Grumblings From European Solar Manufacturers Start Over Falling Prices

Highlights :

  • The European protests are predictable, as Chinese firms have taken prices to levels 25% below those that existed even 6 months back.
  • Speculation is that the European Union will seek ‘creative’ ways to limit imports, beyond just tariffs that might be disputed.  These could include ‘green’ supply chains, ‘responsible’ mining or even association with parent firms that are in the wrong business like fossil fuels etc.
Grumblings From European Solar Manufacturers Start Over Falling Prices

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.

The combination of these moves looms set to severely push the limits of how far countries will go to protect their domestic manufacturing, unless prices move up. The latter seems a remote possibility now, with tariff wars looking a far more likely option by 2025.
In India, price volatility of the past 3 years drove many developers to seek their own manufacturing footprint, placing them in a piquant situation now that prices have fallen below even levels they sought for their projects. Almost all the top 5 developers today, from Adani to Avaada to ReNew have investments riding in the solar manufacturing space as well. Keep watching this space to know the answers.

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Prasanna Singh

Prasanna has been a media professional for over 20 years. He is the Group Editor of Saur Energy International