What's going on with European solar manufacturing?

The following is attributable to Dries Acke, Policy Director at SolarPower Europe.

What’s going on with European solar manufacturing?

Europe’s manufacturing targets are at risk.

In recent months, we’ve seen the prices of solar components – like modules and inverters – plummet to record lows.

This is due to growing production capacities getting ready for the expected global solar boom.

And on the other side, developers have ordered too much, temporarily overestimating EU demand.

Together, that means prices are down.

What does this mean for European manufacturers?

The price crisis makes it harder for European solar manufacturers to sell their products.

We’ve already seen bankruptcy in recent weeks.

Why should policymakers care?

We’re trying to build resilience and diversification in solar supply chains. Reshoring solar manufacturing capacity to Europe is an essential part of that.

The rest of the world is stepping up their manufacturing efforts – like the US Inflation Reduction Act.

If Europe loses ground now – we might never get it back.

Of course, Europe will always be part of a global supply chain. We cannot reshore everything.

But if we don’t use this chance to bring solar factories back – we risk leaving our goals entirely in the hands of others.

What can policymakers do?

We have 3 clear solutions that could come into action within weeks.

First. Adjust EU State Aid Rules to allow member states to support the running costs of factories – i.e. opex.

Second. Create ‘resilience’ auctions and procurement under the Net Zero Industry Act, meaning we reserve a small but growing part of the market to European solar.

Third. Set up a dedicated EU Finance tool – like a Solar Manufacturing Bank

How can Europe guarantee a level playing field?

Our solutions need to be accompanied with market standards that reflect Europe’s ESG values.

So, we need swift adoption of two things:

1. Robust Ecodesign rules for solar PV, like strong minimum carbon footprint standards

2. Supply chain sustainability legislation, like the Forced Labour Ban and the Corporate Sustainability Due Diligence Directive.

Industry efforts like the Solar Stewardship Initiative set standards on that.

It needs to be recognised in upcoming EU legislation.

What should policymakers not do?

We strongly push back against trade defence measures.

As history has shown, implementing customs duties or minimum prices is the ultimate lose-lose strategy for Europe. It won’t help anybody.

Can Europe do this?

Europe is the home of solar technology.

Policymakers, solar manufacturers and solar developers must forge a new path forward. A path that reaches both EU’s resilience and deployment goals.

We’re united in the knowledge that solar PV is essential to Europe’s strategic resilience.

We have balanced, measured solutions, supported by all companies in the EU solar supply chain, manufacturers and developers alike.

Now we need to seize those solutions — together.

© Shutterstock