The great EU local PV manufacturing debate: competitiveness, scale, capital

European solar PV manufacturers who are struggling to cope with soaring electricity prices are concerned that the continent is lagging behind the US and India in terms of policy support for the sector.

In a webinar organised by trade body SolarPower Europe, policymakers and industry experts discussed the current state of the PV supply chain and how policy developments could affect European solar manufacturing.

Support for PV manufacturing is included in the US Inflation Reduction Act (IRA) and India aims to add 65GW of PV module capacity through an expanded incentive scheme. The key conclusion from the discussions was that European companies need more support to scale up quickly and compete more vigorously.

"In India and the US, we are seeing that those precise, tangible plans are somehow outpacing the efforts put in by the EU, and I'm a little concerned," said Christian Westermeier, vice president of marketing, sales and applications engineering at WACKER POLYSILICON, "I'm really worried that the EU might miss the ride. "

Westermeier said that WACKER POLYSILICON has around 80,000 metric tons of polysilicon production capacity, which, if all of it were used in the photovoltaic industry, would equate to around 26GW of photovoltaic modules.

Although 75 percent of the company's polysilicon capacity is in Germany and 25 percent in the US, most of the material is shipped to Asia. westermeier said, "At the moment, there is no market in Europe for us as a polysilicon manufacturer. The same is true for the US."

European heterojunction cell and module manufacturer Meyer Burger is expanding its footprint in the US to take advantage of the IRA, with the company aiming to have 1.5GW of module capacity in Germany and the US by the end of 2024.

Speaking at the seminar, Meyer Burger's Chief Commercial Officer Moritz Borgmann said, "Investing in the US makes a lot of sense. Relatively speaking, investing in Europe is simply not attractive at the moment".

He added that the support offered by the IRA "is so specific, simple, transparent and on such a large scale that in the current environment it is difficult for us to continue to invest on the required scale unless the EU really changes."

Jacek Truszczynski, deputy head of the European Commission's DG GROW department, pointed out that there is a risk that the US could gain access to solar investment at the expense of European participants.

Asked if the IRA adds leverage to get the European Commission to do something outside the existing scheme, Truszczynski said, "What is certain is that it is a big challenge for us and it will pull investors to the US. If it pulls investors to the US, it will pull investors away from Europe."

Another downside for European solar manufacturers is high electricity prices, with consultancy Rystad Energy warning last week that 35GW of planned PV manufacturing projects on the continent are at risk of being halted.

Ignacio Asenjo, policy officer at the European Commission's Directorate-General for Energy, said high electricity prices were a short-term problem, "Maybe we are in a bad situation now, which is related to the current war and dependence on fossil fuels, but in the medium term we know that prices will fall."

However, Westermeier of WACKER POLYSILICON warns that even if electricity prices do fall in the next two years to the level of prices prior to the current energy crisis, "it will be too late for many companies in the industry".

He says that some European silicon metal producers have already stopped production because electricity prices are too high for them, and "as long as this situation continues, it will be very difficult for them to restart again".