Engineering giants buy their way into booming solar market

Two of the world's largest engineering giants, German conglomerate Siemens and US powerhouse General Electric (GE), have both underlined their commitment to the renewable energy sector this week after shelling out to acquire two high-profile Israeli solar energy firms.

Siemens announced yesterday that it is to acquire solar thermal power firm Solel Solar Systems in a deal worth around $418 million. The deal is subject to regulatory approval, but Siemens said it is confident the acquisition can be completed by the end of the year.

Israel-based Solel is one of the world's leading providers of the solar receivers, essentially giant mirrors, which are used in parabolic trough solar thermal systems. The company posted sales of almost $90 million in the first six months of this year and has operations in a number of key solar thermal markets, including Spain and the US.

René Umlauft, chief executive of Siemens' Renewable Energy Division, said that with the German firm already providing steam turbines to solar thermal projects the two companies represented a "perfect match".

"We are the market leader in steam turbines for solar thermal power plants and, with the power block, we can offer a key part for solar power plants – the part that is responsible for power generation," he observed. "Solel boasts high-efficiency receiver technology and comprehensive expertise in the engineering and construction of solar fields. In the future, we’ll be able to offer the key components for the construction of parabolic trough power plants from a single source and to further enhance the efficiency of these plants."

Siemens' president and chief executive Peter Löscher said that the aim of the deal was to replicate the company's success in the wind energy market, where it is one of the largest manufacturers of turbines, in a solar thermal market that is estimated to be worth €20 billion a year by 2020.

The company has established itself as a major advocate of solar thermal energy in recent years, and is a member of the Desertec coalition of German blue chip firms that is exploring the development of large scale solar farms in North Africa that could then export energy to Europe.

The move comes just a day after Siemens' arch rival, GE, announced it has spent an undisclosed sum as part of a $23 million funding round for Israeli solar start- up SolarEdge.

The company provides an automated management system for photovoltaic solar panel arrays designed to ensure each panel is able to maximise its power output. It provided scant details of how it intended to use the new funding, announcing only that it would be used to help further develop its technology.

The deal came as GE also stumped up an undisclosed sum for a stake in US smart grid firm Tendril and announced that is was aiming to boost its investment in renewable energy generation from the current level of $4 billion to $6 billion by the end of 2010.