The European Commission on Friday (9 December) officially launched the EU’s solar photovoltaic industry alliance, with the aim of regaining production lost to China and establishing a “Made in Europe” industry.

The new alliance will promote investments in large-scale factories, aiming for an annual output of 30 gigawatts (GW) for each key solar component by 2025 – more than six times the current capacity of around 4.5 GW per year.

“With this alliance, we want to create full solar PV value chains” in Europe in order to “reduce our dependencies” and create value in the European Union, said Thierry Breton, the EU’s internal market commissioner who spoke at the official launch of the alliance.

Europe has a lot of catching up to do. Of the 450 GW of PV modules that were produced worldwide in 2021, less than 9 GW were manufactured in the EU.

This year, almost 40 GW of solar PV is expected to be installed across the 27-nation bloc – a new record. But this will be achieved thanks to a doubling of solar PV exports from China, Breton pointed out.

“We lost our market shares and we are struggling to tap into the jobs potential in this sector,” he warned.

For Breton, this is the “green paradox”: although solar energy is “absolutely essential” for Europe’s decarbonisation and energy independence, the bloc is almost entirely dependent on China regarding manufacturing.

Beijing currently controls 80% of global solar PV manufacturing capacity. And for global polysilicon and ingots, the share will soon reach almost 95%, Breton remarked.

“Put differently, one in seven panels worldwide” is manufactured in China – often not sustainably, the French EU commissioner said.

“This is the gap and the opportunity,” he added, saying this is where the new solar industry alliance will help.

‘Not one second to lose’

The industry alliance is part of an EU solar energy strategy, published in May, which was published alongside broader EU plans to end Europe’s reliance on Russian fossil fuels following the invasion of Ukraine.

The objective is to deploy almost 600 gigawatts (GW) of solar PV capacity by 2030, with an interim target of 320 GW by 20203  – more than double the bloc’s current output.

More recently, the Commission tabled a proposal to speed up permitting for renewables that are expected to accelerate solar energy deployment in the EU. Solar rooftop projects, for instance, and small solar installations below 50 kW of capacity will be exempt from a dedicated environmental impact assessment.

According to Breton, Europe needs to accelerate on permitting and finance.

“We cannot afford to wait two years for financing some projects,” he said, adding he expected more engagement from the European Investment Bank (EIB) in this respect.

Developments are also expected on the regulatory side, with Breton announcing new environmental and social “criteria” for solar panel manufacturing in mid-2023, Breton said. “This is going to help with the sustainable level playing field, including by looking at carbon footprint requirements” for solar PV panels, he said.

The Frenchman insisted that Europe needed to move fast, saying 100,000 jobs in the industry were at stake.

“There is not one second to lose”.

Industry both enthusiastic and apprehensive

The European solar industry applauded the initiative but also expressed concerns about lack of funding and rising manufacturing costs caused by high electricity prices.

“After years of concern, the European solar sector is encouraged by historic EU political attention and investment opportunities being directed toward building solar panels and components,” said  SolarPower Europe, an industry association.

The only missing bit is “dedicated funding to build and run factories,” it said in a statement.

Others pointed to gaps in the EU’s approach. “To be truly successful, this alliance must be embedded in a bold and strategic master plan for the continent’s future industrial base,” which also looks at energy costs for manufacturers, said Wacker Chemie AG, a German chemical company and leading manufacturer of polysilicon, a key component of solar PV modules.

“Electricity prices are far too high, and European energy-intensive companies are struggling hard to operate competitively with their peers in other regions of the world, where power prices are much lower,” Wacker Chemie said.

“Europe cannot do with just half-measures. The future belongs to those who are bold and who have a clear goal in mind,” it added, citing the Inflation Reduction Act in the US as an example.

Source: Euractiv.com