Dear shareholders, dear investors, analysts, ladies and gentlemen, welcome to our fiscal year 2023 presentation. It's a pleasure to introduce our CFO, Markus Nikles, and I'm Gunter Erfurt, the CEO of the company. We will jointly guide you through the main elements of last year's business and also give you an outlook for the upcoming period, explain to you also the reasoning for our last year's results and the underlying business. We have three sections. We'll speak about the business. As I said, Markus is going to guide us through the financials and then the outlook. On the business review, let me start with the market. Last year we have seen another new record in solar installations globally. Led by China, an amazing number of 217 GW have been installed according to Bloomberg. Also the other markets have seen a pretty strong growth.
Germany, for instance, had almost a 90% year-on-year growth 2022 to 2023, entire Europe amounting to 56 GW, also the U.S. had seen a strong growth. On the other hand, we have seen primarily in Europe an unprecedented price war and price drop beginning in the first quarter but throughout the entire year with a substantial decline in prices. As you can see in the lower chart, red for the U.S. and in black for Europe. What does not necessarily mean is that cost structures worldwide have gone the same way. So we are currently in a situation where solar modules are in many, many cases sold below their manufacturing costs even in China.
On the other hand, we also have estimations in the market that the global manufacturing capacity has grown to a jaw-dropping number of 1 TWp, even though that does include also older technologies like PERC but also new expansions primarily into TOPCon but also other heterojunction technologies. What did it mean for Meyer Burger? It meant that the plan that we had originally in place to grow our sales massively compared to 2022 did not come to fruition. While we have installed more capacity and commissioned new equipment and did a pretty successful startup of our 1.4 GW manufacturing capacity in Germany, both for cell and module, we were not able to sell the volumes we had originally in our plan.
What we also did not do; on the other hand, we have as a company decided not to enter into the price war where, as I said, many, many competitors are selling their products below manufacturing costs. We did not decide to go the same path. In terms of the statistics of our sales share, still the DACH region, meaning Germany, Switzerland, Austria, are the largest sales share of the company. In terms of market share per country, we have the highest market share pro rata in Switzerland. The ASPs, as you can see in the lower chart, are still remaining at the high level. So the data shown here are not our prices that we are selling the modules to distributors, but these are the publicly available data where distributors are selling to installers. You can see that we have lowered our prices at Intersolar.
We did the communication in June 2023 to a lower level but still around $0.40 per watt-peak and distributors then selling with their price premium to installers. So what I can also report is that the reduction of our sales price did not necessarily have a massive impact on the volume we were able to sell. So therefore, we strongly believe that the decision not to enter into the price war has been a good decision. I will also come later to an explanation what we are currently planning with our inventories that we have primarily sitting in Europe. What else did we do? We did work on our customers or on the installer base, primarily working with loyalty programs, establishing more contacts with our installers, forming our partnerships with installers in the market.
We have also recently started another collaboration with Otovo, a company headquartered in Norway, a company that does direct sale of solar systems to end customers via a webshop. There's a new product line that was created jointly with Meyer Burger products, also together with other European products in a system. Furthermore, the company is soon starting its balcony solar sale first in Germany. This is going to be a premiere also for Meyer Burger because we are selling these balcony systems via our own webshop on our website.
Speaking a bit about operations also there, despite the fact that we were not able to sell the volumes that we wanted to sell for the reasons I mentioned and the market conditions in Europe and still our strong focus in Europe, we have come a long way and did a successful development or establishment of operational excellence in our manufacturing. So you see in the upper chart the growth or the development of our yields in our Freiberg module line. The target yield for A and B product, A and B. To explain that, A and B are very high quality grades. A is near to perfection. B may have a few optical defects but still a great product and hard to recognize what makes it a B module, but we are very strict in our quality judgment.
So these both yield grades have gone up, of course, with the beginning of the production and have reached very, very high levels. What you can see there still is there's always room for improvement and we can still get better, but the total sellable product yield is already above the average. And we have reason to believe that this is a world-class yield standard we have been able to achieve. Furthermore, on the solar cell efficiency path, when we started our line in Thalheim, Germany, where Markus and I are currently sitting, we started at the level that has continuously improved over time. And our industry has shown for years and if not for decades that we see an average annual growth of about 0.4%, in some years 0.5%, in some years 0.3% absolute efficiency gain.
You see here that in mass manufacturing we were able to show this with efficiencies continue to grow. The bit of a volatility in that curve can be explained by varying wafer qualities and other elements in manufacturing, which always need to be tackled in order to improve the product. But also this is a great success. I'm saying that also for the reason that the company 2 years ago, 4 years ago, when we started our journey turning the company into a solar cell and module manufacturer, we didn't have that much experience compared to today. And when I speak about the operational excellence, that's an asset that we have generated.
Currently working on setting up the U.S. facilities to manufacturing there, we have all the learnings from the last three years and will take the lessons learned and embed them in our ramp-up process in the U.S. and reach these levels in our expectation as soon as we start producing and having the ramp-up completed. Furthermore, I also wanted to mention that the journey regarding higher productivity, higher efficiency is going to continue. We have a very strong roadmap in place with our R&D team that is leading the way and us into also new generations of technology and products. Speaking about products for a second here, we have also reason and data to believe that the company's products in the combination, which we know is the proprietary approach of Meyer Burger with heterojunction in combination with our module SmartWire technology, has various advantages over other products.
