Europe's Solar Industry Needs EU Support to Close Cost Gap with China
The European solar industry faces a significant cost disadvantage compared to its Chinese counterpart. However, with appropriate political measures, this gap can be narrowed to less than 10%. Experts propose a Europe-wide funding program to support the solar industry and help it reach the EU's 2030 targets.
A recent study by Roland Berger, commissioned by a consortium including Bosch, Tibber, and Techem, reveals that Europe's central energy demand could grow by billions of euros with increased solar adoption. To achieve the EU's goal of a 30-gigawatt annual photovoltaic production capacity by 2030, between six and ten factories with a capacity of three to five gigawatts per year need to be built across Europe.
The production cost of a solar module in Europe is currently around 0.103 euros more per watt than in China. This higher cost, along with increased expenses for equipment, materials, labor, buildings, and facilities, contributes to a 14.5% higher levelized cost of energy (LCOE) for European modules. As a result, photovoltaic utility-scale plants using European solar cells cost about 0.608 euros per watt, compared to 0.50 euros per watt for Chinese plants.
To bridge this gap and prevent Europe from losing its remaining industrial and technological solar capacities, the European solar industry requires between 1.4 and 5.2 billion euros in annual funding. Experts suggest setting up a Europe-wide, performance-based funding program to reduce cost differences and support the industry's growth.
The European solar industry faces a significant cost disadvantage compared to China, but with targeted political measures and increased investment, this gap can be narrowed. By supporting the industry through a Europe-wide funding program, the EU can help its solar sector reach the 2030 targets, secure its industrial and technological capacities, and ultimately drive the transition to renewable energy.
