Solar manufacturing industry issues ‘plea for survival’ in Europe

Meyer Burger has warned it may close one of Europe’s largest solar module plants “to eliminate unsustainable losses in the absence of resilience measures,” shifting its focus on the United States. It prompted the European Solar Manufacturing Council to publish “a plea for survival,” asking the European Commission for robust emergency measures.

Progress in the European Union’s legislation like the Net Zero Industry Act (NZIA), Ecodesign for Sustainable Products Regulation (ESPR) and forced labor regulation is welcome, but they are expected to be implemented too late, according to the photovoltaic panel industry. The European Solar Manufacturing Council (ESMC) said most companies are discussing “behind closed doors” how market conditions are unsustainable for their operations.

The so-called “plea for survival” was issued right after Switzerland-based Meyer Burger Technology warned it is ready to close its module production in Germany to cut losses in the absence of resilience measures. The facility in Freiberg is one of the largest factories of its kind in Europe. The company said it expects profitable growth in the US.

Competing against heavily subsidized foreign PV module manufacturing

Since August, ESMC members Norsun, REC Solar Norway and Norwegian Crystals decided to close several manufacturing units in Norway.

“Our members are competing against heavily subsidized foreign PV module manufacturing ― that currently offers modules on the European market at prices below profitability even for these subsidised actors ― creating an uneven playing field that ultimately leads to closures and bankruptcies of European companies. What we have witnessed in recent months is just the beginning of what we fear could become a wave of shutdowns in PV manufacturing operations, turning off the light of the European PV industry’s renaissance,” the association pointed out.

SolarPower Europe issued a similar warning in September.

Only half of solar module manufacturing capacity in the EU is estimated to be operational

PV module production capacity in the EU was 11 GW in 2023, but only on paper as only half is estimated to be operational, ESMC claimed. Moreover, output came in at just 2 GW and 1 GW is currently held in inventories, it added.

“Regrettably, these stocks remain unsold due to prevailing market conditions of ultra-low pricing, expected to persist throughout at least 2024. The closure of PV module manufacturers is also closing possibilities to develop other parts of the PV value chain and European material and component manufacturers are thus also at very high risk,” the organization stressed.

China’s aggressive industry support strategy

ESMC sees the said EU legislation coming into force in two to three years.

“By then, it will be too late, and we would irreversibly have lost a major share of the industry we still have left, and with that also important know-how and workforce competence… There is only one solution ― we need robust emergency measures that are powerful and effective, bridging the period until legislative incentives, such as the Net-Zero Industry Act, take effect and can at least partly level the playing field,” the statement reads.

If nothing is done now, there will be no industry to count on by 2030, in the view of its representatives. They pointed to “China’s aggressive industry support strategy” in particular.

Without immediate measures in EU, Freiberg facility set to close in April

Meyer Burger is focusing on strategic options such as partnerships with industrial players and technology licensing. The company added that it is considering raising equity, but primarily to complete its cell and module facilities in the United States.

With its Inflation Reduction Act, adopted in 2022, the administration of President Joe Biden seems to have outstripped the EU by far in support for a range of sectors including solar power equipment.

Meyer Burger will produce solar cells in Germany for its module plant in the US

With a deteriorating market environment in Europe, continuing with full-scale European solar manufacturing is not sustainable for the time being, the Swiss firm underscored. It revealed that the Freiberg facility could be shut already in early April.

“A final decision would have to be made by the second half of February 2024 in the absence of sufficient measures to create a level playing field in Europe such as a resilience-reward scheme. The solar cell production in Thalheim (Bitterfeld-Wolfen), Germany, would continue to support production ramp-up of US solar module manufacturing in Goodyear, US,” it said.

Until recently, the company was planning a massive expansion in Europe. It said it would probably build a 3.5 GW factory in Spain, backed by EU funds.