The fact that Europe imported an unprecedented 26 GW of PV modules in 2021, and has very ambitious goals of 600 GW PV deployment by 2030 – expressed in the recently adopted EU Solar Energy Strategy – clearly confirms the critical need for Europe to establish competitive PV manufacturing capacities domestically.
As it has been already expressed by the European Solar Manufacturing Council (ESMC) in its framework proposal for the Alliance it is critical to start the work of the Alliance towards establishing a concrete support program for PV manufacturing industry as soon as possible, preferably so that the implementation guidelines of the Alliance already are set in 2022. ESMC welcomes the actions already taken by the European Commission, including the envisaged plans to launch the Alliance by the end of the year, and expects that very concrete support instruments will be developed in the Alliance so that the PV manufacturing industry will be capable to start to use these instruments during the coming 6 months.
The implementation of the targets starts from the appropriate framing of it. ESMC is delighted to see that the European Commission proposed an extended target for PV manufacturing in Europe, from 20 GW to 30 GW annually by 2025, in line with the proposals of ESMC that were expressed already in June. ESMC is looking forward and advocating for such an ambitious target to be framed in the Alliance also for 2030, as a concrete target, such as 60 GW annual production, would attract additional investments, and would require clear and concrete mapping of the respective measures and actions for the future PV manufacturing capacities in Europe.
In the context of global competition including the US decisions to extensively support PV manufacturing in the US the European Union should deliver as fast as possible its own PV manufacturing support scheme that would be attractive for local PV manufacturing companies and potential investors.
ESMC advocates for the extensive support program for the European PV manufacturing industry dedicated to four major parts – scaling and commercialisation of PV innovations, lowering capital costs, securing off-take agreements among PV producers and final consumers, optimising the operational costs once the manufacturing capacities are established.
ESMC already in 2021 started to establish the IPCEI framework for PV manufacturing, dedicated to support European-wide innovative and breakthrough PV manufacturing projects. With the support of the Member States it is expected to start respective procedures on implementing this IPCEI at the beginning of 2023. Also a special strategic financial vehicle of at least € 5 billion in form of state credit guarantees should be implemented immediately in order to unlock the financial capital for the development, implementation and scale-up of the EU PV manufacturing industry while extensively reducing the capital and operational costs for the establishment of new PV manufacturing capacities in the EU. Off-take agreements could be an important step in attracting investments in new PV manufacturing capacities, as the commitments from local buyers would secure a major part of the expected PV production for local market in Europe. As it is stated in the Special Report on Solar PV Global Supply Chains of IEA today, coal generates over 60% of the electricity used for global solar PV manufacturing, significantly more than its share in global power generation (36%). This area deserves specific attention and respective policy measures for Europe. Special price regimes by lowering electricity costs from renewables, combined with off-take agreements, could be adopted for PV manufacturers in Europe, as this would generate a three-in-one solution: a) de-risking PV manufacturing investments in Europe; b) ensuring higher global PV manufacturing from renewables; c) mitigating the current high electricity prices in Europe.
ESMC is looking forward to extensively contribute to the success of the Alliance by elaborating these concrete proposals, as well as framing all the other potential support instruments for the PV manufacturing industry. The expected scale up of Europe’s PV manufacturing capacities will expand the competitiveness of the sector, and reduce Europe’s current dependency on PV components and products supply imported from China.
