Solarstrom announces major project collapse
S.A.G. Solarstrom AG has not reached agreement in the contract negotiations with an international energy company regarding the implementation of a project pipeline in the three-digit MWp range for 2013 and 2014.The international company is said to be part of a UK project the company was working towards. In S.A.G. Solarstrom AG's opinion, the negotiations have failed. This was due to the financial deposits required for these projects from S.A.G. Solarstrom AG in the form of down payment and performance bonds before the start of the projects as well as warranty guarantees after completion of the projects.
A Solarstom spokesperson has admitted the company was not prepared to put up the large investment required for the project go ahead. They felt the margins in the changing UK solar market no longer suggested the financial returns they bargained for.
S.A.G. Solarstrom AG will critically review the business area Plant Construction in the face of this result. The guarantees and warranties which are increasingly required on the market can amount to payments of up to 20% of the project volume before the start of the project and up to 10% after completion of the project, representing a disproportionately high capital commitment for the company. In many projects, this capital commitment is no longer proportionate to the achievable margin, taking into account the risks of large-scale projects.