Plan to curb Chinese solar panel imports to protect European market

BRUSSELS, Belgium: Amid a flood of cheap Chinese solar panel imports, Europe has been debating restrictions to protect the continent's few local solar manufacturers.

International Energy Agency data showed that in 2023, European Union (EU) countries installed record levels of solar capacity, 40 percent more than in 2022, with most panels and parts coming from China, reaching levels of up to 95 percent.

As a result, Europe's few local solar panel manufacturers are facing a crisis caused by cheaper imports and oversupply while policymakers are scrambling to respond.

In a letter to the European Commission in November, German Economy Minister Robert Habeck expressed concerns that the EU executive would implement trade restrictions on Chinese solar imports.

"I have heard that the Commission may be intending to impose safeguard measures against imports of photovoltaic (PV) modules from China. I have very strong concerns about this," he said in the letter.

Restricting Chinese imports could stifle Europe's rapid expansion of green energy and make 90 percent of the PV market more expensive, as well as risked bankruptcies among EU companies that assemble and install solar panels using imported parts, he added.

Meanwhile, Spain has not ruled out tariffs on imports of solar panel materials, the Netherlands wants to cover solar PV imports with the EU's carbon border tax, and Italy announced a US$97 million investment in a PV panel factory in Sicily last week.

To ease oversupply, European solar manufacturers have urged governments to buy up excess inventories of solar modules and, as a last resort, consider trade barriers.

However, the broader green energy industry opposes import restrictions.

In an interview with Reuters, Miguel Stilwell d'Andrade, CEO of Portuguese utility EDP, said, "You cannot reduce dependency on China in the short term, or you do not build the projects."

Gunter Erfurt, CEO of Swiss panel maker Meyer Burger, said Europe is now in a "price war" with China.

"The solar industry in China has been strategically subsidized with hundreds of billions of dollars for years," he said.