European Commission wary of trade measures to protect solar industry

With affordable solar panels a key to the European Union’s energy transition goals, the use of trade measures must be weighed against the bloc's ambitious climate goals, a senior official said on Monday.

In a statement in the European Parliament, EU Finance Commissioner Mairead McGuinness discussed the price and oversupply crisis facing the European solar industry, but shied away from outlining any emergency measures that could help European solar manufacturers to weather the storm.

In a debate titled “State of EU solar industry in the light of unfair competition,” McGuinness acknowledged pressures on solar supply chains, noting that a surge in imports has seen prices plummet by more than 40%. The situation benefits citizens and installers, but it is “clearly a challenge” for manufacturers in the European Union, she said.

McGuinness reminded the European Parliament that the European Union is working on a vast set of instruments to support the solar industry, including the Net Zero Industry Act, which envisages that at least 40% of solar equipment deployed on the continent should be produced locally. However, 97% of PV deployed in Europe is presently imported, mainly from China.

“Given that we currently rely to a very important degree on imports to reach EU solar deployment targets, any potential measure needs to be weighed against the objectives we have set ourselves when it comes to the energy transition,” she told lawmakers.

According to McGuinness, the European Union will put rules in place in the future to ensure that factors other than price will be considered in public procurement exercises. This includes a push to ensure that no more than 65% of supply comes from a single source.

She said that more than €12 billion ($12.9 billion) has been approved for clean-tech equipment manufacturing in the European Union, including photovoltaics. The EU is also working with countries, including the United States and India, to reduce reliance on Chinese supply, she added.

Multiple European solar manufacturers have announced plans to close factories in recent months. The industry has called for measures to safeguard the sector but has rejected tariffs or trade barriers as suitable solutions to current challenges of oversupply and low prices.

Some of the previously proposed measures include the creation of a “Solar Manufacturing Bank,” as well as the implementation of non-price criteria for resilience and environmental, social, and corporate governance in solar auctions under the EU's Net Zero Industry Act.