Europe is installing more solar panels than ever before, thanks to a flood of cheap Chinese solar panels, driving installations by 40% last year. But it comes at a hefty cost: Local solar manufacturers are on the brink of a total collapse that could happen within weeks.
The European Union is considering what steps to take, in that some 95% of solar panels and parts used in the EU are coming from China, according to International Energy Agency data, Reuters reports.
Reap the benefits of all that green energy with containers full of Chinese solar panels, all while crushing the domestic sector and putting people out of business?
“The situation is really, really, really troublesome,” Johan Lindahl, secretary general of the European Solar Manufacturing Council (ESMC), told Politico.
European local solar panel manufacturers have reached a crisis in that they say they can’t compete with cheap imports and oversupply. Businesses are shutting down, while a “glut” of Chinese panels are sitting in warehouses around Europe, according to an earlier report from Reuters last year. The sector has warned that half of its capacity could close within weeks unless the government takes radical action – and that means tariffs.
But not everyone is happy about that. German Economy Minister Robert Habeck wrote to the EU that tariffs on Chinese imports could end Europe’s impressive expansion of green energy, making 90% of the PV market more expensive.
“I have heard that the commission may impose safeguard measures against imports of photovoltaic (PV) modules from China. I have very strong concerns about this,” the letter said, according to Reuters.
Habeck added that the move would put European companies that assemble and install solar panels using Chinese parts at risk as well.
It’s all been a bitter pill for France, which has high hopes of a European green energy reindustrialization. Germany’s solar support has been in peril due to a budget crisis, while Spain hasn’t ruled out tariffs on solar panel imports. A government official from the Netherlands told Reuters that the country “wants to cover solar PV imports with the EU’s carbon border tax.”
For its part, Italy just announced a €90 million investment in a solar panel factory in Sicily.
EU measures that are on the table include a law to fast-track permits for local manufacturers and give EU products an advantage in “future clean tech tenders.”
Electrek’s Take
Trade restrictions are no light matter – especially in that the EU targets more than 320 GW of newly installed PV capacity by 2025, and 600 GW by 2030 – and it’ll likely need Chinese PV to make that happen.
Back in September, the EU launched an investigation into the Chinese EV industry, as European companies are struggling to compete with the cheap, high-tech Chinese EV imports, made by low-cost labor, entering the EU. The EU is probing into what it says are unfair subsidies and bank lending campaigns from Beijing that fueled the outsize growth in China, with fears that China is building EV plants far beyond levels needed for domestic demand. Meanwhile, the US and Europe are tightening their rules on Chinese cars and EV parts being sold in their countries, with tariffs so high in the US that China has turned its focus on other areas, namely South America, Asia, and Europe.
Meanwhile, some European panel makers are saying that China has been doing the same thing with solar panels. “The solar industry in China has been strategically subsidized with hundreds of billions of dollars for years,” Gunter Erfurt, CEO of Swiss PV maker Meyer Burger, told Reuters.
Europe, for now, just can’t compete – and at least needs to buy some more time to catch up.
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