The EU meets NZIA targets only for inverters and trackers, but lags far behind in cells and modules, says a new CETO report
Planned factories and any expansions could raise outputs, yet wafer, cell, and module capacity remain below 2030 needs
Europe faces strong price pressure from China, driving local manufacturers into distress and bankruptcies
CETO calls for rapid, firm policy action and stable regulations to boost investor confidence and scalability
The European Commission’s Clean Energy Technology Observatory (CETO) warns that the EU’s efforts to rebuild its solar PV manufacturing base are not keeping pace with global market growth. It calls for stronger, faster policy action from member states to secure a resilient solar PV supply chain.
According to the report, current initiatives to build competitiveness in the global PV value chain under the Net-Zero Industry Act (NZIA) are positive but insufficient to keep pace with the accelerating expansion of global solar capacity, projected to reach 6 TW by 2030. The EU is expected to install around 720 GW by the same year, but its manufacturing sector lacks the scale needed to support this growth.
In its report, CETO stresses that building a resilient domestic supply chain is essential for long-term competitiveness. While the EU meets NZIA goals for inverters and PV trackers, it falls far behind in producing ingots, wafers, cells, and modules. Polysilicon production also requires renewed investment to close existing gaps.
Currently, the EU has PV-grade polysilicon manufacturing capacity of 25 GW DC, 2 GW for PV cells or equivalent, and 12 GW of PV modules, but none for PV-grade silicon ingots or wafers. It does have a significant capacity of 142 GW DC for PV inverters and a combined 121 GW DC for PV trackers and their mounting structures.
With this, the bloc meets its 2030 goal of making at least 40% of its annual solar needs only for inverters and trackers, but the capacity is far below what’s needed to support 76 GW DC deployment in 2030, according to the report writers.
The report estimates that if all the planned new factories in Europe do get built along with expansions, the EU’s production could reach about 33% of its wafer needs, 17% of cell needs, and 43% of module needs. Polysilicon capacity would still fall short of the 40% target.
According to the report, the EU also aims to account for a 15% share of global manufacturing by 2030, but at the current pace, it will only be able to accomplish this for PV inverters and trackers, along with their mounting structures, with respective shares of 23% and 34%.
One of the major challenges it faces is the competition from the Chinese companies. “The higher energy, environmental protection costs and labour costs (that can be however compensated with higher automation) in the EU and the very low prices and oversupply originating from China, have resulted in several EU manufacturing companies struggling with severe competition and ultimately arrive to bankruptcies,” point out the writers.
Political commitment is also highlighted as a critical factor in developing a resilient supply chain for the EU PV manufacturing space. The authors note that stable and reliable regulatory frameworks are necessary to attract investors and encourage large-scale manufacturing projects.
“It is imperative that EU Member States finally react fast now and commit to truly support the EU PV manufacturing by implementing firm policy measures,” they recommend.
The complete report titled Photovoltaics in the European Union Status Report on Technology Development, Trends, Value Chains and Markets, is available on the commission’s website for free download.
This report follows a joint letter from SolarPower Europe and European Solar Manufacturing Council to EU policymakers calling for bold and immediate commitment to domestic solar PV manufacturing beyond the NZIA (see EU Solar Industry Calls For Immediate Manufacturing Support).