Solarpower Europe is demanding a bailout for solar panel manufacturers for the effect of a 25% drop in prices due to overproduction in China. The employers’ association sent a letter to the president of the European Commission, Úrsula von der Leyen, to the president of the European Parliament, Roberta Metsola, and to the representative of the Spanish Presidency, the vice president of Ecological Transition, Teresa Ribera, in which they described the situation as “extremely dangerous for solar manufacturers” and warned of the risk of insolvencies due to the rapid depreciation of their stocks and demanded an urgent rescue of at least 100 million.
The warning from the association of European employers comes at the moment of the approval of the new directive on renewable energy and at the gates of the annual speech of the state of the European Union to be given by Ursula von der Leyen .
For the association of photovoltaic producers, the perfect storm has occurred with the fall in energy prices, the increase in interest rates, bottlenecks in connections and the slowness of permits that cause demand to suffer. .
On the other hand, Chinese manufacturers are accelerating the installation of new solar panel production plants and can almost triple their capacity from last year to this year, which represents an unattainable challenge. for European companies. Proof of this is that Norwegian Crystals filed for bankruptcy protection on August 21 and Norsun suspended production.
To solve the situation, the association has put on the table a battery of seven steps to address this situation:
1. Proposes rapid emergency procurement of module inventories of European PV manufacturers through a special purpose vehicle at the EU level, and/or through the development of the Ukraine Green Reconstruction Fund. These emergency measures are important in the immediate term, as the only effective way to address the problem of future inventory reduction and ensure the survival of many European manufacturing companies.
2. Create a solar manufacturing bank at the EU level, similar to the hydrogen bank under the innovation program.
Based on a bilateral competitive auction system, the Bank will gather the cheapest bids for European solar production projects with the highest willingness to pay from solar project promoters.
supported by a contract for difference from the state. Such a Solar Manufacturing Bank could be established in a matter of weeks and provide a short-term financial boost to the reconstruction of European supply chains.
3. Address the shortcomings of the Temporary Crisis and Transition Framework (TCTF) for States. The aid, in particular point 86, presented as a clause to allow the aid to be equivalent to the European competitors in the world, but not enough to allow the aid for operating costs to compensate for the deficiencies on the energy cost structure.
4. Accelerate the adoption of the Net Zero Industry Act, including strong sustainability and sustainability criteria other than the price of certain auctions. Member States should be allowed to create “Resilience Auctions”, which reward solar PV systems with the highest production share in the EU. This guarantees a stable market for European manufacturers in the coming years, which is important for the expansion phase of the industry.
5. Promote the effects of the EU Forced Labor Regulation by supporting the Solar Stewardship Initiative (SSI). SSI, as a value chain assurance program, with third-party audits, ensures that companies can independently demonstrate their commitment to maintaining the best practices in their production. .
6. Enable collaboration between Member State programs to support the development of PV manufacturing and ensure that important PV manufacturing clusters emerge.
7. Increase demand for photovoltaic solar energy in Europe. This can be done in the short term, for example by getting a rooftop solar mandate as part of the current European Building Performance Directive, or by pushing through the December 2022 EU emergency regulation to accelerate renewables. . EU leaders should also discuss the inflationary effects that are currently delaying solar projects, for example by working with the European Central Bank (ECB). Ultimately, the only structural way to address excess supply capacity is to increase demand.
