There has been speculation for some time that the European Commission will come up with a subsidy for solar energy systems and components that are made in Europe and have a lower CO2 footprint than Chinese competition. This subsidy is essential for European manufacturers to survive as they have been faced with Chinese solar panels and parts sold at rock-bottom prices for several months.
"For the cheapest European solar panels, you pay about 2.5 times the price of a comparable Chinese module," says Scheper. " For solid glass-glass panels, you might be paying more than 3 times the amount of a comparable panel produced in China. At these Chinese prices, European manufacturers cannot produce. They won't be able to keep up this situation for much longer: it could be finished for them within six months."
European manufacturers such as Meyer Burger, Norsun, Norwegian Crystals and REC Solar have already announced that the European market is no longer favorable enough for them to operate in. After the German government announced that it would not provide state aid, flagship Meyer Burger has closed its German solar panel factory and is now expanding its US production capacity. The European solar cell factory is still running though.
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"The European demand for solar panels from consumers and SMEs is now about 75 gigawatts, of which it has been agreed that 40 percent should be produced in Europe by 2030. The European Commission's idea is to make the subsidy available to consumers and SMEs so that the price is aligned with Chinese solar panels. With equal prices, there is a very real chance that the demand for European solar panels will pick up quickly because many people prefer to buy European solar panels" says Scheper.
Go bankrupt or accept Chinese capital?
Urgency is needed, because if this is not solved quickly enough, European manufacturers will be faced with a difficult dilemma: go bankrupt or accept Chinese capital? "Not everyone will like that, but manufacturers are already being approached by Chinese parties. They are willing to provide the bridging capital for this difficult period," says Scheper.
This would mean that, although European production capacity would be preserved, it would not offer the real autonomy that the European Commission had hoped for. "The question is how you look at this: Countries like the Netherlands have the capacity and knowledge to make and test high-quality solar cells. China cannot, whereas we cannot scale up."
Possible financial dependency from China
According to Scheper, this is not the only way in which Chinese parties are currently bringing capital to the market. "There are Chinese traders walking around who take over batches from wholesalers in order to resell them later. Wholesalers are happy to get rid of their wrong or overpriced items and manufacturers are happy that they can win new orders as a result."
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And then he sees a third way in which Europe is becoming dependent on Chinese capital. "Unlike many European banks, Chinese investment parties are willing to lend capital to project developers – and all the services around it, including when it comes to energy storage projects. At the moment, there is a huge Chinese drive to supply capital to Europe and there are already parties that are taking advantage of this."
If the European Commission is interested in a strong European solar energy sector, it is therefore very important that there will not only be subsidies for European PV products, but also additional measures. Otherwise, European production capacity will have been preserved, but dependence on Chinese capital and services will have increased to such an extent that European autonomy will still have diminished. (GS/hcn)