What I'm showing here to you is a very recent study that was presented by EPFL University in Lausanne in Switzerland. What they did is they compared various products, including specifically Meyer Burger, shown in that chart as SHJ plus SWT, which translates in our acronyms as heterojunction smart wire and a competitive heterojunction product and TOPCon modules and PERC modules, which is the previous technology, the mainstream technology. What we see here is a study on the effect of so-called potential induced degradation. This is something that technologists are struggling with a lot and are always trying to find good solutions. Usually they do. In that study, what you can see is that pretty much all technologies shown here do show a pretty substantial degradation of this PID stress test, which can lead to massive failure in the field.
Here we have done a good job. Our technologists have done a good job to come up with best-in-class technology. So I'm also saying that because in our world, technology comprises more than just looking into efficiency records. We look into a holistic approach of highest energy yields, high efficiencies, but primarily also the longevity of a product because that is super important. For instance, when it comes to bankability requirements for utility solar installations. And as we know, the utility segment is going to play a very important role in Meyer Burger's future business when we are looking into the United States business. So on the technology even further, so we are close to making contact, as I may say, with our interdigitated back contact solar cell technology. The photo shows you how the technology looks like.
So it does not have any contacts anymore on the front side. It's still contacted via our SmartWire contact technology on the backside. We have made good progress in the last year. We have set up a laboratory line at Meyer Burger Research in Hauterive in Switzerland. The technology has been studied in detail in regards also to the degradation effects. We have very, very low degradation that we do observe in our weathering tests such as IEC standard tests that any product has to go through before it can be sold. That's something else that ties into our approach of delivering products of strongest and longest longevity and reliability. The industrialization for the technology is ongoing.
Industrialization in the Meyer Burger case always means we do process development together with partners for the cell technology itself, but also for the equipment and, of course, also the equipment development in-house. Last but not least, on the business review for 2023, we did very early understand that the U.S. is a better place for us, a good place for us to conduct business. So what we did when we learned about the new regulations in the U.S. that were put forward by the U.S. Department of the Treasury in the second quarter of 2023, we did very quickly look into our options and abilities to move the already ongoing cell expansion project from Thalheim, Germany to the U.S.
The way we approached it was in order to be as fast as possible to find us a brownfield site, understanding that the U.S. is currently going through a rush time, if I may say so, under the IRA. Many, many companies are investing. Contractor availability can be challenging, at least. So if you have to build a building from scratch, that requires even more resources than working in a brownfield building. Meyer Burger has made a good experience already with using or reusing brownfield sites in our establishment of the business in Germany in the first place with our Thalheim site and Freiberg. In the U.S., we are replicating this approach. In Goodyear, Arizona, we have already come a long way. Equipment is installed and we are looking into starting manufacturing there in the second quarter. That's our current estimation.
This is not a brownfield building, a brand new one that we are the first tenant and it was there. We could go into it, do some refurbishments and install the equipment and will install more equipment to start manufacturing. The approach is going to be similar in the Colorado Springs site that you see on that photo, a former semiconductor factory that is our location for the solar cell manufacturing in the U.S. The equipment is completely on the way. So we have cut all POs and it's in the making for the Colorado Springs site because it had been the original equipment orders for the Thalheim site. So we just basically rerouted or put a new destination of the equipment once it's built, which is Colorado Springs. That is the end of the business review and I'm handing over to Markus for the financial review.
Thank you, Gunter. Hello, everyone. Let's start with the first slide on the key metrics. We have here a few KPIs here are shown. We start on the left-hand side with the number of employees, the FTEs. We started out the year with a little bit more than 1,000 employees. We ended up by the end of 2023 by almost 1,300 employees. So a plus of about 260 employees, mainly, of course, in the area of operations. There was the biggest chunk. There was the largest number where we have hired new colleagues. Of course, also in R&D as well, where we have further strengthened our R&D capabilities. So this is on the employee side. Then if we go to the next pillar with the cash and the cash equivalents, again, also here we started out the year with CHF 293 million of cash.
We ended up by the end of 2023 at a number of about CHF 150 million. If we have a look at the various cash flows there, obviously from the cash flow on the operations side due to the market challenges, which we were facing there, the cash flow from operations ended up at minus CHF 152 million. Of course, we also due to the ongoing investments and the ramp-up of the sites, we invested again heavily into production on one side in a little bit still in Germany, but also, of course, in the U.S., where we had the cash flow from investing activities in the neighborhood of about CHF 167 million. Then we financed part of these investments mainly also with a convertible bond. The cash flow from financing ended up at CHF 181 million.
So this gives the bridge of a net cash decrease of about CHF 138 million-CHF 150 million by the end of 2023. It was also mentioned in the ad hoc release this morning, the cash which we had available, the available cash by the end of February was at about CHF 82 million. Then in the center of this chart here, of this slide, we see the inventory development. At first sight, we do not see a significant increase from CHF 119 million, where we started out the year, to CHF 131 million. But we will elaborate on this later. Of course, we had significant inventory impairments. So actually, the value was much higher. And the main increase also on the inventory side came from the finished goods. The finished goods, we started out the year, it's also shown in the annual report, with about CHF 37 million.
We ended up of total finished goods by the end of the year of about CHF 128 million. Of course, due to the challenging environment, we reduced the raw material accordingly from about CHF 89 million to about CHF 59 million. And we will elaborate on this later on. But we also had to significantly increase the value adjustment on finished goods from -CHF 16 million. We started out the year to about CHF 68 million by the end of the year. So a very challenging situation when it comes to the inventory. If we go further to the right to the PP&E here, property, plant and equipment. Also here, we have further invested, as I mentioned before, with the cash flow from investing activities. Here at first sight also, it's relatively not that much of a big increase from CHF 211 million to CHF 266 million.
