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The European solar manufacturing industry has warned there will be further plant closures without state support, after Germany’s biggest panel producer announced plans to switch its operations to the US.  

In the past week, Swiss-headquartered Meyer Burger said it had started preparations for shutting its Freiberg solar panel plant by April, presenting a financing plan aimed at stopping “sustained losses in Europe” and allowing it to open two factories in the “highly attractive” US market. 

The company, which employs 500 people in Freiburg, said it would hold a shareholder rights issuance next month to raise CHF250mn (US$284mn), after securing a guarantee from the German export credit agency (ECA) for a bank facility worth up to US$95mn and with a 10-year tenor. 

Proceeds from the Euler Hermes deal and the rights issue – alongside potential financing under the US government’s Inflation Reduction Act (IRA) – would enable the firm to open a solar cell manufacturing facility in Colorado and a module plant in Arizona by the end of 2024, Meyer Burger says. 

The move comes amid wider turmoil in the European solar market, with panel manufacturers having been roiled by oversupply and a sharp drop in prices – amid a glut of cheap Chinese imports – since mid-2023. Last month, Meyer Burger warned of the “severe impact” of market distortions. 

Johan Lindahl, secretary general of the European Solar Manufacturing Council (ESMC), an industry body, says the Meyer Burger decision is just the “tip of the iceberg” and further closures are expected.  

“Meyer Burger currently has the largest amount of module [manufacturing] capacity in Europe, and their decision will have ripple effects through the entire value chain,” he tells GTR.  

Lindahl says manufacturers of components such as solar glass, connectors, ingots and wafers that are used in the production of panels would lose “one of their biggest European customers”.   

“It’s not good news at all, but it’s not surprising. We have been warning the European Commission about this scenario since September. And so far, the policymakers have not been quick enough to act in saving the current European manufacturing industry.” 

Other European solar panel manufacturers have indicated they are also eyeing the exit door.  

As reported by Handelsblatt in January, Solarwatt is considering closing its factory in Dresden unless the government helps it overcome unfair competition from China.  

Coupled with the Meyer Burger closure Lindahl says: “We are afraid we’re going to lose four gigawatts of capacity in the next month. When we talk to our members, many more are in the same situation.” 

Earlier this month, the ESMC made a public plea to the European Commission calling for “emergency measures” to safeguard the EU’s supply chain from “heavily subsidised” imports from China.   

The industry association says European photovoltaic module manufacturers theoretically have the ability to produce 11GW in capacity, yet produced just 2GW-worth of modules in 2023.  

Roughly half of the solar panels made last year are currently languishing in storage due to the “prevailing market conditions… expected to persist throughout at least 2024”, the ESMC adds.  

 

The solar conundrum 

To date, European policymakers have opted against introducing emergency backing for manufacturers, amid fears it could hinder the bloc’s efforts to rapidly accelerate solar development. 

In early February, Mairead McGuinness, the European Commissioner for Financial Stability, Financial Services and the Capital Markets Union, acknowledged the bloc has trade instruments at its disposal.  

But she said the EU must balance its desire to protect manufacturers with wider climate targets.  

“Given we currently rely to a very important degree on imports to reach EU solar deployment targets, any potential measure needs to be weighed against the objectives we have set ourselves when it comes to the energy transition,” McGuinness said.  

The EU deployed a record 56GW in solar capacity in 2023, data shows, a push that was driven by imports from China, which accounts for over 95% of the panels used in the bloc today.  

Broadly, Brussels is aiming to grow solar PV capacity from 263GW today to almost 600GW by 2030.  

Another industry association, SolarPower Europe, warned in October that levying trade tariffs risked “sanctioning the entire industry” and instead called for financial incentives, such as the establishment of a solar manufacturing bank. The group largely represents European solar PV firms, but also those in China.  

Lindahl says EU legislation aimed at stopping forced labour could offer the industry some protection, but he is also calling for immediate financial aid.  

He suggests the EU or its member states should subsidise firms for the difference between current market prices and the manufacturing cost of panels already produced. This bill is estimated at €160mn.  

Meanwhile, the industry needs a further €720mn over the next two years to keep factories operating at a low utilisation rate, perhaps around 30%, until the market hopefully stabilises, he argues.