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At SaurEnergy, even as solar manufacturing has been incentivised, pushed and supported by every means possible, we have regularly highlighted the need to consider the sustainability of it all. Well, the first rumblings have already started, not from the manufacturers who are establishing new capacities, but from already established players in Europe.
In an open letter, SolarPower Europe CEO Walburga Hemetsberger has warned of the impact of 'collapsing' solar costs on manufacturers in Europe. He claims that a steep 25% fall in the price of solar manufacturing and production is soon going to make it an unviable market for European solar manufacturers. “The combined impacts of faster than expected power price decline, interest rate increases, and tightening bottlenecks around grid connections and project permitting all contributed to the slowing down of demand and were underestimated by wholesalers and developers ordering high quantities of PV equipment,” added Hemetsberger.
Interestingly, the same issue has been flagged by the European Solar Manufacturing Council too.
The council has cited the bankruptcy filing of Norwegian ingot producer Norwegian Crystals on 21 August 2023 to support its claim.
The European market has been prized by Chinese manufacturers, who have sought higher margins and sales there. That has led to intense competition, with estimates placing inventory levels of close to 50 GW on the continent currently, enough to take care of needs upto 2025.
While the current focus is on solar modules, even solar inverters have borne the brunt of competition in the continent, with prices refusing to move desoite rising input costs.
The European plea comes even as manufacturing is set to scale up on the continent massively, aligned with similar scale ups in India and the US. All this, even as China based firms continue to ramp up capacity in China itself by a higher proportion, ensuring overall share of capacity for China remains as high as ever. SolarPower Europe even proposes measures such as emergency stock buyouts, an EU Solar Manufacturing Bank, ‘resilience auctions’ under the Net Zero Industry Act, and accelerating market uptake solar PV’s independent sustainability assurance scheme – the Solar Stewardship Initiative.