All types of photovoltaics that use as little land as possible are good, including floating solar plants, agrivoltaics and building-integrated photovoltaics, said Walburga Hemetsberger, CEO of SolarPower Europe. In an interview with Balkan Green Energy News, she reiterated the call for the European Union to help the national industry in the sector.
Solar power plants are synonymous with energy transition and decarbonization. And vice versa! Photovoltaic units are cheaper and simpler to install than other technologies. They enable individuals, households, small businesses and institutions to produce electricity for their own consumption. They are the basis of the electrification of everything.
But the historic expansion in Europe is still not reflected, far from it, by an increase in national production of parts ranging from cabling to inverters to solar panels. This means the job is only half done. The manufacturing sector is essential in terms of employment, technological development and competitiveness.
Balkan Green Energy News spoke with Walburga Hemetsberger, CEO of SolarPower Europe, who described current industry issues and tools to overcome them.
In a recent letter to the European Commission, SolarPower Europe warned of the risk of a wave of bankruptcies in the manufacturing sector. You highlighted the sharp drop in prices for materials and equipment, saying this is hurting producers. Until recently, the problem was scarcity of materials and equipment and soaring prices. How did it reverse itself so quickly?
As with all other green technology sectors, demand is booming. So there comes a point where large investments in production lead to overcapacity.
We had some supply chain issues during the pandemic, and then demand got even stronger with energy prices soaring. So everyone suddenly increased their manufacturing capabilities. At the same time, wholesalers and installers were replenishing their stocks, as they had previously experienced shortages.
Then, with stocks full and overcapacity on the manufacturing side, prices fell to levels not seen since before the pandemic, including for the raw material polysilicon.
Additionally, we found that developers are going through a tough time. The market has fallen a bit since the start of the third quarter. All this has created a real storm in a few weeks and it is detrimental for a European industry to return to growth.
The letter calls for an emergency acquisition of equipment stored in Europe. Who would buy the module stocks and what would be the next step? What is the idea behind the proposal for a solar manufacturing bank?
For example, the European Union could use the new facility for Ukraine. This is a fund that helps develop Ukraine through green technologies. The stocks would cost between 80 and 100 million euros. But as European production generally remains more expensive than elsewhere, we believe that in the long term, this gap will have to be closed.
We propose to create a solar manufacturing bank. Manufacturers could bid on the platform to sell their equipment. On the other hand, buyers and project developers offer to purchase European modules.
There is currently a lag, but a European fund, for example the Innovation Fund, could provide funding to close the price gap. This would be a very cost-effective way to subsidize manufacturing facilities, because they are small and we need to expand them.
Several technologies and concepts are emerging in the sector. For example, floating photovoltaics, agrivoltaics, building-integrated photovoltaics (BIPV), citizen energy and energy sharing at the scale of the distribution network… Can they become real pillars of the transition energy?
All technologies and approaches that use as little land as possible are good. It is obvious. Floating solar power plants, agri-PV and BIPV are some examples.
The European Commission is indeed proposing mandatory photovoltaic systems on roofs. You just have to use the spaces you have and rooftops are the most obvious because consumers are right underneath.
Roofs should be used as much as possible, in the sense that energy should be shared with others. Additionally, combinations with heat pumps and electric vehicles provide savings for consumers.
You said Serbia would be an ideal location for large manufacturing facilities. What are investors waiting for?
Europe needs large factories to be competitive. Particularly with Chinese companies. The sites there can produce from 5 GW to 10 GW per year. Our goal is to have an annual production capacity of 30 GW per year by 2030.
This requires political support and collaboration from Member States. It doesn’t help us to have a small manufacturing site here and another small one there.
We need to see intensification throughout the value chain, at all phases of manufacturing, and ensure that the entire ecosystem
In Europe we have module manufacturers who mainly assemble solar cells from China. We need scale across the value chain, across all phases of manufacturing and across the entire ecosystem.
We also need to be quicker to issue permits and provide access to land.
Everyone can seize the opportunity and offer the best framework and conditions to attract value creation in their country. To create jobs. As long as Serbia offers such conditions, manufacturers will be happy to come here to develop.
There is political support in Europe for reviving the manufacturing sector. One of the ideas currently being debated within the EU is to make it easier to grant state aid to industrial projects. In addition, European products could be awarded bonuses based on criteria other than price during special auctions.
This is an opportunity not only to develop renewable energies, but also to produce them.
What would be the non-price criteria?
ESG criteria – environmental, social and governance – are, for example, under discussion. We believe that we can offer clear advantages when it comes to sustainability requirements.
The European Commission also proposes a resilience criterion, for sectors more than 65% dependent on third countries. Solar energy and batteries are clearly eligible.
This brings us back to dependence on Chinese imports and efforts to reduce it. But can current ambitions in terms of solar energy deployment come to fruition without Chinese equipment? Wouldn’t the restrictions be counterproductive? Is there a happy medium?
We import about 90% of the products we need for solar deployment from China. It is in no one’s interest to slow down the energy transition. That said, it is extremely important to build this resilience.
We need a balanced approach, where we do not slow down the energy transition, but continue to help European manufacturers grow and compete. We want to have strategic autonomy, which requires a very clear industrial plan. Trade barriers are not the solution to the current crisis.
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