BERLIN — Germany was the world's largest producer of solar panels until about a decade ago, when China ramped up production and beat almost everyone on prices.
As Europe tries to reach ambitious targets to reduce greenhouse gas emissions, demand for panels has increased.
Some of the last remaining manufacturers in Germany's solar industry are demanding that the Berlin government offer incentives to protect surviving producers. They argue that high European standards for the origin of materials and shorter supply chains make production in Germany more environmentally friendly and reliable.
But some critics point out that tariffs applied by the European Union to Chinese solar panels from 2013 to 2018 failed to save the domestic industry.
Any move to restrict imports “must be weighed against the objectives we have set for ourselves when it comes to the energy transition,” Mairead McGuinness, European commissioner for financial stability, told the European Parliament in February.
But for European solar manufacturers, the problem has worsened in the last year. Not only have the Chinese increased their production of solar panels, but the United States has also tightened its tariffs to include Chinese panels sent to Southeast Asian countries for final assembly. That has caused a flood of Chinese panels to arrive in Europe at below-market prices, government officials and business executives say. Last year, more than 97 percent of the panels installed in Europe were imported.
“Chinese competitors are currently giving away their products in unimaginable quantities in Europe at prices far below their own production costs,” said an open letter to the government written by Gunter Erfurt, CEO of Meyer Burger, a Swiss solar energy company that It has two factories and a research center in Germany. “We fight for fair market conditions.”
The German Solar Association is calling on the government to push forward a proposed incentive, called a “resilience bonus”, that would pay solar panel owners a higher rate for electricity fed into the grid from panels produced in the country.
To meet its ambitious climate goals, Germany needs to generate an additional 80 gigawatts of solar energy per year. But last year, the country installed enough to generate only 9 gigawatts—and national photovoltaic companies say they have the capacity to produce only about one gigawatt of solar energy per year. That reality has led to a dispute within the German solar industry, as some believe the subsidies will do more harm than good.
Philipp Schröder, who runs 1Komma5, a solar company he co-founded, said he sourced his components mainly from Europe and the United States, and was successfully competing against low-cost Chinese panels by combining panels with heat pumps, batteries and software to operate the entire system. . He is against government support.
Last month, Meyer Burger deepened the dispute when it halted production at its facility in Freiberg, eastern Germany, and said it would shift its focus to expanding production in Arizona and Colorado. There you can take advantage of US tariffs and incentives.
The billions of dollars in subsidies that Germany has promised to attract other companies, including battery producer Northvolt and microchip makers Intel and TSMC, further fuel anger.
Sven Giegold, Undersecretary of the Economy Ministry, told reporters that Germany would propose measures to help “support local production of solar technology,” but quickly added: “Trade defense measures are not useful.”
“If we can't beat the Chinese in quantity, we must try to beat them in quality,” said Simone Tagliapietra, a senior fellow at Bruegel, the Brussels-based think tank.
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