Industry Group Proposes Ramping Up Module Manufacturing in Europe to 35 GW by 2025

The European Solar Manufacturing Council (ESMC) has released policy proposals for building extensive solar module manufacturing capacities with long-term competitiveness in Europe.

The ESMC noted that the current challenges and market failures slowing down European photovoltaic manufacturing must be prioritized. If left unaddressed, the EU is at risk of being dependent on Russian oil and gas, increasing long-term dependence on raw materials and photovoltaic hardware imports from China or other emerging global photovoltaic suppliers.

The ESMC provided five policy proposals that would serve as critical elements necessary to be included and reflected in the EU strategy for solar energy.

The ESMC proposed a GW scale solar photovoltaic module manufacturing in Europe. It recommends that the EU produce 75% of the deployed or installed capacities within the region. This will help the European photovoltaic production capacity reach 35 GW by 2025 and 100 GW by 2030, contributing 15% of the expected global photovoltaic manufacturing capacity.

The EU member states are suggested to implement a special strategic financial vehicle of €2 to €5 billion (~$2.22 billion to $5.55 billion) in state credit guarantees. The funds could help unlock the financial capital for developing, implementing, and scaling up the solar photovoltaic module manufacturing capacity in the region. Due to the increased market competitiveness, the sector is looking for temporary financing instruments to de-risk investments and reduce the cost of capital.

An Important Project of Common European Interest (IPCEI) for solar photovoltaic module manufacturing is proposed as a parallel potential financial support measure. An IPCEI for photovoltaic manufacturing would partly solve the financial capital issue in specific projects. ESMC has formed a consortium of more than 50 European photovoltaic manufacturing companies and research institutes from 14 countries for the PV-IPCEI framework. It is preparing to launch the PV-IPCEI initiative officially.

The ESMC proposed that the establishment of photovoltaic manufacturing capacities in the EU should be subject to simplified administrative and permitting conditions in the respective member states. The establishment of PV manufacturing facilities should be aligned with the most preferred planning and permitting status like free economic zones, tax exemptions, etc., including creating a preferential treatment system.

The development of policy measures such as eco-design criteria, carbon border adjustment mechanism, and more balanced import taxes should be priority actions in addressing the issue of unfair global competition for the European photovoltaic manufacturing industry. Effective photovoltaic manufacturing standards such as environmental (including carbon footprint, principles of circularity, and recyclability) and social/labor standards should be credited.

Apart from these policies, the ESMC proposes preparing an action plan to re-establish photovoltaic manufacturing capacities in the EU, which would be subject to constant high-level political and industrial monitoring for the next three years.

The European Commission had recently proposed the REPowerEU roadmap to make Europe independent from Russian fossil fuels well before 2030, starting with gas, by expediting renewable energy expansion in the wake of Russia’s invasion of Ukraine.

The global supply chain issues resulting from the pandemic and the geopolitical challenges have led to many countries rethinking priorities and new initiatives for manufacturing, including India.