Squeezing European Solar Energy Manufacturers To Restrict Innovation And Consolidating China's Leading Position

The difficult period for European solar energy manufacturers will continue as China's expanding overcapacity shows no signs of weakening, posing a risk of technological backwardness for domestic companies.

According to the lobbying group European Solar Manufacturing Council, over 3 gigawatts of solar manufacturing capacity are now facing the risk of closure, followed by hundreds of jobs. While solar energy installations are flourishing, low-cost solar panels imported from China are also thriving.

With the decline in solar module prices in 2023, some European component manufacturers have closed factories, exited the market, or gone bankrupt. French solar energy manufacturer Systovi SAS is one of the latest manufacturers, closely following large material producers such as Norwegian Crystal and REC Silicon.

Systovi attributed the dumping of panels in Europe to increased production capacity in China and the closure of Chinese products in the US market.

The company stated on March 14th that "in the absence of an appropriate regulatory framework, this situation has led to heavily subsidized Chinese panels being sold at a loss in the French and European markets, and has led to a sudden decrease in order volume.".
Gunter Erfur, CEO of Swiss solar module manufacturer Mayer Hamburg Technology AG, said that Chinese exporters are selling equipment to the European market at prices below cost, while some local competitors are also lowering prices.

Therefore, Meyer Burger has idle its 1.4-GW module manufacturing plant located in Freiberg, Germany, which recently reopened after the solar industry first fled the German market in the 2010s. It will be permanently closed by the end of April, and 400 workers will be unemployed.

Elford concluded in a conference call with investors on March 14th, "Our initial plan to significantly increase sales compared to 2022 has not been realized.".

The policy makers of the European Commission are unwilling to set trade barriers on Chinese goods, and the subsidy plans required by domestic solar manufacturers will not be introduced.

However, on April 3rd, the European Commission launched two investigations into Chinese solar manufacturers under its foreign subsidy regulations. These companies are suspected of benefiting from Romania's unfair advantage in winning contracts.

Analysts say that in the foreseeable future, the prices of solar panels in Europe will remain relatively low.

Jessica Jin, Senior Solar Analyst at S&P Global Commodity Insight, said, "overcapacity will continue for several years.".

Jin stated that last year the global module manufacturing capacity exceeded 1000 gigawatts, and the demand for new installations just exceeded 500 gigawatts. He added, "China has over 80% of the global production capacity and will also maintain high exports."