According to a VDMA report on PV module production competitiveness in Europe, n integrated module factory in Germany would be the most expensive option, while a Poland based fab could produce modules at 24.3 euro cents/W, only 1 cent above the Chinese factory. Assumed, Europe had its own competitive materials supply chain, the Polish plant could even produce at cost below the Chinese factory.
- Increasing dependence of Germany and Europe on Asia for solar modules can be curbed if an integrated solar production fab with 5 GW annual production capacity is established in Europe
- It would account for 1/30th of the global annual production capacity and should cost over €1 billion, according to a study by Fraunhofer ISE for VDMA
- Such a fab should produce modules cost competitively with the help of a local closed supply chain for essential materials; it would also help save transport costs and the output can be sold to neighbouring regions
- This can also support the cause of energy sustainability as the reduction in transport cost will also bring down CO2 emissions significantly
Asia led by China is the world’s leading producer of solar cell technology. Despite having ‘technological competence’ Germany and Europe have been becoming increasingly dependent on Asia for their solar module needs. However, this situation can be reversed for Europe to produce cells and modules at competitive costs and without state subsidies, claims a Fraunhofer ISE study, commissioned by German Engineering Federation VDMA.
Fraunhofer ISE in the study compares the manufacturing costs of a complete vertically integrated PV fab (ingot-to-module production) located in Europe with the same production setup in China. The German research found out it’s possible to produce a module in Europe for the European market at competitive costs if there are economies of scale with a fab as large as over 5 GW of annual module production. Savings on transport costs also need to be considered for this.
A production facility with this kind of capacity can be realized with an investment of as little as over €1 billion ($1.12 billion), the study claims. A 5 GW plant would be 1/30th of the current global manufacturing capacity of 150 GW and would generate thousands of direct and indirect new jobs.
According to the report, the all-in module cost comparison for the different scenarios of a PV value chain of 1 GWp leads to a difference between a European production and a production in China of €0.01/Wp. An integrated factory in Germany would be the most expensive option, while a Poland based fab could produce modules at 24.3 euro cents/W, only 1 cent above the Chinese factory.
Under the EU Recovery scenario, which assumes volume production in Europe will once again also result in a re-built of a supply chain in the region with material cost similar as in Asia, the authors of the study see an overall reduction of the ‘all-in’ cost for the production of PV modules in Europe by up to €0.03 ($0.034) per Wp. This would result in all-in cost of 22.3 euro cents/W, which would be even below Chinese production cost.
In addition, there are also environmental benefits for producing modules in Europe for its own needs. “With a European production of solar cells and modules, however, CO2 emissions could be reduced to a minimum. Moreover, the topic of sustainability could be introduced into the energy system as a result of recycling economy,” said Dr Jutta Trube, head of VDMA Photovoltaic Equipment. “Politicians can support this process with appropriate general regulations, such as suitable expansion corridors, priority feed-in of renewables and a fitting grid infrastructure.”
The first findings of this study to compare costs of a PV cell and module production in Germany and Europe with those in China were initially shared during Intersolar Europe in May 2019 (see Experts Discuss Possibility Of European PV Production).