Siemens buys Israel’s Solel Solar for $418 million

German giant Siemens aims to turn both itself and the world a little greener with the acquisition of one of Israel’s leading solar thermal energy companies. German electronics giant Siemens has purchased Israeli solar thermal energy company Solel Solar Systems …

German giant Siemens aims to turn both itself and the world a little greener with the acquisition of one of Israel’s leading solar thermal energy companies.

German electronics giant Siemens has purchased Israeli solar thermal energy company Solel Solar Systems for $418 million in a bid to strengthen its portfolio of renewable energy products.

Solel, which is based in Beit Shemesh, develops and builds solar thermal power plants, and is one of the world’s two leading suppliers of solar receivers – a key component in the collection of sunlight. It was founded in 1992 to commercialize and develop an advanced solar energy technology designed by Luz Solar Partners.

In the first six months of this year, the 500-employee company saw sales of almost $90 million. The company has been working in Spain since 2006, supplying key components for the country’s 15 solar thermal power plants, which have a combined capacity of 750 megawatts.

The company is also active in the US. In 2007, it signed a deal with Pacific Gas and Electric Company to build a 553 megawatt solar plant in California’s Mojave Desert. The plant is expected to be fully operational in 2011, and will cover up to 6,000 acres of the Mojave Desert.

A second solar acquisition in Israel

This is Siemens’ second acquisition in the field of solar energy in Israel. In August, the company bought 40 percent of three-year-old Arava Power Company for $15 million.

Arava Power, which is based in Kibbutz Ketura, is a leader in photovoltaic systems for the generation of electricity.

Siemens plans to use its acquisition of Solel to continue its expansion of environmentally friendly technologies. It is believed that the company will use Solel technology in the $555 billion Desertec project in the Sahara Desert, to bring electricity to European homes.

“After the rapid and highly successful expansion of our wind power business, we now want to continue this success story in the solar sector,” said Peter Löscher, president and CEO of Siemens. “With the acquisition of Solel, Siemens can now strengthen its market position in the promising business of solar thermal power plants. We can thus further expand our extensive environmental portfolio – and, as already announced, we will become even greener.”

“Siemens and Solel are a perfect match,” added René Umlauft, CEO of Siemens’ Renewable Energy Division. “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.

Double digit growth rates

“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,” he added.

Siemens, which plans to keep Solel’s Israel facilities open, is acquiring Solel from Ecofin, a London-based investment house that specializes in utilities and infrastructure and another major shareholder, whose name has not been disclosed. The deal is expected to be finalized by the end of the year.

The solar energy market is growing rapidly. By 2020, the market for solar thermal power plants is expected to show annual double-digit growth rates. The largest growth will be in the US, South Africa, Australia, Spain, India, North Africa and the Middle East.

Solel has been negotiating with Siemens for some months and is also believed to have been in talks with the companies Areva and Alstrom.

Avi Brenmiller, CEO of Solel said that he believes Siemens’ acquisition of his company will help accelerate the use of solar energy. “Combined with Siemens’ financial strength and its global sales and marketing activities, this will open up promising prospects for our business and hence also for all of Solel’s employees,” he said.

About Nicky Blackburn

Editor and Israel Director, Nicky Blackburn has worked extensively as a journalist and editor both in Britain and Israel for a range of national and international publications including The Cambridge Evening News, London News, Travel Weekly, Israel High Tech Investor, and The Times of London. She was the Associate Editor at LINK Israel’s Business and Technology Magazine, and the High-Tech Correspondent for The Jerusalem Post.