Political Interest Must For EU PV Manufacturing Growth

• JRC report on EU solar PV industry says the bloc needs to grow its manufacturing capabilities in line with the growing demand 
• It should make use of its edge in PV technology to target higher efficiencies, and reduce costs and use of material 
• EU can become competitive in PV manufacturing when done at economies of scale with fabs that are fully integrated across all stages of the value chain 
• The lack of financing for the sector is a problem for players in the EU while other trading partners offer direct and targeted support schemes 

A technical report by the Joint Research Centre (JRC) of the European Commission recommends that the European Union (EU) should build a solar value chain that's able to supply at least 25% to 35% of its market. This is necessary as a precaution for the bloc to avoid a fallout of international supply chain disruptions and resultant trade frictions, since the global demand for PV components is growing even faster than in the EU. 

"At the moment, this is possible for the production of polysilicon, backsheets, contact materials, inverters and balance of system components. Additional new capacities for wafers, cells and solar glass production are needed," reads the report. 

Titled Photovoltaics in the European Union, the report is part of the annual series of reports from the Clean Energy Technology Observatory (CETO). It addresses the technology maturity status, development and trends, value chain analysis and global market and the EU positioning in this space. 

PV growth not in line with demand 

At the end of 2022, the EU had an installed solar PV capacity of over 211 GW DC, which is projected to increase to 328 GW DC in 2025, between 500 GW DC and 1 TW DC in 2030 and between 7 TW DC and 8.8 TW DC in 2050. The bloc will contribute to a projected global installed PV capacity of between 22 TW DC and 60 TW DC in 2050. 

The EU has set itself a target to produce 30 GW of PV along the entire value chain by 2025, and manufacture 40% of installed solar PV within the continent by 2030. Planned expansions, as announced so far, span polysilicon to wafer, cells and modules across various nations. 

Though encouraging, the announced PV manufacturing support schemes in Europe are not in line with the global market growth, according to the report writers. Considering the large-scale expansions planned, requisite supply of raw materials can become crucially relevant in the short term, they warn. For instance, the use of silver for connections or PV glass that currently needs to be imported, mainly from China. 

To cater to this expected PV growth, the EU needs to focus on its technology improvement. 

Technology edge  

What works for the EU is its leading position in the space of PV innovation, high-value patents and highly cited publications. The bloc is 4th on the list of countries with the highest number of patents in solar PV technology after China, South Korea and Japan, in that order. 

The report writers recommend it to continue working in the space further, targeting higher efficiencies and bring down use of material and lower costs, at least for the next few years. 

Additionally, the bloc is rigorously working on research and innovation of next-generation technologies such as perovskites, tandem and multi-junction cells. As a result, it has advanced and highly automated manufacturing techniques for the future as the world transitions from PERC to TOPCon and soon to tandem. 

The low-carbon footprint for locally sourced and produced PV modules will also work in its favor. It will lead to the creation of green jobs in both manufacturing and deployment sector, but PV manufacturing in the EU can become competitive when it is done in GW-scale fabs that are fully integrated across all stages of the value chain, opine the writers. 

"Therefore, the promising advancements in photovoltaics are crucial for the next years, both to reach EGD (European Green Deal) targets and to favor the emergence of competitive new European industrial players and clusters producing higher value products with the ability to relocate an increased share of the photovoltaics value chain into Europe," reads the report.  

However, high energy and labor costs in the EU compared to its trading partners and lengthy planning and permitting procedures threaten its growth. Lack of requisite financing is another problem area that gets compounded with direct and targeted support schemes elsewhere in the world, namely the Inflation Reduction Act (IRA) in the US and the Production Linked Incentive (PLI) scheme in India. 

Calling current ambitions for PV in the EU insufficient to effectively contribute to the necessary future renewable energy supply, the writers recommend innovative forms of deployment as agrivoltaics, VIPV, floating solar, along with utility-scale and rooftop PV. 

The report writers believe a successful PV manufacturing industry in the EU requires a resilient, domestic supply chain, along with political interest and promotion for manufacturing expansion. 

The complete report is available on the commission's website. 

In another JRC report from the commission published in October 2023, analysts said that using only 1% of the EU's farmland, it can exceed the 720 GW DC target under the Solar Strategy, achieving 944 GW DC (see Agrivoltaics Can Help Exceed Targets Under EU Solar Strategy).