As Europe Changes Solar Manufacturing, Overcapacity Risks Loom

• While the project is aimed at boosting European PV manufacturing capacity, it may result in a worldwide overcapacity, provided the prepare for growth in nations like China, India, and the US.

The European Solar Manufacturing Council (ESMC) has invited the upcoming EU method for solar energy as the framework for building lasting competition and critical mass of PV manufacturing capacities in Europe.

This is important for lowering strategic reliances, making certain energy protection as well as improving the financial development of the EU, mentions the council.

As the European-wide organisation of PV makers, ESMC gives the adhering to 5 policy proposals as the critical elements required to be consisted of and also reflected in the EU approach for solar energy:

1. A GW-scale target for EU PV manufacturing must be defined. Such a calculated objective will aid to demonstrate the present PV manufacturing gap in Europe. Immediately, 75% of deployed or set up PV capacities ought to be generated within the EU, reaching at least 35 GW of European PV production capacities in 2025 and 100 GW in 2030 (15% of expected worldwide PV manufacturing capacities).
2. An unique calculated economic lorry of EUR 2-5 billion in the form of state credit history assurances need to be applied promptly in order to open the financial capital for the advancement, execution and also scale-up of the EU PV making sector. These measure ought to be targeted for the scale-up duration of automation based upon the globe leading European PV technologies as well as innovations.
3. An Important Project of Common European Interest (IPCEI) for PV manufacturing ought to be recognized as a parallel possible financial support action. An IPCEI for PV manufacturing would certainly resolve partially the economic capital issue in details projects throughout the upcoming years, as this action valuing the European Commission as well as Member States existing support instruments could be potentially executed in the second half of 2023.
4. The establishment of PV manufacturing capacities in the EU need to undergo streamlined administrative and also permitting conditions in the respective Member States. While the European Commission and Member States are resolving the permitting as well as preparing conditions for PV installations, the establishment of PV manufacturing facilities ought to be also lined up with the most favored planning as well as permitting status (e.g. free financial zones, tax exceptions, and so on) including the development of preferential treatment system.
5. The growth of policy actions such as Ecodesign requirements, Carbon Border Adjustment Mechanism, as well as extra balanced import taxes need to be priority actions in dealing with the issue of unfair global competition for the European PV manufacturing sector and to make sure the level-playing field for the European as well as global PV manufacturing market. Efficient PV manufacturing requirements, both environmental (including carbon footprint, concepts of circularity and also recyclability) as well as social/labour requirements ought to be attributed.

Along the fostering of the EU technique for solar energy, ESMC has suggested to prepare an action prepare for the re-establishment of PV manufacturing capacities in the EU, which would be subject to continuous high- degree political and also commercial surveillance for the forthcoming 3 years-- throughout the critical timeframe for the PV manufacturing industry in the EU.

While the project is aimed at boosting European PV manufacturing capacity, it may bring about a global overcapacity, given the existing capacities, and plans for expansion in nations like China, India, and the United States. According to Asia Europe Clean Energy (Solar) Advisory Co. Ltd, demand for solar PV in China might conveniently go beyond 100 GW in 2022, resulting in a large overcapacity circumstance in the manufacturing field. Presently, China accounts for 61% of the international solar module manufacturing capacity, which stands at 358 GW.

India's existing manufacturing capacity of ~ 18GW is less than the annual capacity enhancement of the leading individual Chinese PV brands. Jinko Solar for instance shipped close to 22 GW in 2021-22 itself. The federal government's Production-Linked Incentive (PLI) system for integrated PV manufacturing with preliminary investment of Rs4,500 crore, plus the additional appropriation of Rs19,500 crore in Budget 2022, is approximated to enhance the mixed potential to generate at least 40GW of solar modules.

In addition, the US Department of Energy's (DOE) Solar Energy Technologies Office (SETO) intends to raise new U.S. PV manufacturing capacity by 1 GW per year as well as installed solar hardware to have at the very least 40 percent domestic value.

What industrialized markets like Europe as well as the US can actually be doing is focus on in reverse combination of solar panels, something India is trying. It is not the Chinese dominance in Modules that hurts, it is the Chinese dominance in polysilicon (the beginning basic material ), going right approximately cells and also wafers that affects other markets. These procedures, which are a lot more resources as well as modern technology extensive than module manufacturing, are where non-China markets need to concentrate on probably.