Companies and governments have taken a deep dive into alternative energy later to determine profitability is not possible. Further, understanding that an industry succeeds as the cost of materials fall. One may ask what feasibility was performed and under what pressure were the results scrutinized. The issue among the intelligence age is the comfort companies have with their good ole’ relationships that report the data companies want to hear while performing feasibility in a vacuum versus placing muscle on structure of the analyses to test its rigor. The story “Bosch Shuts Down Solar Business, Suffers Steep Losses” from Forbes is a result of wanting big when the market says moves in steps.
“Bosch, the multinational engineering and electronics conglomerate based in Gerlingen, Germany, is pulling the plug on its solar energy business. Bosch Solar Energy has struggled to compete in crystalline photovoltaics amid a global supply glut that has depressed solar PV module prices. Bosch said it would unwind the solar power venture and shut down manufacturing ingots, wafers, cells and modules in early 2014. Bosch’s total potential losses in the solar space have been estimated to be as high as $3.1 billion, according to PV Tech.”
“In an interview (quoted at length below) in BoschZünderOnline, Bosch board members, Franz Fehrenbach and Dr. Volkmar Denner, explained the rationale for shutting down the solar business, which will ultimately result in an estimated 3,000 layoffs.”
Denner offered, “last year, we sustained a loss of one billion euros. Changing market conditions mean that we couldn’t see any chance of a lasting improvement. We couldn’t offset such enormous and unrelenting price pressure in a market that is becoming ever more difficult. Even though we reduced our manufacturing costs significantly in 2012, it wasn’t enough to compensate for the fall in prices of up to 40 percent. Nearly the entire solar industry is currently deep in the red worldwide.”
Further, “last year, Bosch comprehensively examined every aspect of its solar business. We considered the latest technological advances, additional ways of reducing costs, as well as possible partnerships. However, none of these possibilities offered a solution that would be economically viable over the long term.”
We work and live in a “Big Data” world yet, most of the data is unstructured and needs curation. Companies that continue to manage based on the size of purse strings and the expansiveness of their carbon footprint but fail to recognize data and business intelligence are not tactical. The role of energy puzzle is to invest in data capturing and models that aggregate information considering culture, ecosystem, trends and capacity for right-fit steps in developing business units. The task of leaders and professionals are to recognize the world is changing and that companies that are big can fail and fail forward.
We hope that the willingness for Bosch to move away for solar will not trigger others to run. The harsh reality it is hard to compete with China’s model of production.