As of: February 1, 2024, 8:09 a.m
By: Christiane Kühl
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Production by the solar system manufacturer Meyer Burger in Freiberg: The plant is on the verge of closure if politics doesn't help.
© Sylvio Dittrich/Imago
The European Solar Association ESMC has called on the EU Commission to take immediate action.
Without political help, a large number of companies are at risk of going out of business due to the flood of imports from China.
European manufacturers of solar modules have called on the EU to take immediate action to ensure that local companies do not have to close under price pressure from Chinese imports.
“In the next four to eight weeks, the most important EU manufacturers of PV modules and their European suppliers will shut down their production lines unless substantial emergency measures are taken immediately,” says the letter from the industry association European Solar Manufacturing Council (ESMC). EU Commission President Ursula von der Leyen.
Without quick help, the EU runs the risk of losing more than half of its production capacity for photovoltaic modules in a very short space of time.
The letter is available to the Reuters news agency.
Solar manufacturers have been warning about an end to their industry in Europe for weeks.
Since the summer of 2023, the photovoltaic industry has been under severe pressure due to a fall in prices, triggered primarily by a flood of cheap solar modules from China.
Companies are increasingly in financial distress and have been demanding support from politicians for a long time.
In Germany, industry leader Meyer Burger and the company Solarwatt have declared that they will soon have to close locations if nothing happens.
China holds 90 percent of the world market share for solar systems;
for some components such as wafers the proportion is much higher.
Photovoltaic companies are threatened with closure in just a few weeks
Meyer Burger, the largest solar system manufacturer in Germany, recently announced that it would close its solar system factory in Freiberg, Saxony, in April if there was no political support.
He had to decide on the closure by mid-February in order to at least save the entire company in case of doubt, company boss Gunter Erfurt recently told journalists.
A few days later, the Dresden module producer Solarwatt also warned that its production would end in a few months.
“If nothing happens, we have to think about how our production will continue,” said Solarwatt boss Detlef Neuhaus to the
Handelsblatt
.
Meyer Burger had decided weeks ago to cancel a planned expansion in Germany due to a lack of funding.
Instead, the company is now expanding its production in the USA.
As part of the Inflation Reduction Act, generous subsidies flow into the development of climate-friendly industries.
Erfurt does not expect an end to support even if former President Donald Trump wins the election.
According to Erfurt, a market for these technologies has long since developed, especially in states governed by climactic Republicans.
And China has also been supporting the industry for many years.
Only Europe has difficulty providing targeted support to individual sectors.
According to the manufacturers, this now urgently needs to change.
Klamme solar industry: What funding options are there?
What to do?
Among other things, the ESMC is now calling for a program for the government to buy up surplus solar module inventories in Europe, which have accumulated since the summer and are depressing prices.
The ESMC estimated in the fall that, at 40 GW, around half of the stock was solar modules from China.
For comparison: EU countries installed a total of 41.4 GW of new solar capacity in 2022.
In addition, Brussels should change the rules for state aid, writes the ESMC - so that member states can provide more support to their own solar manufacturers.
If these measures cannot be implemented quickly, the EU should also consider “protective measures” to counteract a flood of imports, the letter says.
This could also include tariffs and quotas.
According to media reports, the EU Commission is also considering punitive tariffs.
Most solar manufacturers reject punitive tariffs on Chinese imports
However, large parts of the sector reject punitive tariffs on Chinese imports - including Meyer Burger.
“We agree with the downstream industry on this,” said Erfurt.
Solar system installers rely on imports from China.
And in general, the energy transition could not be achieved without systems and parts from China as of now.
And the low prices are advantageous for end users anyway and stimulate demand.
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In December, 429 solar companies from all over Europe spoke out against trade protection measures and extra tariffs in a joint statement to EU Internal Market Commissioner Thierry Breton.
“We have better, faster and more effective solutions to the crisis,” said Walburga Hemetsberger, managing director of the industry association SolarPower Europe, which coordinated the call, at the time.
“Europe must not betray its climate and energy security goals.” Instead, the call called for so-called resilience programs that take into account the higher production costs and thus also higher prices of European manufacturing.
Solar manufacturers demand funding with resilience programs
Such programs, among other things, prescribe local content in tenders and finance the necessary additional charge from the state treasury.
Specifically, the Federal Association of the Solar Industry has developed such a resilience program, which, according to Gunter Erfurt, was designed to be EU-compatible right from the start, right down to the specific funding rates.
The association is now demanding that Berlin implement this program.
The Bundestag Committee for Climate Protection and Energy, which has already heard from experts, is currently working on the required program, said Erfurt.
The financial outlay for the resilience program will amount to just 50 million euros for 2024 - compared to 60 billion euros for fossil fuel subsidies in Germany.
So money is not the problem.
In its planned NetZero Industry Act, the EU Commission has set itself the goal of producing at least 40 percent of all photovoltaic systems in Europe by 2030.
Gigafactories are to be built in France, Italy and Germany.
It should be clear by now at the latest: This goal is unattainable without massive funding programs.