What’s happened in two years since the EU Solar Strategy?

The European Union has set a goal of at least 30 GW of European solar manufacturing, at each stage of the value chain, by 2030. Right now, however, European solar manufacturers are facing a crisis. Market forces are driving down the price of solar components, making it difficult for Europe’s solar industry to sell their products. Some parts of the European solar value chain are particularly impacted, like solar modules and wafers. We continue our urgent calls to support these critical links in the solar-led energy transition.

This week marks the second anniversary of the landmark EU Solar Strategy, which came alongside the REPowerEU Communication in 2022. The Solar Strategy marked the first ever solar-specific political package from the EU. Originally expected in summer 2022, the ongoing Russian invasion of Ukraine accelerated the files as Europe rushed to get off Russian gas. The Solar Strategy included a 750 GW deployment target, as well as a – since revised – manufacturing target, for 2030. The European Commission marked the occasion by publishing guidance notes ?this week that boost the Net Zero Industry Act, as well as the Grids Action Plan, and the Wind Package.

So, what’s changed in the last week, and the last 24 months, and what does it mean for European solar manufacturing?

Policy Friday Focus: The EU Solar Strategy

First, let’s remember the context in which the Solar Strategy arrived. The most recent market data we had in May 2022 was that, in 2021, Europe installed 28 GW of solar – more than 40% more than 2020. Europe’s total solar fleet was around 170 GW. Flashforward to today, Europe installed 56 GW of solar in the last year, and the continent hosts more than 260 GW of solar.

The sector is growing up – but like any adolescence, it comes with growing pains. No longer does the sector forecast 40% year-on-year growth, in fact, the double-digit growth rate of solar is not guaranteed in 2024. While still growing, the sector is running into grid challenges, facing an inflationary environment, and European manufacturers are facing incredible pressure.

The Solar Strategy endorsed the existing manufacturing target set by the now-retired European Solar Initiative. Co-founded by SolarPower Europe in February 2021, the European Solar Initiative was an industry effort to support European solar manufacturing, which set its sights on 20 GW of solar manufacturing, at each stage of the supply chain, in Europe, by 2025. The EU Solar Strategy replaced the European Solar Initiative with the European Solar PV Industry Alliance , launched by EU Commissioner for Internal Market Thierry Breton in December 2022.

The 20 GW goal was also updated under the Net-Zero Industry Act, to 30 GW by 2030 – ideally with project financing in place for 2025. Despite difficulties facing European manufacturers, the manufacturing goal remains possible but only with the right political will. For now, there are gigafactories in the pipeline, with CARBON , HoloSolis and 3SUN planning significant capacities this decade.

Nevertheless, the dozen companies who have faced production halts, layoffs, or bankruptcies since August 2022 tell a clear message – to keep and scale manufacturing, we need political support. That means updating EU State Aid rules to make it easier for Member States to support the running costs of manufacturers, rolling out NZIA-inspired resilience policies in the Member States as soon as possible, and setting up dedicated EU financing, like an EU Solar Manufacturing Facility.

REPowerEU turns two

On the second anniversary of the REPowerEU package, the EU’s effort to get off Russian gas launched in 2022, the EU has introduced a new set of guidance notes to support renewables' roll-out. This follows the emergency renewables law that came in December 2022, and the finalisation of the updated Renewables Energy Directive in November 2023.? The initiative includes:?

• An update of the recommendation and guidance for EU countries on renewable project permitting;
• Guidance to EU countries on the designation of renewable acceleration areas;
• Recommendation and guidance to EU countries on renewable auction design;
• The launch of an EU digital platform on auction planning.

The acceleration of permitting, and the involvement of local communities, are two prerequisites to reach our REPowerEU targets. It is therefore good to see the Commission recommendation for prioritising renewables and infrastructure in permitting, while reinforcing citizens’ engagement. The Commission is also providing much-needed guidance on mapping and acceleration areas, which aligns well with SolarPower Europe’s Guidance on the topic.

Leveraging public auctions for resilience and sustainability is a good way of rewarding companies beyond price-only. These criteria, however, need to be ?technology specific and apply as award criteria, not as pre-qualifications as that risks leading to undersubscribed auctions. SolarPower Europe is currently finalising its position on what such clear and practical rules for solar auctions look like.

Solarcoaster:

The latest ups and downs in the EU solar manufacturing landscape.

INNOVATION – Fraunhofer ISE reveals rotary printing technique for HJT cell metallisation.

TRADE – US tariffs on Chinese PV cells doubled to 50%.

EXPANSION - French manufacturer Carbon reveals €1.7 bn pilot plan for 500 MW TOPCon factory.

TRADE – LONGi solar & Shanghai Electric withdraw bids from Romanian auction, ending foreign subsidy regulation investigation.

ALARM BELLS - Recom announces French plant closure and relocation to Italy.

Solar Manufacturing Matters is a fortnightly newsletter on the European solar manufacturing landscape. Every other Friday, check out our latest EU policy analysis and a roundup of solar manufacturing market news.

From SolarPower Europe , the award-winning European trade association with over 300 members active at every point in the solar PV value chain.