L R AS Published on Saturday 25 September 2021 - n° 375 - Categories:Europe
PvXchange asks whether Europe can free itself from Chinese production
PvXchange wonders if Europe can free itself from Chinese production
The high price of panels is mainly due to the high cost of transport by ship
Prices fell a little in August
due to lower demand during the summer and the approaching end of the quarter. In the last few days, panel availability is good, resulting in a slight decrease in prices. This is a stock adjustment and therefore a short-term movement. pvXchange expects an upward correction in the coming months. The prices of panels that did not change during 2021 are those with low power, second factory batches, second-hand panels. These are not regular shipments from Asia.
For ten years, all attempts to present a competitive panel on the European mass market have failed. Today, there is no serious production capacity in the EU beyond the final assembly of panels. Silicon, wafers, cells, glass, film, frames, cables and junction boxes - most of the upstream products - now have to be sourced from Asia or outside the EU to keep the final product affordable.
These 'made in Europe' products are not much more expensive than purely Chinese panels, but they do not benefit from the absence of transport costs either, as all the materials have to be shipped from Asia. The situation is not much better for local panel manufacturers who still do the lamination themselves. They too have to import almost all their upstream products from Asia.
The high level of automation in production does not provide the Chinese with the advantage of lower labour costs. "The only disadvantages Europe has over Chinese production are energy costs and environmental regulations."The most difficult problem to solve, at least in the short and medium term, is the supply of pre-products.
Vertical integration of a large number of production steps, if possible at a single site, would be the ideal solution, as would high production capacity to achieve economies of scale. pvXchange says it is hard to find anyone in the industry who can imagine that Meyer Burger will succeed in capturing a significant share of the market with its current configuration and pricing structure. The manufacturer is struggling with the availability and cost of its raw materials, which has resulted in delayed deliveries of batches of panels ordered months ago and prices that are almost double those of the major Tier 1 manufacturers.
It would take a much higher carbon price or radical action by the future German government to recreate large-scale silicon and wafer production. The challenge for Meyer Burger will be to last long enough for time to work in its favour and constitute a change. Otherwise, China and its products will continue to dominate the local solar scene with flying colours.
pvXchange of 21 September 2021
Editor's note: pvXchange's analysis is clear and agrees with ours for different reasons. For him, the disappearance of complementary manufacturers from the panel production is the main obstacle to a rebirth of a European production. It would be necessary to reconstitute the various industrial chains, if possible in a close environment to limit transport costs.
He adds a condition that seems anecdotal but could prove decisive: energy costs and European environmental regulations: the frugality of Chinese workers is no longer acceptable in Europe.
However, the shortage of silicon, which has been well organised by the Chinese government, may make European political authorities think twice. We cannot both demand more clean energy from solar panels and depend on the goodwill of China, which is at war with the United States. The US has seen the threat of total dependence on China and will do everything to counter this hegemony. China, on the other hand, has achieved this domination and intends to maintain this monopoly. This means that the conflict between these two powers will continue. Europe will suffer the consequences, as it did with the latest Chinese measure to limit the use of energy to produce silicon.
Having suffered the negative effects of this domination and conflict, it may be a trigger for Europe's industrial awakening.