European photovoltaic manufacturing: scaling up and innovating!


The white paper "PV Manufacturing in Europe: Ensuring Resilience through Industrial Policy" is an update to the previous white paper written in May 2023 and explores some of the challenges faced by policymakers in the area of resilience in solar manufacturing within Europe.
ETIP PV believes that if expanding scale and improving cost competitiveness are the top priorities for the industry's short-term resilience, then for the long-term resilience of the European photovoltaic market, investment in research, innovation and high-quality products and achieving large-scale launch are equally important.
In December 2022, the European Commission launched the European Solar PV Industry Alliance, signaling its ambition to expand internal solar capacity. At that time, the alliance’s goal was to achieve an annual production capacity of 30GW across the entire value chain by 2025.
Support for European solar equipment manufacturers is needed due to a lack of gigawatt-scale integrated PV manufacturing in Europe, increasing competition from Asian equipment manufacturers and technology solutions around investment in R&D, the report said.
New technology options
Risks become very common if you choose a technology with low market penetration or invest in developing equipment that will not generate turnover. Therefore, solar companies must eliminate risk factors and commit to investing in the future development of their products and services, ETIP PV said.
The main challenge for policymakers and solar industry stakeholders is how to effectively implement resilience requirements while taking into account the impact of these measures on new investments within Europe and the cost of new PV projects in this region.
Since photovoltaic technology cycles are short, in five years or less new technologies may become available and investments in then-current technologies may become obsolete or, at least in terms of performance, unable to compete at the same level.
In addition, the report highlights the current industrial policy challenges facing Europe, namely how the PV industry can keep pace with emerging new technologies such as perovskites.
"In the next few years, Europe needs to make concerted efforts to transform its leading position in perovskite innovation over the years into industry competitiveness and lay the foundation for the sustainable development of the entire European photovoltaic industry."
cost difference
A key element of elastic costing is the range of new technologies entering the market. TOPCon is becoming a dominant force, with heterojunction (HJT) and interdigital back contact (IBC) technologies also gaining market share and replacing passivated emitter and back cell (PERC) technologies.
As shown in the figure below, the price difference in holding costs between different regions and technologies (mainly China vs. Europe and the United States) can reach $0.10/watt.
Differences in manufacturing costs result from a variety of factors, including differences in material costs between regions, labor costs and depreciation costs for equipment and buildings.
Another factor that affects the effectiveness of resilience measures in Europe is the capital costs and capacity factors of modules, which can have a significant impact on the development costs of PV projects. Currently, interest rates remain high in Europe, which has a greater impact on project developers and increases the challenge of developing adaptation measures.
At very high interest rates (e.g. 11%), large-scale terrestrial photovoltaic products in Nordic climates may face projects with LCOE 25% higher and module production costs 15 euro cents/Wp higher, which will have a negative impact on development Speed makes a big difference.
"Substantial overcapacity has led to a collapse in global PV module prices, accelerating current trends (such as the move away from PERC in the market) and creating significant new challenges for European manufacturers unable to compete with the low-priced modules on the market.
A price collapse along the entire photovoltaic value chain would directly threaten many EU photovoltaic manufacturing companies, especially the small and medium-sized enterprises that form the core of the European photovoltaic industry. "
In the case of India, policy has stalled
This report examines India as a case study. To boost domestic solar capacity, India has implemented a number of measures including Basic Tariff (BCD), Approved List of Models and Manufacturers (ALMM), and Capacity-Linked Incentive Scheme.
These policies have attracted interest from domestic investors (large conglomerates and domestic PV manufacturers that are expanding production capacity) and foreign companies.
In the absence of a strong enough domestic industry to meet high demand, tariffs clearly had a negative impact on solar utilization in various sectors of the Indian economy, and the idea of protecting domestic manufacturers through trade measures was ultimately shelved.
Therefore, the ALMM plan was relaxed to 2025, mainly due to the lack of high-power module manufacturers in the ALMM list to meet the needs of large-scale ground-mounted PV projects in the Indian market.
The report stated that this setback did not hinder the development of India's solar manufacturing industry in 2023 and filled the technology gap in the domestic supply chain. As of the end of 2023, the Indian solar industry has a nominal annual module production capacity of 37GW and a solar cell annual production capacity of 6GW. It is expected that by 2025, the latter will increase to 25GW.
A similar situation can be seen with the Inflation Reduction Act in the United States and the imbalance between module and cell capacity and upstream module (mainly polysilicon) capacity.
The advisory board Clean Energy Institute discussed this issue in a PV Tech guest post last month. ETIP PV said: "It turned out that the IRA was not successful across the entire value chain."Trina solar panels