recently released a report assessing the factors that can help reduce the risk and scale of solar photovoltaic manufacturing in Europe.
The consortium assesses the factors affecting European industry and aims to meet the target of 30 GW of domestic manufacturing capacity by 2025 and the EU's decarbonisation target. The report released by the
Alliance entitled "European Photovoltaic Manufacturing Towards 30GW: Status Report for the Second Quarter of 2023" assesses the current situation of the European solar photovoltaic industry in terms of the long-term competitiveness of the EU industry. The report recommends action and consideration of the challenges facing the photovoltaic industry in the EU. & nbsp;
It also analyzes the fact that energy prices in Europe are very high compared to energy prices in the US and China. According to the report, the price of energy provided by China and the United States to producers in the photovoltaic value chain is 0.03 euros per kilowatt-hour or less. European energy prices are three to five times higher than those in the United States and China. Therefore, in order to regulate pricing, energy prices for such products must be at an internationally competitive level, the report said. & nbsp;
It attributes this growth to market differences. For example, it talks about the fact that the EU does not currently produce photovoltaic glass in solar panels because they are produced in China and installed in the EU. As a result, they cannot be safely recovered in float glass furnaces due to the presence of impurities and the lack of traceability of their composition. The main challenge preventing EU industry from meeting much of its domestic demand is a shortage of polysilicon, the report found.
The report identifies a number of factors that are reportedly affecting the EU industry:
1. The EU solar PV market has high demand but chronic capacity shortages. ESIA faces the challenge of recovering up to 30 GW of capacity across the entire value chain.
2. In the EU, solar photovoltaics are a fundamental part of the Green Deal and support mechanisms need to be found to narrow the gap with other regions. These support mechanisms will have to be limited in time and terminated once the main objectives have been achieved and industry competitiveness has been rebuilt.
3. The industry needs a sound support mechanism for industrial innovation and upgrading, rather than technological innovation. Most existing support mechanisms target research innovation and thus only partially serve current objectives. One of the sought-after features is simplicity and predictability. In this context, and in order to develop interim solutions, the ESIA Finance Working Group members agreed to study specific gaps.
The report further suggests solutions for companies to fill supply chain gaps by:
1. Developing a proposal
for incentives similar to the US IRA to be implemented in Europe 2. The solar bank proposal is inspired by the EU's recently launched hydrogen bank. It also takes some inspiration for local content variables from the Indian PLI. The proposal includes a double auction system where the most cost-competitive supplier can be matched with the off-taker with the highest willingness to pay. In doing so, the funding gap will be minimized. Members are currently working, researching and developing novel proposals that can be used to initiate market investments.
3. Current gap: There are many factors that affect the lack of competitiveness, but to summarize (each step is affected in different ways), the main ones are:
• Lack of financial instruments to support capital expenditure and operational expenditure;
• Capital expenditure may be significantly higher than that of Chinese counterparts.
• Global uncompetitive high energy prices (3 different scenarios have been studied)
• High staff costs/lack of economies of scale – EU industry cannot meet most of the demand because there is also a lack of necessary labour. Moving 30 GW of solar PV manufacturing back to the EU will require up to 50,000 new skilled workers, especially in cells, modules, ingots and wafers.
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