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Ten years ago, Europe’s solar power renaissance was unthinkable. Solar power deployment in 2014 remained at a low level, decreasing by more than 70% in two years. In Europe, solar PV installations did not return to 2012 levels until 2019, with 17GW of PV installed on the continent. But then, they made a comeback! Today, solar power seems to be going strong. In 2020, the amount of new solar power generation in the EU was 20GW, which will double to 40GW in 2022. Last year, Europe installed 56GW of solar power.
Walburga Hemetsberger is CEO of SolarPower Europe, the association representing the entire European solar power value chain.
In the face of the energy crisis, the EU has called solar power a “centerpiece” of Europe’s efforts to wean itself off Russian gas, and the sector has made gains. Ember reports that solar power generation will begin in summer 2022. It has been saved Europe’s gas imports amount to 29 billion euros. So the coronation continued. Looking at global developments, the Director-General of the International Energy Agency has hailed solar power as the “queen” of the energy transition.
In the immediate aftermath of success, it can be tempting to rest on your laurels. Therein lies the danger. Energy transition is a marathon, not a sprint, and the finish line is still far away.
Europe has two 2030 solar power targets. It will produce 30 GW of photovoltaic materials across the value chain, with a total of 750 GWdc of solar PV installations in Europe. At the time of implementation, Europe is still one-third of the way with just over 260 GWdc of solar generation. Manufacturing is a more complex situation with different levels of production occurring throughout the supply chain. The capacity of some components must be increased by a factor of 30. There is no guarantee that Solar will cross the finish line.
Developers face the challenge of grid connectivity taking more than four years. EU licensing laws have struggled to penetrate at the local level and continue to be delayed. Solar will need to hire about 400,000 people within the next few years. These challenges include the looming fear of inflation and high interest rates. Installations have been increasing by at least 40% per year for years, and by 2024 the increase is likely to be only around 11%. This year’s solar power production will still fall short of the annual average of 70 GWdc needed to reach the 2030 goal.
At the other end of the value chain, 90% of the world’s solar power supply is handled by a single source: China. As healthy supply chains become global and diversified, economies around the world are making substantial efforts to reshor domestic production of solar power. While President Biden’s anti-inflation law has rang out across the Atlantic, India, Canada, South Africa and Turkey are making moves of their own. European policymakers also recognize the need for action, but the window of opportunity to develop substantial support for manufacturing is closing.
Currently, European manufacturers are expected to scale up, but are either stuck on the starting blocks or forced off the racetrack en masse.
In 2023, the prices of solar power components such as modules and inverters fell to new lows following the learning curve of solar power. Developers also placed excessive orders in an attempt to avoid recent supply chain bottlenecks. Prices fell because supply was higher than expected and demand was lower than expected.
Evolving prices are making it difficult for European solar manufacturers to sell their products. An increasing number of long-established solar power generation manufacturers in Europe are announcing the suspension of production. Hundreds of people were laid off. At least eight bankruptcies, announced production suspensions, or debt restructurings have occurred since August 2023.
A dire situation calls for urgent action. The current political vacuum has polarized the debate. Some people have their backs to the wall and call for protectionism. History has taught Europe that trade measures do not help anyone. The minimum import prices from 2013 to 2018 did not bring back solar power plants and coincided with a period of flattening of installations.Even the European Commission recognized this month Trade measures had little impact on solar power generation in Europe.
Therefore, solar power requires thoughtful solutions tailored to the characteristics of the solar power sector. do not have unintended consequences. SolarPower Europe, representing the entire European solar power sector, has concrete proposals to advance both the EU’s solar PV adoption and solar PV manufacturing goals in parallel and mutually reinforce each other.
First, EU solar manufacturers need emergency plans now to ensure they can continue operating in the coming months. Public authorities will be able to buy stock from EU manufacturers for use in public buildings that comply with the soon-to-be-applied rooftop standards. Next, structural measures must be taken.
Solar PV requires a dedicated financing tool at EU level: the EU Solar PV Production Bank. EU solar power developers can sign offtake agreements with EU solar manufacturers and receive support to cover initial premium costs.
EU countries should set up “resilience auctions” to gain visibility into European solar PV product shipments, starting with a small share of auction trading volume in 2025 and expanding towards 40% in 2030. There is.
The European Investment Bank should step up its support for the pipeline of ready-to-use solar manufacturing projects, as it has done with the 3SUN factory in Sicily. last month.
All of this comes with robust market access rules, such as laws on ecodesign and supply chain sustainability, ensuring that only products that uphold European ESG values can enter the single market .
About two years ago, the EU’s solar power strategy was launched in a different world, before the Anti-Inflation Act, before the price crisis. Meanwhile, solar power has been delivered to Europe, installing record capacity and protecting millions of European citizens and businesses from rising prices. Recognizing the special situation of solar power and acting accordingly is well in line with Europe’s approach to chips, hydrogen and wind, with multi-billion euro plans for each of these technologies. .
This is an opportunity for the European solar power sector to show solidarity during this difficult time and for European decision-makers to step up and realize the intended goals of the technology, which represents a key solution to decarbonisation. This is a crucial moment. The time has come for a solar-specific action plan by policymakers: an EU Solar Charter.
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