Europe can effectively compete with Asian solar manufacturers with innovative long-term photovoltaic technology solutions – pv magazine International

The global energy sector is concentrated in solar, wind, power transmission/distribution and hydropower. For example, investments in solar power plants alone are higher than investments in natural gas, coal and nuclear power plants combined. This is encouraging, but another fact is worrying: Chinese exports of solar modules to Europe in the first four months of 2022 were 2.5 times higher than in 2021. In April alone, almost 8 GW of solar modules worth more than 2 billion euros were imported. from China to Europe.

Europe’s struggle to move away from reliance on Russian oil and gas is threatened by reliance on renewable energy from China. Indeed, 80% of the global solar energy industry is located in China.

European solar energy projects would be at a standstill if solar cells or modules could not be purchased from China, warns the International Energy Agency. It predicts that up to 95% of the solar industry could be concentrated in China by 2025. But remember that imports from China could be affected by a new wave of coronavirus, logistical disruptions or political disputes, as experienced in Lithuania.

In the first four months of this year, China exported 49 GW of solar modules, of which half, 24.4 GW, were purchased by European countries, according to consulting firm InfoLink. Exports to Europe are up 144% compared to the same period last year. The Netherlands bought 12.1 GW of Chinese modules. Spain imported 3.3 GW, Poland and Germany 1.9 GW and 1.4 GW, respectively. InfoLink expects European demand for modules to reach 49-55 GW this year.

In September 2020, Europe launched the Solar Industrial Program to accelerate the implementation of solar PV component manufacturing projects. In 2021, the “European Solar Initiative” was created, aiming to create 20 GW of solar module production capacity by 2025.

Funding

We need to think in detail about how the EU solar strategy will be implemented – the financing of the planned measures through the EU Solar Photovoltaic Alliance and other possible instruments. It is not yet clear to what extent the European Commission (EC) will ask member states to reallocate funds for PV. We must understand that photovoltaic production in Europe will only recover if there is long-term competitive financing for production

The production of solar cells in Europe, and the supply of raw materials for this production, must play a key role. Over the past five to seven years, cell production in Europe has declined. It will now require far more investment to restore it than would have been necessary if funding had been provided to support production. Currently, the nine largest Chinese manufacturers account for more than 50% of the global solar cell market.

Studies show that to compete with the Chinese, it is necessary to build large-scale capacity with an annual capacity of at least 5 GW. Only then will the projects be economically viable. In China, the cost of photovoltaic production is 10% lower than India, 20% lower than the United States and 20% lower than Europe, due to differences in energy prices , labor and other inputs.

European producers are and will not be able to compete on price with Asian producers, who receive billions in subsidies and use coal to produce cheap silicon. And this is the main difference with Europe, which already uses clean renewable energy in its production

It is no coincidence that the EU has set itself the strategic objective of restoring a solar production industry in Europe at all costs, because this is a matter of strategic economic importance. We hope that this process will gain momentum in the near future. European producers must be ready for a qualitative leap.

China has played a major role in making solar power cheaper over the past decade and making it one of the cheapest and seemingly most affordable ways to generate electricity in the world. However, solar energy, which is becoming one of the cornerstones of the global energy mix, is becoming too important to concentrate the production of solar components in a single country, as is the case today.

The International Energy Agency has produced a report on the global solar chain with recommendations to promote the production of solar components in the world and to build solar photovoltaic component factories in regions where the demand for solar energy is particularly high. high.

Even though the cost of producing a solar power plant in the EU is about 20% higher than in China due to higher energy costs and higher wages, EU policy makers need to find ways to produce solar power plants in Europe. Even if it requires subsidies for the construction of new factories or market defense mechanisms against imports of poor quality products.

And manufacturers must think about sustainable and innovative long-term solutions, because it is the only way to compete with China, at least in Europe.

About the Author

Julius Sakalauskas is CEO and co-shareholder of SoliTek Cells & Modules, member of the board of directors, SIA “Global BOD Group. He started his career 15 years ago in a BOD Group company. He has an excellent knowledge of the entire internal production kitchen, processes, people, and participated in the establishment of the BODGROUP technology center, which was recognized as the “Greenest industrial building in Europe” (in 2013 by the German Chamber of Commerce). Julius Sakalauskas was one of the founder of SoliTek – BOD GROUP founded a solar technology company Soli tek Cells and built a solar panel factory in Lithuania, Vilnius in 2013. And in 8 years , SoliTek has become the leading manufacturer of solar panels in the Scandinavian region.

The views and opinions expressed in this article are those of the author and do not necessarily reflect those of photo magazine.

This content is copyrighted and may not be reused. If you wish to cooperate with us and wish to reuse some of our content, please contact: editors@pv-magazine.com.

Mary I. Bruner