But also here we will hear later on, we had some extraordinary depreciation, especially here in Germany, which we had to take into account. That's why here we don't see the huge increase here of PP&E, of property, plant, and equipment during 2023. Last but not least, on the right-hand side, we see the equity and the equity ratio, which we will see later on, obviously, in the P&L. The equity was decreased from about CHF 429 million to about CHF 191 million, or an equity ratio by the end of 2023 of about 28%. These were the key metrics. Let us go to the next slide on the key figures when it comes to the P&L.
Also here, again, if we start on the left-hand side, again, we had last year in 2022 a total turnover, total sales of about CHF 147 million, thereof about CHF 125 million of module sales and the old activities plus our Pasan flashers, there we had CHF 22 million. So that was in 2022. As indicated in the ad hoc media release on January 19th, we have realized last year a turnover of about CHF 135 million, of course, predominantly realized consisting of our module activities and a little bit still of our activities with Pasan. So this consists of that number of about CHF 135 million. If you look a little bit deeper at the sales, remember we had in the first half year, we had a total sales of about CHF 93 million. So really had a huge growth in the first half.
In the second half, obviously, the difference only resulted in about CHF 35 million in the second year due to the challenging market condition, which Gunter Erfurt was alluding to. So this is on the net sale size. So let's have a look at the EBITDA, the second graph from the left-hand side. Again, in 2022, we had EBITDA of about -CHF 35 million. And here, if we have a look overall, the total EBITDA in 2023 amounted to CHF 164 million. I will go more into the details on the next slide where we were coming from. But we see there the split from operations side with the -CHF 73 million and then the CHF 91 million at the bottom with the one-offs consisted of, on one side, value adjustments on inventories of about CHF 50 million.
So value adjustment inventories, then also ramp-up and front-loaded costs for ongoing expansions, which we were realizing. Then the customer credits from inventory protection recognized prior to the ad hoc announcement on January 17th. So this was the CHF 50 million and the difference there of about CHF 41 million to the CHF 91 million were additional value adjustment stocks. And also there, we will see that also again on the next slide, which we had to realize due to the pending decisions on the political side, where we were still looking or waiting for political support measures. And since this was not clear yet by the end of the year, we had also to take into account the closure of the Freiberg site. And in this context, we had to realize there another 50, sorry, 40 million, excuse me, of value adjustment stocks.
We see that again in the number of CHF 91 million. If we go then to the EBIT, EBIT on the in the center, there, the total EBIT then ended up at minus CHF 250 million. We had on the top, on the operative level, we had from the CHF 73 million on the EBITDA level, we had to add another CHF 30 million of regular ordinary depreciation. So that's why we have there operative a number there of about CHF 103 million of operative EBIT. And the one-offs there, the switch or the translation from the CHF 91 million EBITDA to the CHF 147 million EBIT, this was again due to the pending decisions on from a political support. And there, we had to take into account an additional CHF 57 million for additional depreciation on property, plant, and equipment, mainly related to the closure of the Freiberg site.
But we will go into more details again on the next slide. But again, here we see the EBIT of about CHF 250 million. And if we go then to the right-hand side, we see there the net result, the net result where we had overall a net result of CHF 292 million EBIT. So the financial result from EBIT to 50 to net result of 292, the financial result of about CHF 42 million mainly consisted of, first of all, of currency translation difference of about -CHF 22 million. But we also, of course, had to take into account the interest predominantly on the convertible bond with about -CHF 19 million plus additional interest on the loan facilities of about CHF 6 million. These were the key components. Of course, the cash we had available, we invested accordingly, and we had interest income of about CHF 8 million.
But overall, the net result ended up at CHF 292 million. Now let us give you a more detailed overview on the P&L and on the extraordinary items in 2023. We see here the bridge of the EBITDA to the EBIT. If we start on the left-hand side, again, the overall regular EBITDA was amounted to about CHF 123 million. Remember, we have announced in the ad hoc announcement on January 17th, we have announced there an EBITDA before extraordinary items and adjustments of about -CHF 126 million. So what does the CHF 123 million consist of? Again, we had on one side the black bar there of about -CHF 73 million, which came from the operational side due to missing volumes, missing margin, missing underutilization of the production capacities, again in Germany due to the very challenging situation.
Below the CHF 50 million, the one-offs, the one-offs were really, these were again one-offs which we have recognized before the ad hoc announcement on January 17th. One-offs which again were related to value adjustments on the inventory. Again, ramp-up costs, front-loaded costs for the ongoing expansion and the customer credits for inventory stock protection. So this was the, these were the one-offs. So where we ended up there at the EBITDA of CHF 123 million before additional extraordinary items. Then again, due to the pending decisions on the political side, and we had after the ad hoc announcement, we had then to take into account the financial models. We have taken then two financial model scenarios and we weighted it accordingly. We have used there, we have assumed or have taken there then for the impairment testing, we have taken two financial cases, two financial models.
One, the so-called resilience model, assuming that a political decision in the European community and in Germany would be in favor again of a resilience program here in Germany and in Europe. That's the one model we have taken into account. But also, of course, we could not only take that model taken full into account, we also had then a non-resilience model also populated and taken into consideration for the impairment testing, which we can see on the right-hand side with the so-called management case. And we did these impairment tests again. And if we have a look then, the first result of this impairment test is on the left-hand side, the CHF -40 million. The CHF -40 million we had to post and we had to recognize in the P&L.
