholds of the Regional Aid Guidelines. The Commission also calculated that Solar Factory'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 between 2004 and 2009, which is well above the EEA growth rate in the same period, 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 N 365/2010 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.