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14 December 2022

EU Commission launches scheme for 30 GW solar manufacturing

The European Commission has launched the Photovoltaic Industry Alliance with the goal of developing a 30 GW solar manufacturing base by 2025 “across the full value chain.” It claims this will add $60 billion in GDP, but the modules themselves would only be worth $10 billion directly.

EIT InnoEnergy, the European Solar Manufacturing Council (ESMC), and SolarPower Europe are on the Alliance’s steering committee, with EIT Innoenergy acting as secretariat. Innoenergy is an “innovation engine” and independent body of the EU, while the ESMC and SolarPower Europe are industry associations. These organizations are to determine strategic planning which will, among other things in a seven-point action plan, facilitate access to finance from both public and private sources.

European solar manufacturing efforts had seemed moribund in the past few months, with the latest bad news being REC’s cancellation of a planned 4 GW heterojunction plant production line which would have been established in France.

Things may turn around now, but don’t expect a total reversal just because of a set of NGOs affiliated to the EU, whose financial assets for the scheme are puny compared to what’s being thrown around by the Biden Administration with its’ solar manufacturing subsidies.

Europe’s demand for solar is well over 30 GW, and the Commission doesn’t seem willing to exclude Chinese imports, which will come to around 85 GW this year. Recent EU-wide legislation addressing alleged Xinjiang forced labor in the solar supply chain was left to nation-states to enforce. Even if new factories really do get built in the EU, they will ironically end up selling to the US because of its strict policies on Chinese solar imports.

Unless the EU does something to seriously exclude Chinese modules, then it’s hard to see why a company would build manufacturing capacity in Europe, when it can find subsidies in the US which are at least as generous, plus lower electricity prices to run the operation, plus a thoroughly protected domestic market. The same goes for India.

On the plus side, Europe already has around two-thirds of the polysilicon supply needed for 30 GW, as well as the better part of 10 GW of module capacity, which in any case is the simplest and least capital-intensive part of the supply chain. For wafers and cells, the existing European production capacity is a tiny fraction of the goal.