The production of solar modules in Europe is hardly worth it anymore. Therefore, many manufacturers are moving their production facilities to Southeast Asia.

The energy transition has been inspiring entrepreneurs to found new startups in the wind, water and solar energy sectors for years. The solar industry in particular is highly competitive. Cheap solar modules from China are flooding the market and making it increasingly difficult for young companies to gain a foothold in this burgeoning industry.

Solar modules at dumping prices

Some manufacturers have already managed to reduce the prices of their modules to such an extent that, even for a large order, you sometimes pay less than if you bought a comparatively small German-made balcony power plant. Jenny Chase, senior solar analyst at research organization BloombergNEF, told the Financial Times (FT) that this is because panels have become so cheap “that we just put them everywhere.”

“Since installation costs (labor, scaffolding) make up the majority of the costs of installing a rooftop PV system,” it might make sense to simply install the solar modules elsewhere. According to the Financial Times, there are examples of this in the Netherlands and Germany. There you can see how residents turn their panels into garden fences.

“Why build a fence when you can just put up a row of solar panels, even if they're not exactly aligned with the sun,” says Martin Brough. He is head of climate research at BNP Paribas Exane's equity research team. “While the panels themselves are incredibly cheap, there are limits to the cost of installation and placement. […] A sort of do-it-yourself mentality emerges.

“The atmosphere is gloomy”

Some benefit, some suffer, that applies to them too.
Photovoltaic (PV) industry. While consumers benefit from falling prices, the industry is under increasing pressure. This is especially noticeable in Europe, explains Alessandro Barin, CEO of the Italian solar module manufacturer FuturaSun. His company also takes advantage of low production costs in China to remain competitive here.

A module currently costs around eleven US dollars per watt. This is about half of what you had to pay a year ago and prices continue to fall. According to Barin, it will not be long before it will simply be impossible for companies to invest seriously in European production. The margin is simply too small for that. That is why it is even more important for the European Union (EU) to promote production to strengthen its own industry.

American manufacturers also face similar problems. “The mood is gloomy,” emphasizes Danielle Merfeld, chief technology officer (CTO) of Hanwha Q-Cells, one of the largest American manufacturers of solar modules. Price discounts are so high, even for modules imported from Southeast Asia, that the domestic industry cannot keep up, even taking into account tariffs. “This does not create good conditions for the success of domestic manufacturers, especially in this fragile initial phase of growth.”

Source: Financial Times

By Philipp Rall