European Solar PV Community Demands Political Action

Solar PV Industry In Europe Wants Up To €0.15/W Public Support For Next 10 Years For Local Manufacturing & €40.0/MWh Energy Price To Build Sustainable Value Chain

European Solar PV Community Demands Political Action

Current annual solar PV manufacturing capacity of Europe, excluding Turkey and Russia, remains low due to high costs to build upstream manufacturing processes within Europe, according to key stakeholders of European PV industry. (Source: Fraunhofer ISE)

  • Some key stakeholders in the European PV industry have issued a joint statement demanding urgent political action to boost efforts for local PV manufacturing
  • They want public support ranging between €0.10/W to €0.15/W to install and operate both new and existing PV facilities
  • In addition, they demand a competitive energy price of €40.0/MWh to be able to afford to produce energy intensive raw materials for locally produced modules
  • Supportive regulatory environment and financial support mechanisms can help them build a sustainable and competitive value chain locally, they argue

Wacker, Meyer Burger, NorSun, Norwegian Crystals, ECM Group, Fraunhofer ISE and Fraunhofer Center for Silicon Photovoltaics CSP have come together as key stakeholders from the European solar PV community to demand urgent political action to revitalize a sustainable PV manufacturing industry in the continent, with public support of €0.10/W to €0.15/W of produced PV over next 10 years.

This capex support is needed for the installation and operation of both new and existing PV manufacturing facilities along with a competitive energy price of around €40.0/MWh. Drawing a comparison with the US Inflation Reduction Act (IRA), the team says this capex support demanded is less than $0.11/W to $0.18/W in America (see Inflation Reduction Act 2022 Now A Law).

They demand significant capex incentives of at least 50% for a limited initial production capacity of 30 GW throughout each step of the PV manufacturing supply chain ‘independent on origin of the equipment’ along with capex incentives for another 70 GW capacity of initial 50% for local European developed, manufactured and supplied equipment and consumables going down to 10% within 5 years.

Local content incentive of 10% must be in place until 2033. Another proposed measure is to implement dedicated R&D funding program for equipment development for upstream applications at substantial height with funding rates of at least 75% for companies and 90% to 100% for R&F institutes.

It would ‘resolve Europe’s severe energy dependence significantly, while increasing economic value and creating jobs’.

Currently, all of Europe (excluding Turkey and Russia) has a cumulative installed annual production capacity of 8.28 GW for modules, 760 MW for cells, 1.40 GW for ingot and wafer, 22.1 GW polysilicon and 38.2 GW metallurgical grade silicon (mg-Si). In comparison, European Union alone is targeting 600 GW AC installed solar capacity by 2030 (see EU Announces 600 GW AC Solar Target By 2030).

Recent supply chain disruptions make it imperative to build a local, sustainable solar manufacturing value chain instead of depending on imports, but with high costs to build and operate the upstream value chain, financial support and right policy framework are needed, they demand.

Pointing at the business risk for European companies in establishing a sustainable solar manufacturing value chain being very high, these stakeholders want the policymakers to help create a ‘fair level playing field on an international level’.

While the upstream value chain players are ‘convinced’ of their ability to implement several dozens of GW production capacity equivalent within Europe over the next 5 years, they need 5 years to 10 years of ‘dedicated and continuous investment embedded in a sustainable economic and regulatory environment’, to build a resilient supply chain.

Citing some of the business risks they face in the task that prevent them from making positive investment decisions, these stakeholders list some of these as:

  • high capex expenses and long payback times
  • Unpredictable market environment
  • Highest standards of sustainability across the value chain including those related to environmental, CO2 footprint and human rights whose implementation raises operational costs
  • Unleveled playing field regarding electricity availability at competitive prices compared to the Chinese and US power prices and electricity market mechanisms, especially for energy-intensive processes of producing Si-metal, polysilicon, ingot/wafer production.

Among measures suggested in a joint statement, they demand the following:

  • subsidies for investments in PV manufacturing and supply item production lines, as well as for respective operational expenses of new and existing capacities
  • warranties for a competitive energy price especially for energy intensive process steps of the solar manufacturing value chain
  • low interest-rate loans and credit guarantees
  • local-content schemes
  • tax related to CO2 (eq) emissions in product manufacturing and faster deployment of renewables to decarbonize energy generation

“A temporary industrial policy to specifically promote the renaissance of a manufacturing industry for renewable energies is strategically wise and urgently needed. Industries based in Europe help securing the affordable energy supply of the future and also pay taxes here – if they are set up elsewhere, Europe will miss out twice in the end,” said Meyer Burger CEO, Gunter Erfurt.

NorSun’s Chief Commercial Officer, Carsten Rohr added, ‘We need the right policy framework and more financial support mechanisms for making investments into PV value chain more attractive in Europe, especially for Capex and energy-intensive upstream manufacturing such as ingot and wafer production. We should for example be able to benefit from sustainable production, both in terms of high environmental standards – including low carbon footprint – and social standards.”

The joint statement by these key stakeholders is available on Fraunhofer ISE’s website.

About The Author

Anu Bhambhani

SENIOR NEWS EDITOR Anu is our solar news whirlwind. At TaiyangNews, she covers everything that is of importance in the world of solar power. In the past 9 years that she has been associated with TaiyangNews, she has covered over thousands of stories, and analysis pieces on markets, technology, financials, and more on a daily basis. She also hosts TaiyangNews Conferences and Webinars. Prior to joining TaiyangNews, Anu reported on sustainability, management, and education for leading print dailies in India. [email protected]

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