Europe Rules Out Ban on Chinese Solar Panels

The European Union (EU) has confirmed support for its struggling solar manufacturing sector but has ruled out stopping cheaper imports from China and other non-EU countries.

Speaking to reporters ahead of a meeting of EU energy chiefs, Kadri Simson, EU Energy Commissioner said: "There are different proposals on how we can support our industry, but clearly we cannot close our borders because we need solar panels. We have to support our industry, but we need all the products to meet our very ambitious targets."

The solar power industry is vital to Europe's green energy transition, something Simson pointed out at the recent SolarPower Summit. "Solar PV has risen as the bright star of our energy transition. Installations around the world and in the EU are only going one way. And that is up. Last year, the EU installed 56 gigawatts (GW) of solar PV. This is a record and twice as much as just two years earlier. It is the fastest growing source of electricity, responsible for 8% of electricity generated last year in the EU."

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She also recognized just how overly reliant the sector is on cheap imports from outside the EU. "One of the biggest difficulties we now face is the challenging environment for EU solar PV manufacturers--whether they produce cells or only modules. Cheap products flooding EU markets make it difficult for EU manufacturers to compete. This is very concerning for a number of different reasons. It's also a matter of energy security. We believe it is in everyone's best interest to have diversified global supply chains. So our task now is to find a balance between keeping deployment affordable and supporting EU manufacturers."

Although the EU produces "just a fraction of the solar cells it installs," Simson said that it is home to one of the strongest producers of polysilicon worldwide as well as inverters and trackers. In PV module manufacturing, the EU sector has the capacity to produce one out of every eight modules installed in the EU. Recent EU initiatives have been put in place over the past year to build on this. Under the Net-Zero Industry Act, there is a production capacity benchmark to cover 40% of demand in 2030, including in the solar PV sector. There is also a move to increase the use of non-price criteria in renewable auctions. It also launched a European Solar PV Industry Alliance, which set itself the target of 30 GW of production capacity along the value chain and as Simson said "there is a pipeline of projects waiting for a financing decision".

The comments come at a very difficult time for Europe's solar industry, which has seen plant closures and stockpiling caused by a flood of cheap imports, mainly from China. Last month, Germany's biggest panel producer Meyer Burger (Gwatt, Thun, Switzerland) said that it has begun preparations to shut its Freiberg solar panel plant by April in an effort to halt "sustained losses in Europe." It will result in the loss of 500 jobs. At the same time it will open two plants in Colorado and Arizona. The company stated: "A sharp increase in Chinese production overcapacity and trade restrictions imposed by India and the U.S. resulted in significant oversupply and unprecedented distortion in the European solar market in 2023. Meyer Burger's ability to execute its existing strategy successfully was negatively impacted and now needs to be reviewed in the absence of policies creating a level playing field, such as the Net Zero Industry Act (NZIA) in the EU and subsequent national solutions such as resilience measures in Germany. Meyer Burger's withdrawal as a solar module manufacturer in Europe would further cement the continent's dependence on imports from China and leave Europe's solar energy transition with less safeguards for the future."

According to Johan Lindahl, secretary general of the European Solar Manufacturing Council (ESMC), the European solar PV manufacturing industry is facing "an existential threat ... We need active political and financial support now. Otherwise, we are to lose a majority of the European solar PV manufacturing industry. Now it is the moment of truth if the European Commission and Member States remain committed to the strategic stance that the EU should not become completely import-dependent on solar PV modules as without emergency measures we are about to lose more than 50% of modern EU solar PV module production capacities during the next 2 months."

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