The world is overproducing solar panels. The capacity of factories exceeds demand by 2 TW. Because of this, Europe and the US are suffering, which blame Chinese companies for low prices due to state support. So far, only consumers are winning.
“Founded in Dresden in the early 1990s, Solarwatt quickly became a symbol of Europe’s renewable energy ambitions and bold plan for solar power. The opening of a new solar panel factory in Dresden at the end of 2021 was seen as a small victory in the battle for market share from Chinese groups… Now Solarwatt is preparing to halt production at the plant and move that work to China,” The Financial Times writes.
The company’s product director Peter Bachmann told the publication that he felt sorry for the employees, but that economically the company could not have done otherwise.
Solarwatt is not alone, The Financial Times notes, “A global oversupply has crashed solar panel prices over the past two years, leaving a number of European manufacturers unprofitable, jeopardizing US President Joe Biden’s ambitions to turn America into a renewable energy powerhouse and even ricocheting to Chinese companies that dominate the global market.”
“We are in a crisis,” said Johan Lindahl, secretary general of the European Solar Energy Industries Council.
While companies in Europe, the U.S. and even China are cutting jobs, postponing projects and mothballing facilities, the abundance of cheap solar panels has brought one significant benefit – consumers and businesses are installing them in increasing numbers.
According to the International Energy Agency (IEA), solar-generated electricity is expected to surpass wind and nuclear power by 2028.
According to SolarPower Europe, the industry employed more than 800,000 people in Europe at the end of last year. In the U.S., the sector employs nearly 265,000 people, according to data from the Interstate Renewable Energy Council.
Panel prices have fallen more than 60 percent since July 2022, according to BloombergNEF.
“The scale of the damage has provoked calls for Brussels to protect European companies from what the industry says are state-subsidized Chinese products,” the British publication continues. It cites an estimate by the European Solar Energy Industries Council: solar panel capacity in Europe has collapsed by about half, 3 GW, as companies have gone bankrupt, mothballed facilities or moved production abroad.
On the one hand, cheap solar panels are affecting demand and addressing Global Warming. On the other, attempts to address overproduction have caused a national and regional divide.
“There’s trade policy and there’s climate policy, and they’re not synchronized,” said, AES executive director Andres Gluski. – That’s a problem.”
Thus, the U.S. has imposed new tariffs on solar panels from China – from 25% to 50%. The same policy is planned to be followed in Europe.
At the same time, American companies complain that even such draconian measures will not protect them.
“In April, a coalition of manufacturers, including First Solar, QCells and Meyer Burger, filed a petition with the U.S. International Trade Commission calling for new tariffs on solar panel imports. They accuse Chinese solar companies of dumping cells into Southeast Asia, where the bulk of US imports come from,” The Financial Times continues. The publication cites that a solar panel made entirely in the U.S. using Inflation Act subsidies costs 18.5 cents per watt. But one produced in Southeast Asia is 15.6 cents and in China just over 10 cents.
“With industries in Europe and the U.S. under pressure, a key uncertainty is whether Chinese companies can sustain current price levels or will cut production to shore up their own finances. In March, China’s Longi, the world’s largest solar company, cut 5% of its 80,000 employees,” the British publication writes.
“Chinese producers are also struggling in the current low price environment,” said Marius Bakke, senior analyst at Rystad Energy.
2,262 total views, 2 views today
