European solar industry may face wave of bankruptcies – SolarPower Europe

Record low prices of imported equipment for solar power plants are threatening to cripple the European solar industry, SolarPower Europe warned the European Commission.

SolarPower Europe proposed seven measures to protect the European solar industry from bankruptcy and prevent damage to the European Union’s open strategic autonomy goals.

According to a letter it sent to the commission, a “perfect storm” of market forces, not unusual in commodities, has driven prices down by more than 25%.

The combination of strong global demand signals and fierce competition between Chinese suppliers has led to significant rates of new investment in solar power supply chains. The resulting oversupply has led to quickly dropping prices for raw materials like silicon, down the supply chain to modules, inverters, and batteries, according to the report Saving European Solar Manufacturing.

Module prices have hit a record low of less than 0.15 EUR per W for low-cost products, now even submerging pre-COVID levels and making it extremely difficult for European manufacturing companies to sell their products, the letter reads.

It creates concrete risks for companies to go into insolvency as their significant stock will need to be devalued, SolarPower Europe claims. It highlighted the decision by Norwegian Crystals, one of the continent’s enduring monocrystalline silicon ingot producers, to file for bankruptcy.

According to SolarPower Europe, the situation is exacerbated by a slight, temporary slowdown of the European solar market in the third quarter, linked to inflation and tightening bottlenecks around grid connections and project permitting.

Hemetsberger: EU leaders should save Europe’s strategic tech supply lines or we are facing another wave of bankruptcies

Walburga Hemetsberger, CEO of SolarPower Europe, said cost decreases are typically welcome news, but she warned of serious repercussions for the EU’s plans for the so-called open strategic autonomy.

“In the short term, this is already posing real challenges to domestic competitiveness and the rebirth of EU solar manufacturing. We’re urgently calling on EU leaders to save Europe’s strategic tech supply lines,” she said.

Europe, in her words, has a rare second chance.

“Europe’s original solar manufacturing base was lost a decade ago. If we don’t respond rapidly and appropriately to this price crisis, we’re looking at another wave of bankruptcies, and a false start for EU’s open strategic autonomy agenda,” Hemetsberger stated.

Seven measures

SolarPower Europe called on the European Commission and member states to urgently take the following actions:

1. Swift emergency acquisition of European PV manufacturer’s module inventories.
2. Establishment of a Solar Manufacturing Bank at the EU level.
3. Address the inadequacies of the Temporary Transition and Crisis Framework (TCTF) for State Aid, particularly point 86.
4. Accelerate the adoption of the Net Zero Industry Act, including strong sustainability and resilience criteria in specific auctions.
5. Advance the intended impact of the EU Forced Labour Regulation by backing the Solar Stewardship Initiative (SSI).
6. Enable collaboration between Member States’ support programs.
7. Balance oversupply with a further boost demand for solar PV in Europe e.g. through the European Performance of Building Directive.