15 cents per watt.

Solar sector calls for €100M EU bailout as China pushes it to the brink

Wide-scale bankruptcies in the EU’s solar sector now seem increasingly likely, industry lobby warns.

BY VICTOR JACK

The EU should step in and spend €100 million on solar panels made by European companies faced with an imminent wave of bankruptcies thanks to intensifying Chinese competition and slowing demand in Europe.

The industry’s main lobby in Brussels, SolarPower Europe, on Monday sent a letter to the European Commission asking for urgent help. 

“It’s pretty severe,” Walburga Hemetsberger, the CEO of the industry group, told POLITICO.

She said that the price of solar modules has fallen by a quarter this year, meaning the cost of production in Europe is now around double the world price of 15 cents per watt.

That's left EU manufacturers unable to sell their stocks, she said. “European manufacturers find it very difficult at the moment, their stocks are piling up.”

Last month, the Norway-based producer of solar ingots, bricks and wafers Norwegian Crystals filed for bankruptcy saying it lacked enough cash to carry out its expansion plans.

SolarPower Europe is now urging an “emergency acquisition” of EU manufacturers’ inventories, either through a recently announced fund directed at Ukraine’s reconstruction or a dedicated special purpose acquisition vehicle set up by Brussels. The industry needs “80 to 100 million” euros in the “next couple of weeks,” Hemetsberger said.

The lobby also wants the Commission to set up a "Solar Manufacturing Bank" with €6 billion in EU funds in the next month if it wants to keep the sector going and meet its 2030 domestic manufacturing targets, Hemetsberger said. Such a program — mirroring an EU scheme to boost the production of renewable-based hydrogen — would guarantee a fixed rate of return for solar producers.

It also wants the EU to boost demand with strict rules on rolling out rooftop solar panels as part of the ongoing Energy Performance of Buildings Directive.

“Really unprecedented times need an unprecedented response,” Hemetsberger said.

The Commission said it was "aware of the difficulties faced by EU manufacturers" and "is in regular contact with the renewable energy manufacturing industry ... to better understand the market situation and discuss possible options to address the current situation."

Jenny Chase, a senior analyst at BloombergNEF, attributed plummeting prices to Chinese mass production combined with slowing demand in Europe caused by rising interest rates and permit-related bottlenecks.

“A whole lot of [European] solar manufacturers are going to go bust … in the next couple of years,” she said, adding: “EU manufacturers have higher costs so it’s very, very likely that some of them will suffer.”

The crisis in the industry comes as the EU plans to boost domestic production of solar panels to wrest some market share from the Chinese producers who dominate the sector.

The Commission wants the bloc to boost its solar manufacturing capacity to 30 gigawatts by 2030 as part of its Net Zero Industry Act proposal, which is currently under negotiation among EU capitals and the Parliament. The law forms part of Brussels’ wider response to Washington's $369 billion Inflation Reduction Act and China’s mammoth state-backed green investments.

It’s now “very likely” the EU will miss those production targets thanks to large-scale bankruptcies unless Brussels acts fast, Hemetsberger said.