These were again additional value adjustments on top of it, of the value adjustment which we have already posted before January 17th. So after January 17th, we have taken into account an additional CHF 40 million of value adjustment on the inventory. And then that ended up at an EBITDA of about -CHF 164 million. Then if we go approach ourselves towards the EBIT of -CHF 250 million, we had then, of course, to take into account the ordinary depreciation of about -CHF 30 million. And last but not least, we had then, based on the impairment testing, we had to recognize an additional impairment on the property, plant, and the equipment side of about -CHF 57 million. So these components, which we see now here with the red color of CHF 50 million on the left, but also the CHF 40 million and the CHF 57 million.
So overall, this was a significant impact. And again, we had additional value adjustments on the inventory of CHF -40 million plus impairment losses again on the PP&E of CHF 57 million, which ended up to CHF 250 million. And we see that also on the right-hand side, what would have happened if we would have only applied the management case, the management model, then our EBITDA would have even been lower by about CHF 98 million. And then if we would not have, if we could have applied only the resilience case, no impairment would have needed to be posted. And so in other words, what would that have meant? We would have had no additional impairment. And for the future, this will be decisive. For instance, now, what would happen if resilience will be implemented, resilience criteria?
Then, of course, we would need to do again another impairment testing related to the CHF 57 million, which we have now depreciated. And on the other hand side, with the CHF 40 million on the left-hand side, which we had to take into account for the value adjustment for the inventory there, when resilience would be implemented, obviously, we would have an upside on the margin level. These overall are the explanations again on the key metrics and on the P&L in 2023.
Thank you, Markus, for running us through the financials of a very, very challenging year, as you could see, with many variables we had to deal with even in the auditing process to understand the value adjustments and do them accordingly. So let's do the outlook together. Where is the journey taking Meyer Burger?
The photo that you see here is our Goodyear, Arizona module facility that is already equipped with equipment for module equipment to start production of modules and to serve our offtake partners in the U.S. very shortly in the second quarter, according to our current estimation. The Meyer Burger business case is, when I look into the U.S., a very robust one. Meyer Burger is set up to serve this market over there. I will speak about what is specific about the U.S. market in solar. Meyer Burger is, as we know, among the Western, the very few Western players of high-tech heterojunction and cell and module manufacturing in the U.S. I would even say we are the only one currently. In Europe, there is at least one that is building a factory right now.
In the U.S., we strongly believe in a highly profitable business given the market situation over there. I will speak about it in a second. It's not only the market, it's the partnerships we were able to set up. It is also our very early decisions to go to the U.S. in the first place, but second also as a market, I mean, and second also to engage in manufacturing. Third, in addressing the utility market. We did not do this in Europe. We were focusing on residential and C&I, commercial and industrial. In the U.S., we had always seen good prospects in the utility segment and were able to sign long-term offtake agreements. So we have the customers there. We'll speak about them in a second.
We have strong industry policies in place, which do prevent a situation from happening that we currently see in Europe, which is unfair, which is not possible for a Western fair player to compete in. This is our focus in the upcoming period. Speaking about the growth opportunity in the U.S., I find it very remarkable on the left side where you can see that in a comparison before the IRA was implemented and how the projections looked like. Post the IRA implementation or the announcement, how the markets have developed. Long story short, the IRA does give a boost to the U.S. solar market, which is a very interesting signal, despite the fact that the U.S. is doing a lot for the reshoring of domestic manufacturing. Why is a reshoring happening? In our interpretation, a very simple answer.
Solar is part of the future energy generation and energy supply. It's a strategic asset. It's not just a product. It is a super important infrastructure product where you either, as a country, have access to or you do not. In the U.S. case under the IRA, there is a massive growth of additional capacities. Only a very few players are looking into solar cell and module manufacturing. Meyer Burger is part of it. But in aggregate, it's going to lead into a pretty strong domestic manufacturing, giving the country the strength that is needed in the new energy world and making the country independent of maybe political pressure from current suppliers. The segmentation that you can see in the middle is primarily focused, like in the rest of the world as well, on silicon-based technology, where Meyer Burger belongs to with our heterojunction technology.
The U.S. also has a pretty strong player in thin film, which is First Solar. That's why also there is a larger part of this segment present in the U.S. And I spoke about our very early decision to enter the utility segment. This has been a decision that Meyer Burger received a lot of questions about. Is that a good move? Prices are lower. Margins might become under pressure. And these types of very fair questions. What you can see, though, is that the utility segment is the segment in the U.S. that has the largest growth rates forecasted. It's the gray bars here. Whereas the residential and C&I segment is also seeing growth, but not at the level. And when you look at these charts, it compares very nicely to how we are setting up our manufacturing there.
We have the majority of the product dedicated to serve the utility segment. Out of 3 lines in Goodyear, Arizona, 2 are going to do utility product and 1 is spared for residential and C&I business. We are participating in all segments, but we see a strong growth in the utility segment in the upcoming future. Meyer Burger, as a global HJT player with a strong focus on technology, as we always did, we have the patented cell and module technology. We are continuing developing within our roadmap. I spoke about a few elements. It's the efficiency gains on the one hand that we are working on, but primarily, Meyer Burger is looking into energy yield, highest energy yield, and that goes along with the high efficiency, but also to a large extent and degree with the longevity and the reliability of the product.
