Written by 5:28 am News

European Solar Industry Crisis: A Threat to Job Growth and Economic Stability

SolarPower Europe, the leading association representing the solar PV value chain in the continent, …

By [Your Name], Financial Times

The European solar industry, which witnessed a remarkable growth in employment last year, is now facing a significant challenge due to plummeting solar module prices. SolarPower Europe, the leading association representing the solar PV value chain in the continent, has issued an urgent letter to key European leaders, emphasizing the potential threat to the industry’s job market and the broader economic implications.

In 2021, the European solar sector saw a 30% increase in employment, adding over 100,000 jobs, with Poland, Germany, Spain, and the Netherlands leading the way. The majority of these jobs were in installation, accounting for 79% of total solar employment. The high-value strategic sector of solar PV manufacturing provided around 44,000 jobs, while operations and maintenance contributed another 40,000.

However, the recent sharp decline in solar module prices in Europe, as highlighted in the letter from SolarPower Europe, poses a significant threat to these gains. Prices of PV modules have plunged by over 25% since the start of the year, making it challenging for European manufacturers to sell their products and potentially leading to insolvencies. This situation not only jeopardizes the industry’s growth but also threatens the livelihoods of hundreds of thousands of workers.

The association attributes this price drop to a ‘perfect storm’ in the global solar PV sector. Factors include strong global demand during the pandemic, leading to fierce competition among Chinese suppliers, resulting in overcapacities and subsequently, rapidly falling prices. Additionally, a temporary slowdown in the European solar market in Q3, combined with other factors like power price decline and interest rate hikes, has further exacerbated the situation.

While price drops are typically welcome news, if unchecked they have serious repercussions for our open strategic autonomy. In the short term, this is already posing real challenges to domestic competitiveness and the rebirth of EU solar manufacturing. We’re urgently calling on EU leaders to save Europe’s strategic tech supply lines.”  said Walburga Hemetsberger, CEO of SolarPower Europe

To address this crisis and safeguard the employment gains, SolarPower Europe proposes several measures, including emergency acquisition of European PV manufacturer’s module inventories, establishment of a Solar Manufacturing Bank at the EU level, and revising the Temporary Transition and Crisis Framework (TCTF) for State Aid.

Furthermore, the European Commission set a 750GW solar power target for 2030 as part of the REPowerEU plan. Under this plan, the EU will require more than one million solar workers by 2030. However, if European and national policymakers can resolve permitting and supply chain issues, the EU solar industry would need one million employees by 2026.

To address this crisis, SolarPower Europe proposes several measures:

  1. Emergency Acquisition: Immediate purchase of European PV manufacturer’s module inventories to prevent looming depreciation and ensure the survival of many European manufacturing companies.
  2. Solar Manufacturing Bank: Establishment of a Solar Manufacturing Bank at the EU level, similar to the Hydrogen Bank under the Innovation Fund.
  3. Address State Aid Framework: Revising the Temporary Transition and Crisis Framework (TCTF) for State Aid to allow for aid for operational expenditure.
  4. Accelerate Net Zero Industry Act: Speed up the adoption of the Net Zero Industry Act and introduce ‘resilience auctions’ to ensure a stable market for European manufacturers.
  5. Support Solar Stewardship Initiative (SSI): Back the SSI to ensure sustainability best practices in production.
  6. Collaboration: Encourage collaboration between Member States to support the build-up of PV manufacturing value chains in Europe.
  7. Boost Demand: Increase demand for solar PV in Europe through various measures, including a rooftop solar mandate and accelerating renewable energy regulations.

In conclusion, while the European solar industry has shown promising growth in recent years, the current price crisis underscores the need for strategic interventions to ensure its sustainability and the continued growth of employment opportunities in the sector.

For more details and in-depth analysis, refer to the original letter from SolarPower Europe and the EU Solar Jobs Report 2022.

Source: SolarPower Europe