European Solar Body Wants Life Support Now, from the EU

Solar Power Europe, the member-led association for the European solar PV sector, with claims to represents over 300 organisations across the entire solar sector in the continent has iterated its demand for direct support from the EU, instead of trade tariffs. Calling trade tariffs no solution, the board of Solar Power Europe said that ” As history has shown, investigating and implementing trade barriers on solar is the ultimate lose-lose strategy for Europe.”  So what they have proposed is implementation of a set of measures, which have been repeated again for consideration to combat the current glut in supply and price levels that are unsustainable for most European manufacturers.

“Right now, a perfect storm is hitting the solar PV market. A combination of market dynamics leading to overcapacity on the supply side, and overordering on the demand side during the last years, has, in turn, resulted in sharp drops in price of solar modules and other system components.

The situation only adds to the critical urgency for the EU to develop and implement a strong and credible industrial strategy for solar PV.

The balanced solutions are there, and are crystal clear:

• Adjust the EU State Aid framework (the Temporary Crisis and Transition Framework) to allow Member States to support running costs of factories – i.e. opex
• Allow for specific resilience auctions within Member States under a swiftly-adopted EU Net-Zero Industry Act
• Set up an EU-level financing instrument dedicated to European produced solar PV, like a Solar Manufacturing Bank

We urge EU leaders to spend this time focusing on these constructive solutions. We cannot risk slowing down the solar-led energy transition at this critical moment in time”. (Excerpt from the statement)

Resilience Auctions, Labour Protection

Thus, while specific resilience auctions would reward firms based on manufacturing market share with contracts that have non-price protections built in for instance, the body has also asked for roll out the Solar Stewardship Initiative, which targets ‘forced’ labour at solar manufacturing firms, presumably Chinese firms, that will push up import prices.

Solar Bank

A solar bank for exclusively European firms has also been on the agenda for a while. The idea here is to have a bank similar to the Hydrogen Bank under the Innovation Fund. Based on a system of two-sided competitive auctioning, the Bank will bring
together the cheapest European solar production projects with the highest willingness to pay from solar project developers backed up with a contract for difference from the state. Such Solar Manufacturing Bank can be set up in a matter of weeks and would give the much-needed short-term financial impetus in rebuilding solar supply chains in Europe

These, and many other proposed steps all fall short of proposing the kind of import duties that India has for instance. But the costs are equally, if not higher than those being born by power consumers in India, since the Solar Body also makes a strong push for funding support for OPEX expenses at solar manufacturing firms, to match support imports allegedly get.

 

All in all, the intention is quite clear. Until such time Esolar_power_europe_price_crisis_market_analysis_september_2023_0e62e63824uropean manufacturing capacities can ramp up to actually serve local demand, the body is happy to see imports fill the vast gap at the low prices ruling currently, but seeks enough life support for local firms till prices go up, or even better local manufacturing capacities ramp up. It is obvious that in time, even the aversion to trade barriers will go.