Again, that's an asset that ties into bankability requirements for utility products. I strongly believe we are well positioned in that field. Of course, also the sustainability aspect is something pretty important for Meyer Burger. So there is no forced labor in the product. We are among the very few players on the planet that do lead-free products. PERC modules, TOPCon modules from China, they all contain, or most of them contain, large portions or amounts of lead. Our product is entirely lead-free. Our product is PFAS-free. So we are adhering to these values also because we strongly believe this has to do with product quality as well. We are a fair employer. We are paying our people well. There's no forced labor inside. We have a uniqueness that we are emphasizing since we have started the journey.
We do in-house development not only for processes, but also equipment. Many of the new technologies that we are using in or the new approaches in the U.S. are based on own equipment, manufacturing equipment. We are developing in stealth, if I may say so. It's not visible to the outside, and that helps us also protecting the IP. So speaking a bit about the political side of things in the U.S., one thing I want to make clear, it's not only the IRA that is giving companies support, both companies producing, but also companies using locally made products via the investment tax credits that our customers receive, but also the 45X tax credits that the manufacturer receives. The numbers are known. We have communicated them earlier.
We are eligible to receive 0.07 cents per watt-peak for the module and 0.04 cents per watt-peak for the module until the IRA is supposed to expire in the end of 2032. These tax credits, in our assumptions, they sum up to $1.4 billion that we might be eligible to receive. The local incentives come on top of it. We do receive local incentives in Colorado for the cell factory or will receive them once we are fully active there, but also in Arizona.
Important to understand is the fact that customers in the U.S. do look more and more after products which have more local footprint in them, given the new U.S. Treasury regulation that I spoke about, which was communicated first in the second quarter of 2023 and led to the decision of Meyer Burger to shift our cell manufacturing plants immediately from Germany to the U.S., also given the challenging environment we had seen or which became more and more obvious in the second quarter and then throughout H2 of the year. So if we look into the requirements for U.S. customers to receive the full ITC tax credit for their projects, what you are required is to produce the solar cell in the U.S. and the module in the U.S. Then you are eligible for the full amount of the ITC.
The three companies that we currently see in the country are us. It's Hanwha Qcells building a factory there, integrated factory, using no heterojunction, but TOPCon technology. And of course, we have First Solar without thin film technology, and also their customers are eligible for receiving the ITC. So the three companies in total do not grow to or currently not have the capacity that compares to the growth forecast of the US sector. So I would even believe, or we would even believe, that there is potential for further growth for a company like us in that pretty exciting market environment. So how does it look like? Again, on the left side, our module factory. That's a real factory already, so with real people, if I may say so, with a strong leadership team in place, with blue-collar people currently being hired to start up the line.
We have expats over there already from Switzerland, technologists from our Thun team that help the ramp-up of the line, project managers, all types of functions currently being established. As I said, we anticipate to start manufacturing in the second quarter of this year. In total, once we are fully ramped, 500 employees in that line, in that factory, and about 10,000 solar modules that come off the line every day. The cell facility, and this is contingent upon closing the existing financing gap, is expected to start production around year-end of 2024, less people than in module that has to do with even higher automation levels in cell, 350 employees, and about 1.4 million half-cell solar cells that we are producing there.
Currently, we are having contracts in place with the three known customers, DESRI being the largest, by far the largest customer of Meyer Burger in general, Ingka Group, which is the holding company of IKEA, and BayWa r.e. from Germany, or their arm in the U.S., respectively. So speaking about DESRI, we did inform the market this morning that DESRI is intending to participate in the cap raise. We are convinced that this is a very strong signal to the market if the largest customer of the company is willing to invest in its supplier, if I may say so. This comes with a strong anticipation of Meyer Burger's leadership in the products, the quality aspects I've mentioned, and the overall conduct of business we do together supplying the DESRI projects in the U.S.
DESRI is a very successful renewable energy developer and IPP with a strong customer base, with a strong growth rate. We are very happy that we were very early on in 2022 able to form and start this important relationship and that it has now resulted in their willingness to support the company in our current situation and in the upcoming capital raise. In terms of the discussion we were already having or what we have communicating already on a potential partnership business model, also this discussion is ongoing. This is in addition to the communication we did with DESRI today.
So we are in talks with companies, industrial companies, to look into potential opportunities to join forces in various segments and areas with the aim of achieving a partnership model that may lead to licensing income for Meyer Burger, whereas we would still own the intellectual property and would also help the company in potential future growth to make Meyer Burger's business more of a lighter asset business. Speaking about our financing plan to close the funding gap, we communicated the CHF 450 million funding gap already on January the 17th and repeated it on February the 23rd. We are targeting proceeds of CHF 200 million-CHF 250 million in our upcoming rights issue with the EGM taking place on Monday of next week. The remainder of the financing, in our expectation, is going to be closed. The gap is closed via debt financing instruments.
Also there, we did the reports already what we are working on in export financing from a European provider and a DOE loan from the Department of Energy, a subsidized special loan for strategic projects in the U.S. Meyer Burger's solar cell project is definitely among the strategic or the projects of strategic interest to the DOE, and we receive strong support there. Last but not least, the mentioned 45X financing, which would be partly monetization of the tax credits we are eligible to receive in the next years. Discussions there are ongoing. We are in concrete talks with the providers and are expecting them to close in the upcoming period. A word on resilience. Markus has elaborated a lot on the challenges we were facing also during the auditing process with assumptions whether or not is it coming, is it not coming.
