March 26, 2012
Solar electricity generated from PV panels and mirrors is due to become one of the leading sources of power generation in the 21st century. It is abundantly available and will become cheaper to produce than fossil or nuclear electricity, due to technological advances in thin-film solar cells and conversion rates of solar irradiation.
EU researchers had recognised this almost 40 years. The EU, Germany and Spain have promoted solar research and encouraged consumer demand by long-duration subsidies up to 40 cents/kWh for home-generated PV electricity sold to utilities.
Thanks to these subsidies, the most expensive after nuclear power, Europe has become the world`s biggest user of PV electricity. Of the total capacity of 67 GW installed world-wide in 2011 more than two thirds are situated in Europe, mostly in Germany, Spain and Italy.
Until the middle of the last decade Europe has also been the leading manufacturer of PV cells and panels, before ceding its initial competitive advantage to China. Taiwan and USA. In 2010, the eight leading of manufacturers of solar modules were Chinese, only one European and one American. In 2011 China dominated 57 per cent of the world market, compared to only one per cent in 2001! During the same period, Germany, the major European manufacturer, barely managed to hold its world market share at a meagre 6-7 per cent!
This dramatic shift has a very simple explanation.
The EU has not been able to formulate an industrial policy for renewable energy.
It has failed to realise that solar and wind are two key technologies for the world`s future power supply that require a strategic guidance and support. Energy and industrial policies have not been synchronised, due to national fragmentation, rivalries and dogmatic approaches. Lacking a strategic long-term vision for solar and wind industries the EU`s future power supply might sooner or later depend on imports of solar panels, wind turbines, rare earths and technology from China.
Contrary to industry claims, the loss of market share of German and US solar panel manufacturers to their Chinese competitors is not due to high Chinese subsidies: the anti-subsidy filing by US producers has not yielded the hoped-for result. On March 20, the US Commerce Department has decided to impose countervailing duties ranging only from 2.9 to 4.7 per cent on imports of Chinese solar panels, compared to a 60 per cent decline of market prices for PV modules between 2008 and 2011. Asian manufacturers, involved in cut-throat competition, have, indeed, undertaken huge efforts in reducing their production costs and making PV-generated electricity more competitive with fossil-generated one.
After 30 years of research and deployment efforts, solar energy is still in an infant stage. The 67 GW capacity installed world-wide cover no more than tiny 0.5 per cent of global electricity demand!
The European solar industry therefore still has a chance of survival, provided it concentrates on high quality and economies of scale. This requires the EU Commission and the European photovoltaic industry to urgently devise appropriate strategies.
The same applies to the European wind power industry which is also in a dire state. After having been the uncontested world leader, it has to share that role with manufacturers in China and elsewhere.
Both industries are of strategic importance for Europe’s future energy supply. Both must remain competitive world leaders. It is up to the industry with the support from the European Commission to make this happen.
Author : Eberhard Rhein