The European solar panel market is grappling with an inundation of low-priced Chinese panels, causing prices to plummet by more than 25% in recent months.
This concerning development has been highlighted by Solar Power Europe, an association deeply concerned about the survival of European solar panel manufacturers. Walburga Hemetsberger, the CEO of SolarPower Europe, has urgently called upon the European Commission to take action, stressing the need to safeguard Europe's critical technology supply chains.
So, what's jeopardising these European supply chains? To find the answer, we must look to the United States and the Inflation Reduction Act, a sweeping American re-industrialisation initiative. This act links company subsidies to the requirement that the components used in panel manufacturing are produced on American soil, which poses a problem because China dominates this sector, manufacturing a staggering 80% of the technology's components, according to an analysis by L'Echo.
Between 2000 and 2010, European manufacturers, who once dominated the market, were surpassed by China, which invested over $50 billion in its photovoltaic industry during that period. Many European manufacturers have gone out of business in the past decade. Unable to find a foothold in the United States, cheap Chinese components have now flooded the European market.
According to Solar Power Europe, there are sufficient Chinese modules in the Netherlands to meet European panel demand for the next two years. While competitive prices at the production level have not translated into significant savings for consumers, it's the European producers who are feeling the brunt of this fierce competition. They are not planning to passively accept this surge in Chinese products.
In Belgium, the sole remaining active manufacturer, Belga Solar (formerly Evosel), has recently quintupled its production capacity, equivalent to 70,000 panels per year.
Despite this substantial increase, it still represents only 1% of the market, underscoring the inadequacy of European manufacturers' efforts. In conclusion, L'Echo suggests that EU Member States should consider investing and pursuing a robust, potentially interventionist industrial policy to reduce dependence in this critical sector.
