Analysis on the Future Trend of Photovoltaic Import in Europe

this year, there has been a doubt that Europe has imported 72GW + imported modules and installed 42GW photovoltaic in 2022. On the surface, it may be 30GW inventory, but in fact, it is not reasonable, especially in the first quarter of 2023, almost 30GW photovoltaic modules were imported. The explanation of

domestic securities firms is that some household photovoltaics are not counted, and this explanation is not convincing.

The EU PV official has two goals by 2030:

1. PV will become the largest single source of energy, and renewable energy will be able to completely replace Russia's fossil energy in 2028. At present, it is expected to add 420 GW of PV in 23 to 30 years;

2. Among them, 40% of photovoltaic products are produced in the European Union. This issue is raised because of the concerns about the broken chain caused by the epidemic and the conflict between Russia and Ukraine.

Because silicon materials and crystal pulling are energy-intensive modes, the EU's plan is to start with subsidized components and then make batteries. The good thing is that there are still some photovoltaic industries in Europe, and Wacker can produce silicon materials. Although we see that this plan still looks slow, it may be the only feasible way to realize the photovoltaic manufacturing industry.

In the process, the European Union admitted that more than 75% of photovoltaic modules now come from China, and the real data must be higher than that.

In 2012, the EU and China have fought a photovoltaic tariff trade war, it should be said that the two sides finally reconciled, the conclusion can be that China and the EU will not have a trade war in this regard in the future.

It's just, is it really feasible? This is more like a choice between achieving PV installations or achieving 40% of production capacity, but not both. At least, in the short term. Why? Of course,

China can provide 420 GW of photovoltaic modules to Europe in the next seven years, so the question is whether the EU can produce 40% of such huge photovoltaic products by itself, and at a more appropriate cost. The answer is no. From the point of view of production

alone, Europe does not have the advantage of production cost and technology. The cost of energy and manpower in the EU is significantly higher than that in China, so it is not economical to produce photovoltaic in the EU. From a

technical point of view, with the N-type transformation of the industrial chain, Chinese and foreign manufacturers have understood that it is impossible to produce high-efficiency photovoltaic cells at low cost in the photovoltaic production of the whole industrial chain, and that there may be some localized industrial chains for components, which may be a hedge against potential tariff issues and issues related to local maintenance. In addition, China has also begun to pay attention to the spillover of technology and strictly manage the export restrictions of technology.

In this context, the proposal of European manufacturers is to encourage Chinese enterprises to invest in EU factories, which proves that EU subsidies are not enough to support domestic factories. Ironically, German Wacker has deeply felt the expansion and cost advantages of Chinese silicon enterprises, and is gradually withdrawing from the market of photovoltaic silicon materials.

Then there is the establishment of carbon border tax, which actually has an impact on some photovoltaic products produced in China, because a large part of photovoltaic products are produced by coal, which will increase the final cost. On the other hand, China is also transferring photovoltaic electricity, and there is also a lot of hydropower production capacity.

As a result, European countries began to import Chinese photovoltaic products in excess, which is the right measure. One way to deal with the broken chain crisis is to raise the level of safety stock, similar to the strategic reserve of oil, photovoltaic modules are easier to reserve than traditional petrochemical resources. After all, the current LCOE of optical storage in Europe is already very low, considering the development of technology and cycle in the last two years, LCOE can be further reduced.

Indeed, European countries have chosen the latter in subsidizing capital expenditure + installation subsidies, or directly importing Chinese photovoltaic products with higher cost performance.

This low-key approach essentially achieves two European goals, but also proves that there is no economic value in building photovoltaic capacity overseas at present.

China has a similar huge advantage in electric vehicles. According to the news on May 12,

2023, FuturaSun, an Italian photovoltaic manufacturer, plans to invest 150 million euros to build 10g W TOPCon cell production capacity in Huai'an.