In June 2024, the EU adopted the European Net-Zero Industry Act, setting a goal of at least 30 GW of European solar manufacturing, at each stage of the value chain, by 2030. This goal is ambitious but feasible, and important for Europe’s industrial and energy security objectives. Reaching the goal requires a smart and robust industrial strategy for solar PV manufacturing in Europe, based on financial support for building facilities (push policies) as well as for creating demand (pull policies).
In April 2024, 23 Member States signed the European Solar Charter setting a series of voluntary actions to support the European solar PV sector. Amongst others, Member States commit to pilot resilience auctions at an early stage to provide the demand pull for solar manufacturing in Europe. Several Member States have acted on that commitment, including France, Italy, Spain, and Austria.
The European Commission has also approved support schemes in several Member States under the Temporary Crisis and Transition State Aid Framework. While the scope of these schemes are open to solar manufacturing projects, no projects have made use of the schemes as of yet. The EU Recovery and Resilience Facility, as well as the Innovation Fund, have also been used at National level, with limited impact.
While this report clearly shows positive action in the direction of solar manufacturing across Member States, it is spread unevenly and is not at the level required. Many European solar manufacturers are in crisis as market forces are driving down the price of solar components, making it difficult for Europe’s solar industry to sell their products. Reshoring manufacturing to Europe, therefore, needs a sound industrial strategy, with short-term support to keep European manufacturers afloat. We call on the signatories of the Solar Charter to follow-up to their commitments under the European Solar Charter.
Support for European Solar Manufacturing
The European Solar Charter. National Recovery & Resilience Plans. The European Investment Bank. The EU Net-Zero Industry Act. The EU Innovation Fund. State Aid Schemes. Horizon Europe.
Read the State of Play Report
As well as evaluating the impact of current measures to support European solar manufacturing, the paper makes a number of recommendations to adjust support mechanisms for full effectiveness:
State Aid Rules
The European Commission should prolong the State Aid rules under the Temporary Crisis and Transition Framework beyond 2025 and adjust the rules to also cover the running cost of factories (OPEX), and reduce complexity of access and implementation under point 86 (matching aid).
European Investment Bank
The European Investment Bank should engage in financing the pipeline of mature solar manufacturing projects. Several options exist for EIB to engage, like (1) offering zero-interest financing with no additional collateral required to obtain the loan, which would provide the solar companies with the possibility to start financing. Or (2) by developing a package of counter-guarantees to help improve access to finance for solar manufacturers, like the EIB’s support for the wind industry.
Dedicated EU Financing
The European Commission should set up an additional EU financing tool for solar manufacturing under the Innovation Fund, modelled on the Hydrogen Bank. It could be modelled on the Solar Manufacturing Facility.
National Support
Member States should follow up to their commitments under the Solar Charter and engage in early implementation of the Net Zero Industry Act.
Market Access Standards
These industrial strategy solutions need to be accompanied by clear market access standards that reflect Europe’s Environmental, Social and Governance (ESG) values, in particular via the upcoming EU Eco-design Directive and Energy Labelling rules for solar PV, which have not been concluded yet as well as the Implementation Guidelines of the EU Forced Labour Ban (FLB) regulation and the EU Corporate Sustainability Due Diligence Directive (CSDDD).
The European Commission should provide clarity on Eco-design rules for solar PV and Forced Labour Ban as soon as possible.
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