German engineering giant Siemens A G today said that will sell its solar power and photovoltaics business and instead focus on its other renewable energy activities like wind and hydro power.

The Munich-based company said that it is holding talks with potential buyers for its solar thermal energy and photovoltaics units.

''Due to the changed framework conditions, lower growth and strong price pressure in the solar markets, the company's expectations for its solar energy activities have not been met,'' Siemens said in a statement.

"The global market for concentrated solar power has shrunk from four gigawatts to slightly over one gigawatt today. In this environment, specialised companies will be able to maximise their strengths," said Michael Süß, member of the board of Siemens and CEO of the Energy Sector.

Siemen's Solar & Hydro division generated revenue in the low triple-digit millions in the last fiscal year and has roughly 800 employees.

Siemens will continue to operate the solar thermal energy and photovoltaic units until the sale so that existing contractual obligations will not be affected.

Siemens said that it will continue to offer products for solar thermal and photovoltaic power plants, such as steam turbines, generators, grid technology and control systems, which are produced outside of its Solar & Hydro division.

In the future, its energy business will comprise the fossil power generation (thermal power plants) division, wind power, oil and gas (solutions for the oil and gas industry and small to mid-sized thermal power plants) and power transmission. 

"The importance of renewable energies in the global power mix will continue to grow and hydro power and wind energy will remain the major renewable contributors, the statement added.

Being a global market leader in offshore wind power farms, Siemens Wind Power Division has more than 7,000 employees and another 2,000 in the related service business.

It said that the division has an order backlog of more than €10 billion.