Europe’s Solar Industry Warns of Bankruptcies Over Cheaper Chinese Imports

The group reported that solar PV module prices have plummeted by over 25% to €0.15/W

September 13, 2023


The European solar manufacturing industry, represented by SolarPower Europe, has written to the European Commission, highlighting a critical issue regarding the low prices of photovoltaic (PV) modules imported from China into Europe.

SolarPower Europe reports that solar PV module prices have plummeted by over 25% to €0.15 (~$0.16)/W since the start of the year. European PV glass and module manufacturers are struggling to sell their products under these circumstances, and there is a looming risk of many European manufacturing companies facing severe difficulties, including insolvency, if swift action is not taken.

Despite efforts by the European Commission and member states to support the resurgence of the European PV manufacturing industry, Chinese PV manufacturers are intentionally undercutting prices, undermining these initiatives, the representative body said in its letter. This raises doubts about the effectiveness of EU objectives and the Net-Zero Industry Act in strengthening the EU’s PV supply chain.

The letter highlights the substantial increase in European expenditures on solar PV imports, surging from approximately €6 billion (~$6.4 billion) in 2016 to over €25 billion (~$27 billion) in the last year. European ports, primarily in Rotterdam, now hold a surplus of Chinese PV modules, exceeding Europe’s annual demand. At the start of 2023, warehouses contained around 40 GW of Chinese PV modules, equivalent to Europe’s annual installed volume in 2022.

Imports of Chinese PV modules have continued to surge, projected to reach a record 120 GW in 2023, surpassing expected installations in the same year, just over 60 GW. The organization claimed that this influx has severely impacted European PV manufacturers, their expansion plans, and prospects for new manufacturers within the EU.

The letter claims that Chinese companies aggressively offer European customers two-year contracts with prices consistently undercutting €0.15(~$0.16)/W. This has resulted in a significant decline in European PV module production, with manufacturers left with over 500 MW of unsold modules, equivalent to more than 30% of their annual manufacturing capacity.

The crisis extends to producing ingots and wafers essential for the PV industry. Norwegian Crystals, a notable ingot producer, filed for bankruptcy, while NorSun AS announced production halts and layoffs due to plummeting prices in Europe.

European PV manufacturers face a challenging choice: continue production shutdowns and risk bankruptcy by year-end or migrate to regions like the U.S., which support the revival of their PV industry. Unlike the departure of the European solar industry from the U.S. in 2012 which was accompanied by numerous bankruptcies, according to the group, European PV manufacturers are now welcomed in the U.S., thanks to initiatives like the Inflation Reduction Act and anti-dumping tariffs.

Demands by SolarPower Europe

The letter concludes with three urgent demands for action:

  • Exclusion of Forced Labor Products: SolarPower Europe calls for the immediate exclusion from the European market of solar modules produced with forced labor, emphasizing the rejection of products associated with modern slavery.
  • Emergency Acquisition of PV Modules: An expedited emergency measure to address the forced price decline caused by Chinese trade practices. This could involve acquiring European PV manufacturers’ solar module inventories through competitive bidding processes within frameworks such as the Temporary Crisis and Transition Framework (TCTF) or the Ukraine Facility framework for aid and energy support in Africa.
  • Promotion of European PV Production: Encouragement for European PV installers and project developers to incorporate a minimum share of European production along the entire value chain. This should be accompanied by the definition of European solar PV modules and non-financial criteria in PV auctions to reward environmental and social benefits. The industry urgently seeks assurance regarding the uptake of domestic production, starting no later than 2026.

Last October, CEOs from companies such as SolarPower Europe, First Solar, BayWa r.e., Wacker Chemie AG, and Iberdrola Group urged the European Commission to call for action to boost investment in the continent’s solar photovoltaic industrial base and reinforce the Commission’s solar deployment and energy security ambitions.

In June last year, energy storage company Fluence Energy and nine other energy market organizations also wrote to European policymakers to rethink the structure of European energy markets and the REPowerEU plan. They outlined why Europe needs a rapid rollout of technologies to increase grid flexibility and strong targets and policy frameworks to encourage the near-term adoption of these technologies.