European Solar Developments 2022

Europe aims to become a climate neutral continent by 2050 with the help of renewables, especially solar power. With challenges posed by COVID-19 pandemic and the ongoing Russian invasion of Ukraine and skyrocketing electricity prices, not to miss the threat of climate change, Europe is now more than ever laser-focused on solar. No wonder then the solar potential is massive in the short and long run.

During TaiyangNews webinar on European Solar Developments 2022 on April 21, 2022, TaiyangNews Managing Director Michael Schmela reiterated SolarPower Europe’s (SPE) assessment of as much as 1 TW potential for European solar by 2030, as against a very conservative 525 GW aimed under the European Commission’s RePowerEU plan (see EU’s REPowerEU To Reduce Russia Reliance Short On Solar)

Stating the adage of where there is a will, there is a way, Schmela pointed out that if in the wake of Russian attack on Ukraine, the region was able to synchronize the European power grid with the Ukrainian power grid, which happened in a matter of days,  it can very well increase installations from 27 GW in 2021 to over 100 GW per year by 2025 and achieve a total of 1 TW solar, up from 165 GW end of last year –  if it really wills it to be so. The hope is on the European Commission to raise its 2030 renewables target to at least 45%, from 40% in the current proposal (the existing 2030 target is 32% RES). In May, the Commission will publish its Solar Strategy, for which SolarPower Europe has contributed several recommendations it considers fundamental to bring solar installations to the TW-level and output by 2030 that is close to the level of annual gas imports from Russia of 155 bcm (see ‘1 TW Of Total EU Solar Capacity By 2030’). Indeed, several European countries, led by Germany, have increased their solar targets dramatically.

So then, how does the continent manage this gigantic and growing interest in solar power in a sustainable manner? The TaiyangNews Webinar on Solar Demand, Supply, And Prices In Europe Today And Tomorrow brought together industry experts and colleagues to seek answers and direction.

Senior Analyst with global market research consultant Bloomberg New Energy Finance (BloombergNEF), Pietro Radoia expects global solar PV installation capacity in 2022 to add up to 220 GW under conservative estimates, but on an optimistic note, it could go up to 268 GW. To this, Europe’s contribution is likely to be 28 GW under conservative and 36 GW under optimistic scenarios.

Pietro Radoia of BloombergNEF expects Europe to install 28 GW of new solar capacity under conservative estimates, but under right circumstances, it can grow to 36 GW in 2022. (Source: TaiyangNews)

BloombergNEF counts global annual manufacturing capacity for polysilicon to have reached 293 GW at the end of 2021, 383 GW for ingots, 406 GW for silicon wafers, 431 GW for cells and 525 GW for modules. While silicon supply is the bottleneck now, as of 2023 it will be rather on the wafer side.

In Europe over the next 3 years, Radoia counts 45% of the additions to come from ground mounted and 55% from rooftop solar. There is a significant potential to stimulate rooftop solar in various European markets. Germany, France and Italy for instance, have been encouraging this segment via various policy frameworks already existing, and can be tweaked to do more.

There can more be done to expand rooftop solar for residential and commercial buildings also bringing in energy storage to decarbonize the grid, and with heat pumps provide energy security to individual households, but this would depend on political will and supportive frameworks to open up the market and support its development.

Presenting an overview from the world’s largest solar market China, Jessica Yang from the Consulting Department of China based solar PV consulting firm Gessey NewEnergy Info expects the Asian giant to account for some 77 GW of new solar capacity in 2022 with installations peaking in the 4^th quarter, to the global total of around 224 GW. As of next year, demand would exceed 100 GW.

Yang assured that the ongoing COVID-19 resurgence related lockdowns aren’t expected to have any significant impact on the national supply chain or project build as so far only around 100 MW of projects have been known to have delayed. She stressed that mainstream PV manufacturers maintain high operational rates and shipments are being re-routed from Shanghai through Wuxi and Guangdong ports to minimize delays.

Gessey NewEnergy’s Jessica Yang sees polysilicon prices to remain high in the near term as manufacturers running their fabs for past 10 months at full capacity, undertake annual maintenance, while new capacity comes online. (Source: TaiyangNews)

Reflecting on prices which were a sore point for the global industry in the last 2 years, Yang said average prices for this critical element of silicon supply chain increased 8% since January 2022 to RMB 250 per kg at present, and 190% from January 2021.

According to her, new polysilicon capacity is scheduled to come online latest by November 2022, however the market will still be on a short supply for polysilicon. That’s because manufacturers who have been running production non-stop for over 10 months, need to run their annual maintenance of the fabs for 1- or 2-month period.

Polysilicon prices can be expected to really drop substantially not until December 2022 as new supply hits the market starting from June. It is currently contributing to rising cell prices. Wafer prices are also hitting north. All of these factors are increasing the cost of modules and Yang believes there is no room for price decline in the near future either.

Executive Panel

Michael Schmela of TaiyangNews engaged the executive panel during the webinar to understand the challenges and opportunities Europe has to expand solar capacity to meet its decarbonization targets.

German solar PV project developer and EPC company Enerparc’s COO Stefan Müller sees 3 major challenges – permitting, module supply, and lack of skilled technicians and labor on the installation side as the European solar market currently faces, exacerbated due to the ongoing war in Ukraine.

At the same time, he pointed out that the growth of subsidy free solar, without any rigid deadlines, can be a tool to balance supply and demand along with bring down high prices, as developers are at liberty then to wait out till module prices are reasonable.

As massive amount of solar energy is planned to be built, developers and investors should watch out for grid curtailment that could be a challenge, according to BloombergNEF’s Pietro Radoia.

Global solar module maker JinkoSolar Europe’s Head of Sales Central Europe and Turkey, Arda Kristaporyan said Europe can very well achieve 100 GW annual deployment in 2025 going by its technical potential, but it would need a concerted effort to get there, including easing bureaucratic methods, ensuring enough manpower and regulatory support. JinkoSolar is  dramatically increasing its shipments to Europe. While total module production capacity will reach 60 GW this year, it plans to ship nearly 10 GW to Europe, nearly doubling last year’s shipments.

Like Kristaporyan,  in his final statement Müller said that 100 GW per year by 2025 in Europe should be generally possible, as permitting issues and the installer shortage will have been solved by then. The big question will be module supply. Looking at Kristaporyan he said with a smile: ‘It all depends on module supply from Asia. If these guys ship enough products, we will install it in Europe.’