Despite downturn, is German energy a model for Obama?

By Erik Kirschbaum

DRESDEN, Germany (Reuters) - Crisis? What crisis?

While the rest of the economy plunges into recession, Germany's solar power industry is full of optimism, fat order books and factories humming at full capacity -- in stark contrast to the surrounding economic gloom.

Throughout eastern Germany's "Solar Valley," manufacturers are racing to keep up with global demand for solar panels and the state-of-the-art machinery that makes them, even though share prices have fallen sharply this week.

"There's no recession here," said Frank Asbeck, the founder of SolarWorld (SWVG.DE), the world's third-largest photovoltaic company, which makes everything from solar-grade silicon to solar cells and solar panels.

"We're always recruiting staff and are happy to hire workers laid off elsewhere," he said during a tour of a 480-million euro manufacturing plant in Freiberg south of Dresden.

SolarWorld's share price took a beating along with others on Tuesday after Germany's Q-Cells (QCEG.DE), the world's leading solar cell maker, issued a profit warning, saying 2008 sales growth would slow to 43 percent and to 10 to 20 percent in the first half of 2009.

The economic downturn has been squeezing lending but there has been little sign of a downturn in investment in solar power, said Bernd Rau, co-founder of Roth & Rau, which has 40 percent of the world market for machines that make solar panels.

"The sun doesn't send any bills," Rau said, adding banks have become fully aware of the sun's ability to produce recession-proof cash flow. "The financial crisis isn't going to change anything about the fundamental vision of solar power."