A report from the Clean Energy Technology Observatory shows that while the EU is a technology leader in PV inverters, trackers and mounting structures, its production capacity of solar blocks, wafers, cells and modules falls far short of the targets of the Net Zero Industry Act.
Urgent and coordinated policy action is needed to strengthen the EU’s solar energy supply chain, according to a report from the Clean Energy Technology Observatory (CETO).
The report says the EU’s industrial base is struggling to compete with cheap Chinese imports, causing bankruptcies and endangering technological sovereignty.
Analysis in the report says the EU has a production capacity of 25 GW of PV-grade polysilicon, 12 GW of PV modules, 2 GW of PV cells or equivalent and 0 GW of PV-grade silicon rods and PV wafers.
To achieve an objective set by the EU Net Zero Industry Act (NZIA) if the bloc were to make 40% of the union’s annual solar deployment with domestically manufactured components by 2030, the bloc would need a production capacity of 76 GW in each of these areas, the report said.
The only areas where the EU currently exceeds this benchmark are the production of PV inverters and PV trackers with their mounting structures, with capacities of 142 GW and 121 GW respectively.
The report says that the EU’s position in inverter and tracker production shows a positive trend thanks to its advanced technology, innovation and strong industrial capacity in these segments. far behind a comparable level in the production of solar energy blocks, wafers, cells and modules.
The NZIA also sets a target for the EU to have a share of global PV component production of more than 15% by 2040. The report says the EU can only achieve this target in the case of PV inverters, PV trackers and mounting structures, with shares of 23% and 34% respectively, before adding that the union is significantly behind for all other components.
The report says that production of PV systems in the EU could be competitive, but emphasizes that this must be done through large GW-scale factories that are highly automated and fully integrated at all stages of the value chain.
It also warns that the EU’s current outlook for limited support schemes for the manufacturing sector is not keeping pace with global market growth and, outside China, risks losing momentum to more direct and targeted support schemes implemented in the US and India.
In the report’s conclusion, CETO, an internal project of the European Commission, writes that establishing a resilient supply chain linked to the EU’s PV manufacturing base is of “primary importance” and says that political interest and promotion for production expansion “will play an important role.”
“Stable and reliable political and regulatory conditions are important factors to attract investors,” the report said. “It is imperative that EU Member States finally respond quickly and commit to effectively supporting PV production in the EU by implementing strong policy measures.”
In October, a report from SolarPower Europe and Fraunhofer ISE showed that targeted policies at EU level could closing a price gap between Chinese and European solar panels and help reach the EU’s annual production target of 30 GW by 2030.
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