#MakeSolarEU

EU State Aid rules were updated in March 2023 to make it easier for EU countries to support the building of solar factories, so called capital expenditure, or capex. 

The rules should be further updated to support the running of solar factories - that's operational expenditure, or opex. This is particularly to help the energy intensive parts of the value chain. 

Research shows that European solar manufacturing will be competitive once it reaches gigawatt-scale capacity. Updated State Aid rules would help EU solar manufacturers reach that scale.

The RRF is an existing EU financial instrument of €723 billion which EU countries can use to support domestic manufacturing.

Part of the EU's official Guidance on how Member States can spend RRF Funds - as part of REPowerEU efforts - includes a recommendation that governments: 

"need to consider providing support towards developing and expanding their industrial value chains to manufacture and recycle the low-carbon technological components and equipment needed to deliver on their energy and climate objectives. Support to industry in this respect may cover the manufacturing capacity of clean-tech equipment, notably solar, wind, heat pumps, electrolysers, and other low-carbon technologies.”

Some EU countries have already taken up this opportunity, like France, Germany, Italy, the Netherlands, Romania, and Spain. 

For more case studies, check out our letter from May 2023 to national governments advising how they can use RRF funds to support their solar PV industry. 

To support a level playing field within the single market, all EU countries should have access to a dedicated EU financing tool for solar manufacturing.

We propose a the EU Solar Manufacturing Facility, a dedicated channel for EU funds to solar manufacturers. Initial calculations indicate that – in order to meaningfully jumpstart Europe’s solar PV supply chains to reach initial scale – this financial instrument would need to have access to at least €0.78 bn EUR annually to support investment of 10 GW across the solar PV supply chain over a 10-year period (totalling €7.78 bn EUR). This would cover capital expenditure and operational expenditure for partially re-shored manufacturing capacity. 

The SMF would also create a venue for solar buyers and producers to sign deals. Financing could be sourced either from existing EU funding, like the Innovation Fund, or new EU funding, for example in the form of a European Sovereignty Fund, and should be supported by the European Investment Bank, with a specific role for Member States to ‘top up’ financing to draw investment to their country.

The ‘non-price criteria’ in the NZIA must be clear, comprehensive, harmonised, and applied only in technology specific auctions.

Right now, the NZIA proposes that technologies with a 65% dependency on one source are negatively rewarded in public auctions. However, it's not clear how we could calculate the 65%. For example, we could consider the market share relating to the final product, or an average of input materials and components going into a final product. 

We're asking EU lawmakers to further detail and clarify these technical specifications within a dedicated Delegated Act.

It's also not clear how much weight that non-price criteria could have. 

We recommend that sustainability and resilience criteria should count for no more than 30% of the points that can be awarded in a tender.