A large solar park in India/Angle
Despite the sunny winter - the Israeli solar energy companies are not able to drive their return to the markets and the weight of the costs that will allow them to be easier for the rest of the way.
One of the examples is that of the Israeli solar energy technology company Solaredge, which announced today (Sunday) the layoffs of approximately 900 of its employees worldwide, of which approximately 550 are Israeli employees.
The majority of those laid off (55.5%) are production workers at the company's facilities around the world, and all those laid off make up about 16% of Solaredge's global workforce.
The company's layoffs in Israel come both from the company's headquarters in Herzliya and from the company's factory in the Tziporit industrial area in the Galilee landscape.
The company reports that the workforce reduction "is being carried out in continuation of the steps already taken by the company in order to prepare for the changing market conditions, including the closing of the production plant in Mexico, the reduction of production in China, and the closing of the activity in the field of commercial electric vehicles. More details will be provided in the company's quarterly report."
The purpose of the reduction, according to the company, is to lower operating costs and adapt them to current market trends.
Solar roof.
The high financing costs in setting up solar projects makes the field unprofitable/FA energy
Zvi Lando, CEO of Solarage: "The decision we made is difficult, but necessary, in order to adapt our cost structure to the rapidly changing market situation.
We make great efforts to treat our departing colleagues with the respect they deserve, especially in the complex times we are in.
"Even now, we are confident in the continued growth of the renewable energy market in the long term and about our leading position in this field. The current changes will not affect the company's vision and strategic direction."
The announcement by SolarEdge, which manufactures solar inverters and is traded on the US Nasdaq stock exchange worth $3.9 billion, does not come in a vacuum.
The field of solar energy has been suffering for the last year and a half from the lack of demand due to the unviability of setting up solar projects in light of high financing costs, created by the trend of rising interest rates.
Solaredge, which became the Israeli star of Nasdaq in August 2022, when it rose to a value of about 20 billion dollars and became the largest Israeli company on Wall Street, experienced an even harder blow from investors than the solar energy companies that purchase its products since then, and its stock fell by about 81% from the record price it reached during 2021.
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Roi Shavit, technology and renewable energy analyst at the IBI/Ilan Bashor investment house
Roi Shavit, technology and renewable energy analyst at the IBI investment house, explains: "The green energy conversion technology providers, including Solaredge, continue to be in trouble even with the beginning of 2024, since the solar energy companies are not purchasing the converters at the same rate as they purchased it until the beginning of 2022 Around that time, the trend of interest rate increases began.
"Those solar energy companies working to establish a solar electricity infrastructure found themselves stuck with a stock of converters that they purchased as advance supplies for the projects they were about to establish, and which due to the increase in interest rates became unviable for establishment at this time.
Although the interest rate is currently on a downward trend, it is still high and continues to affect the viability of the projects.
"This created a situation in which the future demand for converters decreased significantly, and the technology itself did not undergo a significant change that would cause entrepreneurs to purchase new converters instead of what they were stuck with.
"In addition, it must be remembered that the forecast for 2024 is still low for the activity of the green and solar energy companies in particular, but It must be remembered that the interest rate this year is on the decline, and as soon as the interest rate drops to such a level that leads to the return of demand, their situation can very quickly turn around."
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