So we have also communicated since January that the decision is made to stop loss-making in Europe under these unfair conditions. And we have stopped production in Freiberg in the first half of March. So we are not producing there anymore, unfortunately. It's a state-of-the-art line with a strong team that has grown together and achieved KPI figures that I presented a few of in this presentation. Nevertheless, the decision that we made last year not to stop production earlier, even though we did decide that we adjusted production output already in the last year by not going into volume production in our so-called line C that completed the 1.4 GW expansion in Freiberg. We did not run this line in mass volume.
We did take that decision because a company like us and like anyone else in solar has a supply chain in place that you cannot simply switch off and on. So we have material coming from all over the world. And some of our materials, they do have an expiration date. You have to use them before a certain date. Otherwise, you can't use them anymore, also for quality reasons. And so having material in the warehouse, we decided to keep the value in the product. Otherwise, this would have been write-offs. They would have had nothing to do with the mechanics Markus explained, whether or not there's resilience or not. So it would have been a technical write-off because we could not have used them anymore. So we did decide, "Let's continue. We had the people. We had the material.
We have a good product, which is currently under pressure to be sold in the volume for the reasons we explained." So now we have a warehouse with product, with solar modules. And as a first country in the European Union, Italy has come forward in the last week of February with the presentation of a resilience program that is available pretty much between now and end of 2025. That's at least the period that has been communicated. And since day one, we are receiving inquiries from Italy because what is required there as a product is a cell efficiency that must exceed 23.5% and a module efficiency that must exceed 21.5%. And the modules must be produced in Europe. And if the cell comes on top of it, even better, we have a high-efficiency cell and we have a very good fitting product.
The support scheme in terms of also a tax credit instrument does give the customer using Meyer Burger modules a pretty strong business case. Our sales team in Italy is already in talks with customers, or as I said, customers are approaching Meyer Burger to sell such modules. In Germany, to speak about resilience there, discussions are still ongoing at the parliament level or in the committees. We have not yet heard a final decision. Still waiting for it. What's important for me to mention again is the decision to close Freiberg has been made. It could only be reversed if we would receive strong signals from politics, both in Europe and in Germany, to reverse it, to continue with the Freiberg operations. For the time being, this is not the case.
Therefore, we are fully focusing on the U.S. given the business environment that I explained about. With this, we are at the end of the presentation, and we'll be happy about your questions. Thank you.
Ladies and gentlemen, if you would like to ask a question, please press 9 and the star key on the telephone keypad. If you would like to cancel your question, please press 9 and the star key again. Please press 9 and the star key if you would like to ask a question. So I repeat, if you would like to ask a question, please press 9 and the star key on your telephone keypad. And the first question is from Laura Boucher. The floor is yours.
Hi, can you hear me?
Yes, loud and clear.
That's good. Hi guys, thank you for taking my questions. I've got two. First, you're not providing any guidance, I mean, tangible guidance for the year. So can you at least tell us what is the minimum volume you need to produce in 2024 to conform with your offtake contract? And also, what are the risks and penalties should you fail?
Yep. So the details of what we have to supply into our offtake agreements, we did not communicate. So this is between the parties. It goes primarily to DESRI in the first year. So they have signed first, and they are receiving the product from us. So what we did do, what I can say, and we communicated this earlier on, is we have also agreed upon that in a ramp-up phase, any company that starts a ramp-up in manufacturing is facing certain challenges. And so this is taken care of in the amount that we need to sell there. But detailed figures we have not provided. And another reason why we are refraining from providing a guidance for 2024 is clearly also the situation in Europe. So we are anticipating that we will be able to continue selling our product in the market.
And as I said, we have not entered the price war. We have kept our pricing a little lower than in the first half of the year. And we have also, until so far, not adjusted it. And the product is still demanded in the market. The volume, as we've said, is, of course, too low. But now with the measures in Italy, we have a good belief that this is helping our inventory sale at a good price. But that needs to be established. It was announced in the end of February. So starting probably from April or so, it's not easy to forecast this. And so this is why we are refraining from it. And the details on how much volume we need to provide into the offtaker contracts, this is confidential between the parties.
Okay. And for my second question, can you give us an estimate of first how long it will take you and how much it will cost you to dismantle the whole operation in Freiberg, including severance packages, logistics, and all the rest?
So there's, Laura, there is no project yet in place where we say we are dismantling and cost associated with it. So there's no decision made. So we have just stopped the line. The line is now, if I may say, being hibernated or preserved, technically speaking. So we make sure that the equipment keeps its value from a technical point of view and can be used wherever. Options clearly for us is also to bring the equipment to the U.S. and continue there. But there's no decision yet made. And the case we have presented in terms of the potential in the U.S. is just talking about the volumes we are currently establishing. And this has nothing to do with the German operations, the 2 GW.
But in that case, I mean, are you keeping your employees there? What are you doing? I mean, you shut the operation, but then you're not dismantling it. I mean, you're saying you're keeping it ready to work or to be used whenever. But then what are you doing with your employees meanwhile?
We communicated this. We are preparing the layoffs.
Okay. Okay, this would be my two questions. Thank you for your time.
Thank you. The next question is from Jay Patel. The floor is yours.
