Europe’s BC Ambition Faces Policy Gaps

Key takeaways:

• Cost gaps between European and imported modules are narrowing, supported by inventory clearance, rising electricity prices, among others

• Back-contact technology may find early adoption in high-value segments such as BIPV and residential applications

• Policy clarity and stronger supply-side support remain critical to scaling PV manufacturing in Europe

The Becquerel Institute, a consulting and applied research firm, was one of the partners in the IBC4EU project. At the  TaiyangNews IBC4EU Conference, Philippe Macé presented the European market outlook and policy gaps for interdigitated back contact (IBC) technology.

PV manufacturing in Europe is picking up for various reasons. Economics is turning as module spot prices rise. This is due to inventory clearance in Europe, restrictions on Chinese production capacity expansion, rising electricity prices, current geopolitical bottlenecks, and, finally, policy changes. This is narrowing the price gap between imported and locally produced modules. Building on these positive points, he shared insights into how IBC can identify opportunities in the EU market. Macé gave an example: about 2-3 GW of EU module manufacturing capacity has even survived competition from imported modules priced at €0.10/W. This is partly attributed to the increasing adoption of specialized PV applications, such as residential PV, building-integrated PV (BIPV), and other integrated PV applications, which are no longer niche. At this point, BC technology, which already commands a cost premium, can be viable in the right segments, given its efficiency advantages.

These applications include residential building-attached PV (BAPV) and BIPV – applications with lower cost sensitivity than in other markets and a keen focus on aesthetics. Even in the commercial & industrial (C&I) BAPV market, where cost sensitivity is higher, low-cost IBC can find adoption.

Although not connected to the grid, niche applications like vehicle-integrated PV (VIPV) can also use IBC. All these application segments currently account for a 50% share of European PV installations, and the Becquerel Institute projects this share to increase through 2035 and remain at that level through 2050.

Talking about policy, Macé specifically mentioned the Net Zero Industry Act (NZIA) and the Industry Accelerator Act (IAA), and how these can support or create bottlenecks in driving BC manufacturing in Europe. While NZIA’s objective is to create a 40% reserved market for the EU, he stated that it is still unclear how much of this share will be allocated to EU-made resilient products. There are 5 countries that have already taken advantage of these regulations by issuing bonus schemes, reduced VAT on sustainable products, et cetera. However, if NZIA regulations are implemented across all 27 EU member states, it could create an annual market of 18-35 GW across the residential, C&I, and utility segments by 2030.

The policy-related gaps currently blocking growth potential in Europe are linked to proposals from the IAA. Macé highlighted that the IAA allows non-EU partner countries in trade agreements with the EU to receive the same preferential treatment as local producers. The scope of IAA is restricted to cells and inverters only, and its solar provisions will begin to apply only from 2030. Moreover, the gap on the supply side, with the absence of guarantees, production-linked incentives, and other supply-side mechanisms – similar to those used in other regions to build the PV industry – remains a key issue under NZIA, according to Macé.

If these issues are fully addressed, with support mechanisms on the supply side and regulatory updates, and if all member states implement the regulations, then manufacturing growth can meet the projected demand in the EU through 2050, reaching about 64 GW in an ambitious scenario. Macé also projected ‘conservative’ and ‘stay-in-the-game’ (current pathway) scenarios, which do not meet the demand, with only 32 GW and 16 GW, respectively, by 2050.

Macé concluded his talk, titled BC in Europe: Market Outlook Meets Industrial Ambition, by stating that IAA regulations need to be fixed. At the same time, the implementation of NZIA needs to be accelerated by all EU member states. One key point is to make sustainability a differentiator, which can be an advantage for local manufacturing.