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Europe is losing the global race for solar components manufacturing due to high energy and labor costs and supply chain issues, according to solar industry executives who say the EU lacks incentives for manufacturers to plan future investments.
Following the Russian invasion of Ukraine and facing competition from China and the U.S. in clean energy technology, the European Union has recently unveiled the so-called Green Deal Industrial Plan to boost the EU’s manufacturing capacity for the net-zero technologies and products required to meet Europe’s climate targets.
However, the bloc needs to do much more to ensure that Europe is competitive with low-cost Chinese manufacturing and the attractive incentives in the U.S. Inflation Reduction Act (IRA) to lure investments in European clean energy manufacturing, analysts and industry associations say.
“Europe isn’t profitable,” Gonzalo de la Vina, president for the Europe, Middle East and Africa region of Chinese solar energy firm Trina Solar, said at a solar industry event in Madrid this week, as carried by Reuters.
According to Rystad Energy, panels made in China often cost as little as two-thirds of European-manufactured capacity.
Last month, the SolarPower Europe association warned that record-low prices of solar imports to Europe risk undermining the EU’s strategic autonomy goals and driving more European manufacturers into bankruptcy.
“Right now, we risk losing a key strategic industry in Europe, precisely at the moment when energy transition geo-politics require supply chain diversification, and a revival of the European solar manufacturing sector,” SolarPower Europe wrote in a letter to the EU’s top institutions.
SolarPower Europe also responded this week to reports that European governments are considering applying trade barriers to solar PV products entering the EU single market, saying that “Trade barriers are not the solution. As history has shown, investigating and implementing trade barriers on solar is the ultimate lose-lose strategy for Europe.”
