ARKANSAS, Oct 2 (Future Headlines)- Europe’s solar power industry is currently facing a critical juncture as policymakers debate the possibility of imposing tariffs on imports. The industry, represented by SolarPower Europe, has issued a warning against such tariffs, expressing concerns that disrupting the supply chain of products from China could severely hinder Europe’s ability to rapidly expand its clean energy capacity.
This call for caution comes at a time when European authorities in Brussels and various governments across the continent are contemplating stricter measures on imports. Their aim is to bolster clean tech manufacturing within Europe while reducing dependence on Chinese products crucial for the green energy transition. The European Commission recently initiated an investigation that could potentially lead to tariffs being imposed on Chinese electric vehicle imports to protect EU producers. Simultaneously, Germany is exploring various options, including trade protections, to safeguard local solar manufacturers from declining global prices, as revealed in a government document obtained by Reuters.
SolarPower Europe, an industry group encompassing producers, large buyers, and companies involved in solar installation, has strongly voiced its opposition to tariffs as a solution to the challenges faced by the European solar industry. Gunter Erfurt, Board Director at SolarPower Europe, emphasized that tariffs would not be a suitable response and warned against penalizing the entire industry. Instead, Erfurt advocated for incentivizing solar installations originating from resilient European solar production. This approach, he argued, would allow the deployment of solar energy to continue uninterrupted while enabling steady growth in European solar manufacturing.
In a statement, SolarPower Europe described trade barriers on solar products as a “lose-lose strategy.” Instead, the industry group urged policymakers to focus on supporting local manufacturers and facilitating their growth. This support could include measures to make it easier to provide assistance to local factories in accordance with EU state aid rules. Notably, SolarPower Europe did not explicitly mention China in its statement. However, the implications are clear, as China plays a central role in the global supply chain for solar products.
An essential context for this debate is the European Union’s heavy dependence on China for solar product imports. According to the European Commission, over 90% of the EU’s ingots and wafers for solar panels are sourced from China. European manufacturers have been raising concerns about an influx of Chinese solar modules into the European market, often offered at prices below manufacturing costs. This has compelled local manufacturers to reduce their prices to remain competitive.
The solar power industry’s concerns about tariffs are rooted in past experiences. The period between 2013 and 2018 witnessed a dip in Europe’s solar energy installations, coinciding with EU restrictions on tariff-free imports of Chinese solar panels and cells. This history underscores the industry’s apprehensions that restricting Chinese supplies could potentially hinder Europe’s solar energy growth, just as it aims to accelerate the adoption of clean energy solutions. Despite these challenges, the EU achieved a significant milestone by installing a record 40 gigawatts of solar power capacity in the previous year, highlighting the region’s commitment to expanding its clean energy sector. Hence, finding a middle ground that fosters both local production and renewable energy expansion will be crucial in shaping the future of Europe’s solar power industry.
Writing by Kevin Wood; Editing by Sarah White