The European solar industry fears defeat in the face of Chinese competition

Opened less than three years ago, the German factory of the Swiss company Meyer Burger in Freiberg, near Dresden (east), was presented as an example of the reconquest of the photovoltaic industry on the Old Continent.

The Swiss group announced on Friday that it would stop production in "the first half of March", "a first step" before the definitive closure of the site.

Meyer Burger cites “market distortions created by excess supply and dumping in solar modules”.

In its sights: competition from China which has been flooding Europe with photovoltaic components since access to the American market was closed, causing prices to collapse.

The Freiberg factory, which employs nearly 500 people, is not the only one to pay the price for this excess supply.

The Dutch group Exasun, which presents itself as the oldest manufacturer of solar panels in the Netherlands, filed for bankruptcy in January. “At the end of 2022, the global solar panel market collapsed. The near-closure of borders for Chinese solar panels by India and the United States created a large surplus in the European market, leading to lower prices sales of more than 50%,” he explained.

Faced with these components at knockdown prices, "no one can compete", said Erik Løkke-Øwre, general manager of the Norwegian group NorSun, announcing last September the "temporary cessation of production" at its Ardal factory, in western Norway.

Stocks

Norsun, which presents itself as the only European manufacturer of silicon "wafers" (thin plates of semiconductor material) used in the composition of photovoltaic cells, then estimated that the stocks of modules accumulated in Europe due to the excess of offer, were equivalent to “more than a year of uninstalled capacity”.

In Germany, the photovoltaic panel manufacturer Heckert Solar, one of the oldest in the country, has "slowed down production and paused investments", according to statements made in early February to the daily Handelsblatt.

Without urgent support measures, "I am convinced that there will be no significant production solar industry in Europe", assured Detlef Neuhau, boss of the Solarwatt group, based in eastern Germany, during of a recent debate.

Especially since the European industry is also faced with competition from the United States, where photovoltaic production has been massively subsidized since the introduction of the Inflation Reduction Act in 2022, which is pushing many European companies to develop overseas. Atlantic.

Meyer Burger also announced on Friday that it would concentrate its investments in the United States, considered much more attractive. The group has two factories under construction there.

Bad news as the European Commission wants that by 2030, 40% of its needs for green technologies, including solar panels, will be produced in Europe in order to reduce dependence on Chinese companies, which control 80% of the country's industrial processes. photovoltaics around the world.

Complete turn

The objective is laudable for Jules Nyssen, president of the Renewable Energies Union (SER) in France: "Covid and the energy crisis have shown that we need to have sufficient production capacity to be able to cope in the event of glitch,” he recalls.

In early February, the European Parliament and EU member states agreed on a series of regulatory reliefs to allow more manufacturing in Europe.

In order to favor European suppliers, the regulation notably includes environmental and resilience criteria in 30% of calls for tender for renewable energies such as wind farms or photovoltaic installations, seen by some as an embryo of European protectionism.

“For the EU, which was built on free trade, this is a complete shift,” Jules Nyssen told AFP, who thinks that Meyer Burger's announcement could spark other initiatives at the European level. .

Faced with the production capacities of Asian solar factories "generally ten times higher than those of European solar producers", we need "a policy of support for the construction phase of giga-solar factories", insisted Friday Carsten Körnig, president of the German Solar Energy Federation (BSW-Solar), calling for funds from the German government.