Thank you very much. And thank you for the presentation. Look, I just wanted to look at this more simplistically. I know it's a very complex situation, but at the end of the day, there's a lot of financing that's needed here to bridge the CHF 450 million funding gap. And I guess there are a few things. One, on the assumption that you don't sell inventory, what is the cash outflow for this year for the European operations? You're going to incur some cost that you're going to have to keep on running until layoffs and all the rest of it works through. And is there any sense you can give us that so we can weigh that part of the component up? And then you've highlighted CHF 250 million of EBITDA over the medium term. What would be the first year you attain that?
Can you give us a sense of what the annual cash flow would look like in such a year? Once these projects are built out, what's the annual CapEx? Is it relatively low so that there's quite sizable cash flow for at least the duration of the contracts that you've signed with your industrial partners? And then third question, you have a lot of opportunity that you highlight in your presentation in the U.S. And is there anything that we can start to think about in regards to new contracts that are available, maybe extensions of volumes on existing facilities, or is that just too early? And really, the focus is getting the funding, delivering the projects that you already have proposed. Thank you.
So maybe I go first, and Markus, you can add a few more details. So on Germany, again, and also that ties back into the previous question on what are we doing with our operating costs. So what you can assume is we have pretty much worked through inventory of material. Still something left, but I think the majority got now used and turned into product that's sellable. That's one thing. If you shut down the line, you also are not consuming electricity and other media. So this has another effect. I said that, unfortunately enough, we have already prepared a layoff of the people. That would happen. We would send termination letters still within the month of March. Usually, the majority of our team, they have four weeks' notification.
So that means by end of April, there would be the majority of the workforce no longer with the company and therefore also no longer in the P&L, which is, again, unfortunate from the people's point of view, but that's the answer to the cash impact. So that would come rather quickly. In the unlikely event, and I'm saying unlikely because it's today's March 14th, and when I say we are looking into laying off people until the end of the month, in the unlikely event that we see a very sudden change in resilience measures put forward, we have prepared an option to go for a short-time approach, which is a program in Germany where pretty much the government takes over wages, the majority at least. So this is prepared, but as I said, unlikely for the time being to happen.
So we believe that the layoff option is the one that we, with the knowledge we have right now, have to choose. So that gives us a clear visibility into the cost structure of that plant. There is pretty much nothing really left. Of course, we have a sales team that continues selling the product. We also retain key people, for instance, technologists, our continuous improvement team, maintenance people, selected operators to help us with the ramp-up in the U.S. On the Thalheim side, we have converted the lines to run a new solar cell size, which is a larger wafer format for the utility product that we produce. And we have already started shipping solar cells to the U.S.
So the product from here has now a different direction or destination and goes to the U.S. and is tied into the business plan of Meyer Burger Americas or then, in essence, of the group. So that's an answer. The costs that we see for the restructuring on the severance side, some might say surprisingly low. So we talk about CHF 3 million in that range for the severance and social payments that we anticipate. And we have a few more running costs, which we need to take care of. But this is not so much as one might expect. And it's well taken care of in our expectation to access these funds, these needed funds via the sale of the inventories. On the cash flow, on the capex needs, maybe making a bit of a generic statement here.
I'm afraid that we may not be able to say much more about it. What we do see on the one hand for the CapEx needs, clearly, it's a lot of money that is required. We have also not the need to secure the CHF 450 million in one shot. There is no need to have it in place next week also. What we see is a CapEx spend plan that spans over the next, I would say, one and a half years with a peak that is happening around year's end and into H1 of next year and then fading out. What we have communicated today is that once we have the lines fully up and running, we are able to reach a cash flow positive situation and profitability as anticipated.
Maybe, I don't know, Markus, if there's anything more you would want to add to the cash flow or CapEx statements.
Well, on the CapEx, obviously, as Gunter has alluded to, the CapEx is very much upfront. So as you have mentioned, in the next 18 months, which we have to consider. And then from a cash flow, from an operations perspective, obviously, there, it takes some time. We have to consider also the ramp-up, etc., until we also then have finally the cell manufacturing plant ramped up. And from an operational cash flow perspective, in 2026, 2027, then it's really then the time where we have, when the CapEx and the ramp-up is finished in order then to realize significant positive operational cash flows.
Thank you. On the third question with the new contracts, so what we are doing, and you said it, it's a strong focus in the current challenging situation to work through the immediate tasks. That means making sure that we are serving the offtake agreements we have signed. There is definitely potential for more in the U.S. So we have many encounters also with other partners than the ones that I mentioned. For the reason that I also mentioned already, there is a requirement for U.S. customers in order to receive the full ITC tax credit to also have a solar cell included in their product. And that's Meyer Burger's specialty, or we are among the very few companies that can do it.
Plus, maybe mentioning another element from the political side, you may have also read or heard about attempts to limit the access of companies that have a certain ratio of Chinese shareholding in them to access IRA money, which also could be supportive for Meyer Burger's business in the U.S. So answer is yes, we are discussing with others, but for the time being, let's focus on what needs to get done immediately under the contracts and also in closing the mentioned funding gap.
Thank you. But I just want to get a clarification just to make sure because I think this is really important for people in general. So what I'm saying is, once the CapEx has been spent and the assets up and running in the U.S., both cell and module, so we're probably talking 2026, 2027, as you were saying, you'd be generating around $250 million of EBITDA, interest costs, $60 million maybe. I imagine CapEx would be very low, maintenance CapEx for this type of plant. Those sort of numbers are a fair reflection, i.e., you would see quite significant cash generation at that point.
Was I right that in your discussions about Europe and managing the process that you're having to close a plant, it seemed from what you were saying that the revenues that you could get from your inventories would cover any cash needs for the closure?
