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‘Build giant factories to make European solar profitable’

Study by Fraunhofer ISE also says lower transport costs and producing PV in a low-labour cost European country would help

At output capacities of at least 5GW per year, European PV manufacturing across the entire value chain would be competitive again when compared to Chinese production, a survey by the Fraunhofer ISE institute commissioned by German engineering federation VDMA concludes.

While the production equipment for solar modules is still manufactured in Germany, the production of cells has almost completely moved to Asia – despite anti-dumping tariffs slapped on Chinese produce earlier this decade.

Europe’s last large PV producer, Germany’s SolarWorld, became insolvent a second time last year, and sold off its US subsidiary to US rival SunPower.

The process of decline in Europe could now be reversed, the study finds, at competitive costs and without state subsidies.

“Securing the energy supply in the age of climate protection means having PV cells and modules in sufficient numbers,” said Jutta Trube, head of VDMA Photovoltaic Equipment.

“However, the first supply shortages for solar modules, which are mainly produced in Asia, are already becoming apparent. A new dependency is emerging for Germany and Europe, although the technological competence is available here.”

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A production capacity of at least 5GW per year would correspond to one-thirtieth of the currently installed global production capacity of around 150GW/year, and mean an investment of slightly over €1bn, the study said.

Competitive production costs could be reached in Europe not least because transport costs from Asia are eliminated, and would be favoured by manufacturing in a European country with comparatively low labour costs.

The Fraunhofer study pointed out that annual PV installations figures are predicted to rise from 11.5GW last year to 24GW in 2020, and would need to jump to a massive 100GW per year between 2025 and 2030 (boosted by sector coupling) if the targets of the Paris climate agreement are to be reached.

"With a European production of solar cells and modules, however, CO2 emissions could be reduced to a minimum. Moreover, the topic sustainability could be introduced into the energy system as a result of recycling economy," said Trube.

"Politicians can support this process with appropriate general regulations, such as suitable expansion corridors, priority feed-in of renewables and a fitting grid infrastructure"

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