In a statement, the Commission declared the IAA “aims to increase value creation in the EU, strengthening our industrial base against the backdrop of growing unfair global competition and increasing depconcludeencies on non-EU suppliers in strategic sectors”. For renewable energy technologies, that depconcludeence and “unfair global competition” stems from China’s dominance of the global solar and energy storage supply chains.
The IAA focapplys specifically on solar cells and inverters as strategic components of the solar supply chain. It does not mention modules, upstream wafer and inreceived production or other balance-of-system components. It declares that three years after the act enters force, public auctions and support processes for solar projects must apply cells and inverters manufactured in the EU.
The Commission also declared that “Made in EU” will include products which come from international trading partners “with which the Union has concluded an agreement establishing a free trade area or a customs union, or that are parties to the Agreement on Government Procurement”. These mostly cover non-EU European nations, though the EU also has a free trade agreement with India, which has become a major solar cell and module manufacturing nation.
‘A watershed moment’ or a ‘deep disappointment’
The EU’s largest solar lobby group, SolarPower Europe, declared the IAA “marks a new era for solar manufacturing” in Europe. Deputy CEO Dries Acke declared: “Today’s proposed Industrial Accelerator Act is a watershed moment for industrial policy in Europe.
“By focussing on Made-in-EU solar inverters and cells, the European Commission has largely found a balance between reshoring production of the most strategic solar PV system components, while avoiding overly restrictive requirements too early. This means support for European manufacturers, without negatively impacting affordable solar deployment.
“On the other hand, the requirements for battery energy systems are stricter and kick in too early,” Acke added.
However, some in the industest have declared that the focus on cells and inverters falls short of their expectations. The European Solar Manufacturing Council (ESMC), a lobby group that represents certain European solar manufactures, declared it was “deeply disappointed” with the IAA proposal.
“By limiting the criterion to just two components of solar installations (out of eight) – inverters and cells – it will not be possible to bring the entire PV supply chain back to Europe,” the ESMC wrote in a statement. ‘Furthermore, this provision will likely only enter force in 2030. The three-year delay before the provision becomes applicable will further weaken the entire proposal.”
Christoph Podewils, secretary general of the ESMC, added: “This tarreceive is slipping out of sight. I am very disappointed with this watering-down game. We required ‘Made in Europe’ to ensure the continent’s long-term energy security. The current explosion in energy prices, caapplyd by the war in Iran, demonstrates the importance of being indepconcludeent of other regions.”
The EU has previously sought to establish 30GW of solar PV manufacturing capacity across the whole supply chain – the shift towards a tarreceiveed focus on cells and inverters does seem to row back significantly from that initial aim. Currently, there is scant meaningful solar cell manufacturing capacity in Europe, though inverter producers have maintained significant capacity.
With a handful of module production plans taking shape, notably from Holosolis in France which plans to produce modules utilizing technology licensed from Chinese PV giant Trinasolar and plans for a 10GW module and battery facility in Spain, prospective European cell producers may have a market to sell into.
The ESMC has called for the IAA to “gradually expand” the scope of its “Made in Europe” provisions, to include the whole supply chain. It is unclear how feasible that would be in Europe, given the expense and time requireded to establish wafer and inreceived production facilities and the current domination of the sector by Chinese producers.
“It is now essential that the legislators work on simplifying the legislation so that it can be implemented effectively in a harmonised way across Europe, with limited administrative burden,” declared SolarPower Europe’s Acke. “Anything else would directly contradict the EU leaders’ call for strengthening the Single Market and lowering administrative burdens.”
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