Why the sun has set on Europe’s solar power sector
China’s low-cost imports backed by state subsidies are wiping out green companies in the EU
Europe’s solar power sector has been devastated by cheap Chinese imports fueled by state subsidies.
The situation is so precarious in the European Union bloc that fears are growing that domestic companies will be wiped out if the EU fails to act with tough sanctions against Beijing.
Warning signs have been flashing for years. Last summer, European Commission President Ursula von der Leyen highlighted the destruction of China’s “unfair trade practices” during her State of the Union speech.
But now, it looks as if the sun has already set on the EU’s solar ambitions.
“The situation is really, really, really troublesome,” Johan Lindahl, the head of the European Solar Manufacturing Council, which represents the sector, told Politico this week.
“We might lose a majority of the European industry in the next couple of months if there’s no strong political signal,” he said.
How bad is the solar situation? It has only weeks left before [it] implodes
Politico’s China Watcher newsletter
Burning issues:
- A report in November revealed that China will carve out 80% of the world’s solar manufacturing capacity into 2026.
- It will be able to satisfy annual global demand for much of the next decade.
- The study by energy research firm Wood Mackenzie was released as countries such as the United States and India are subsidizing their solar industry.
Between the lines: “Despite strong government initiatives for developing local manufacturing in overseas markets, China will still dominate the global solar [sector],” Huaiyan Sun, the author of the report, said as reported by Reuters in November.
Delve deeper: Commission President von der Leyen summed up the mood perfectly when she stressed that the EU had “not forgotten how China’s unfair trade practices affected our solar industry.”
What they said: “Many young businesses were pushed out by heavily subsidized Chinese competitors,” von der Leyen pointed out.
Big picture: So, “how bad is the solar situation? Very. The EU industry warns that it has only weeks left before the sector implodes,” Politico reported in its China Watcher newsletter.
China Factor comment: Europe’s ray of hope is slowly disappearing.