I would say twice.
I either this year, it wouldn't be a cash outflow.
Exactly. So I would say to both comments you made or questions you asked, I say yes twice. So the anticipation here is that under this model that we presented, all these assumptions, we are not growing further after the 2 GW. I'm not saying that it's not happening, but in that assumption, that's the case. So maintenance CapEx is, I mean, you need a few spare wear parts, things like this, but you do not need to replace your equipment every year. So that's an absolutely fair assumption that you made. And also for Europe's downsizing, we expect to simply use, if I may say so, the income, the revenues from the sale of the inventory in certain regions. And as I said, Italy is pretty interesting. We are also hearing that other European nations might also come forward with similar programs.
And so we have a strong reason to believe that we can sell the inventory also in Europe and then pay the restructuring.
Thank you very much. That's very clear.
If you would like to ask a question, please press 9 and star on your telephone keypad. The next question is from Alessandro Foletti. The floor is yours.
Yes. Good afternoon. Gunter and Markus, thank you for taking my questions as well. Just a few ones to understand certain details. The inventories that you have, you said that basically this is completely everything transferred into modules. So I imagine you have a lot of modules now in Freiberg. Why not bring them in the U.S? Sorry, maybe a stupid question, but.
So it's not a stupid question, not at all. So what you have to see is twofold. On the one hand, there are U.S. requirements regarding certain certifications, i.e., sometimes also different BOM requirements. In simple terms, technical terms, you need to use different materials to produce a U.S.-compliant module. There are fire tests and other tests in the U.S. that you do not need to do or to go through or to pass in Europe, but in the U.S. And so whenever we ran U.S. campaigns, we switched pretty much the BOM material to meet these requirements. So i.e., not all the inventory we have in the warehouses in Europe can be sold, technically speaking, because it's missing certain certificates. So that's one thing. The second thing is also that we had also a bit of a slow start in our sales organization in the U.S.
We have now changed it. We do believe that we are much stronger now also in the sales organization in the U.S. to sell more product there. We have inventories also in the U.S., much less than in Europe. These are pretty much the important answers. We have a customer base in the U.S. that's continuously buying from us and now working on addressing this and getting more sold also in the U.S. There is a limitation in terms of the product that we have that can be sold in the U.S. It could also be interesting. We're also looking into it. Let's assume there is a strong appetite. I'm picking Italy again for module. The product that is sellable in the U.S. under the certification criteria or test criteria that I mentioned is compatible with selling it in Europe.
So it's also an assumption that we may sell even U.S. inventory in Europe, but just speaking about optionalities.
Just again, yes, thinking in terms of scenarios and optionalities, the demand that you could generate out of the U.S. market, as far as I understand you, is obviously not enough to keep Freiberg running until you are up and running in the U.S.
This is correct. You also have to see that the ITC tax credits that I talked about, they do apply to all projects in the U.S. A product made outside the U.S. has a lower value.
Yeah, I understand. But at least the price is better.
The prices are lower.
At least the price is better.
That's correct.
Okay, thank you. And then on what you said about Italy, would Italy be enough to keep Freiberg alive, or that's also too small? We really need Germany for that.
For the time being, it's still a speculation. What we know is there is increased demand, but the Italian market in aggregate is some number below 5 GW per annum. That would not be enough to keep the factory up and running. And even if it would, the company has gone through a very, very challenging period now. And we need to immediately stop the losses. So if we continue speculating on, does it work, does it not work, that's, in our opinion, not a strategy. If there all of a sudden would be a system in place in Europe that would speak for a strong business, then we might have a different situation. But from all we know for the time being, it would be not enough to continue running these operations.
Understood. Thank you. My last question on the ramp-up in Colorado Springs. Just sort of trying to gauge whether your target to start production end of this year is ambitious or not. The lines that you would have to install there, obviously, under the assumption that you secure the financing or at least the first tranche of it, there would be new lines that Meyer Burger has to produce in Europe and then be transferred to the U.S.
So as I mentioned earlier, the equipment itself for the lines, I'm not speaking about the building technology like HVAC and wastewater treatment and chemical supply. The equipment itself was already ordered in conjunction with the project that we anticipated to execute in Germany. So the equipment is definitely not the bottleneck. It's far advanced. It's being built either at Meyer Burger. So we have a fully loaded equipment manufacturing in Hohenstein-Ernstthal, Germany. And also our partners for the equipment, which we are not building in-house, is in the making. So let's say that.
So you are already producing it.
Because we had started the project earlier.
Excuse me. Yeah. Okay.
We had started the project already when we decided to build the factory in Germany. Remember, we initially said that the addition of the 2 GW is happening in Germany. And this was when we placed the orders for the equipment. So that's why the equipment is ahead. We can control the schedule with the suppliers to some degree, and we do that, not to or to also optimize the cash out for the CapEx there. But the critical path beside the closing of the funding gap clearly is also the required refurbishment of the Colorado Springs building. That's true. It is an ambitious plan. I'm not denying this. But we have a technical plan in place how we start the implementation of the equipment and how we also want to start up the line.
First and foremost, we need to make sure that we have bridged the funding gap and have the financings in place to full throttle continue in Colorado Springs.
Understood. Thank you.
At the moment, there are no further questions.
Much. If there are no further questions, then we thank you both for your attention, for your interest in the company. The next event is the EGM taking place physically in Thun in Switzerland next Monday. We may see one or the other there again, and hopefully, we'll talk to you again soon. Thank you very much.