An Industrial Strategy for Solar in Europe
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An industrial strategy for solar in Europe SolarPower Europe would like to thank the members of its Industrial Competitiveness Task Force that contributed to this report including: Chair Vice-chairs Sponsor Members: FOREWORD: THE SOLAR VALUE CHAIN: A UNIQUE OPPORTUNITY FOR EUROPE As policymakers, investors and consumers increasingly enjoy the benefits of clean, flexible and low-cost solar power, solar technology has become the world’s most popular power generation source. In 2018, more solar power capacity was installed than all fossil fuel and nuclear sources combined, and almost twice as much as wind. In the coming years, SolarPower Europe anticipates 2-digit annual market growth in Europe, with solar playing a major role in meeting Europe’s 32% renewables target by 2030, and beyond. The potential for growth is indeed significant, as the latest studies suggest solar could cover 69% of Europe’s electricity generation in a 100% renewable scenario, with over 2 TW installed in 2050.1 Beyond its significant contribution to Europe’s clean energy future, the solar industrial value chain holds promise for Europe. It is highly innovative and offers modular, easily deployable energy solutions, able to quickly benefit from the effects of scale. Today, solar already provides both low-cost and highly efficient large-scale centralised solutions and decentralised consumer-oriented business models, enabling the creation of local and highly qualified jobs in Europe. Solar energy is an agile technology, it offers a high degree of flexibility and provides valuable services to the electricity grid. Combined with its low-cost profile and scalability, solar is a fundamental driver for the full decarbonisation of the European economy, providing highly efficient and sustainable electrification and, in a near future, converting green electrons into renewable molecules. Building bridges with chemicals, agriculture, digitalisation and e-mobility sectors will increasingly diversify the solar industrial value chain in the years to come. EU policymakers now need an overarching strategy to promote the growth of the solar industry in Europe and make the most of its industrial value. The Clean Energy Industrial Competitiveness Forum, established in 2016, must help develop a meaningful supply side industrial policy for solar and support the market uptake of Europe’s cutting-edge solar technologies. It will generate countless new business opportunities and jobs for Europe – the solar sector alone could support at least 300,000 jobs by 2030, compared to 81,000 Full-Time Equivalents (FTEs) in 2016.2 TARGETS FOR A PRACTICAL SOLAR SUPPLY SIDE POLICY • Jobs and general value added (GVA) should be dramatically increased in the solar sector by 2030: Europe should target 300,000 solar jobs by 2030 compared to 81,000 Full-Time Equivalents (FTEs) in 2016 • The EU should boost EU domestic demand for solar so at least 20% of Europe’s electricity demand is powered by solar energy by 2030. It will drive the competitiveness of the EU PV supply chain, and therefore job creation and value creation in Europe: • Set ambitious targets for the deployment of rooftop installations in Europe, to reach at least30 million solar roofs by 2030. • Accelerate the deployment of utility-scale solar in Europe. • Boost the market uptake of innovative solar technologies developed in Europe such as Building Integrated PV and floating solar. • Explore the contribution of solar energy beyond the power sector, through solar-based sector coupling. • To secure a globally competitive PV supply chain in Europe, policymakers should provide an attractive business environment, and develop top runner investment programs for large-scale manufacturing facilities in cutting-edge solar technologies. • The European Union should re-open negotiations on the Environmental Goods Agreement and work with international partners to eliminate trade barriers on green goods, and support European solar companies POLICYin accessing new markets. 1 GLOBAL ENERGY SYSTEM BASED ON 100% RENEWABLE ENERGY Energy 2 SolarPower Europe – E&Y Solar PV Jobs and Value Added in Europe, Transition in Europe Across Power, Heat, Transport and Desalination November 2017. Sectors – LUT university, December 2018. SolarPower Europe / AN INDUSTRIAL STRATEGY FOR SOLAR IN EUROPE / 3 TABLE OF CONTENTS FOREWORD: THE SOLAR VALUE CHAIN, A UNIQUE OPPORTUNITY FOR EUROPE 3 1 BOOST EU DOMESTIC DEMAND FOR SOLAR: AT LEAST 20% OF EUROPE’S ELECTRICITY DEMAND SHOULD BE POWERED BY SOLAR BY 2030 5 2 IMPROVING THE BUSINESS ENVIRONMENT FOR A COMPETITIVE SOLAR INDUSTRY 10 3 A STRONG INNOVATION FRAMEWORK FOR CUTTING-EDGE SOLAR TECHNOLOGIES 15 4 REMOVE ALL TRADE BARRIERS IN EUROPE AND IN THIRD COUNTRIES 17 SolarPower Europe would like to extend a special thanks to all the Industrial Competitiveness Task Force members and companies who contributed with their knowledge and experience to this report. In particular we would like to thank: Our Chair and Vice-chairs: Wacker Chemie AG, Enel Green Power Spa, Fronius. Our Task Force members: ABB, Akuo Energy, ALECTRIS, Applied Materials GmbH & Co. KG, Autarco, AZUR SPACE Solar Power, BayWa RE, Becquerel Institute, Borealis, Coveme , DNV GL Energy, DSM Advanced Surfaces, Eni Spa, EUROBA, First Solar, glass2energy, GOLDBECK Solar GmbH, H.Glass, Heraeus Precious Metals GmbH, HUAWEI, Ideematec , IKEA Services, INES, Innogy SE, ISRA SOLAR VISION, Merck KGaA, Schenker AG, Meyer Burger, Schneider, Siemens, SMA Solar Technology AG, Solarcentury, Solarwatt Gmbh, Solibro Hi Tech, Solnet Green Energy Oy, Sonnen GmbH, Tecnalia, TENERGIE DEVELOPPEMENT, Total, Ubik Solutions, VON ARDENNE GmbH, Wartsila Corporation, Weidmueller, WIP, and SolarPower Europe staff. Task Force coordinator and lead author of report: Aurélie Beauvais, Policy Director, SolarPower Europe. Email [email protected] The SolarPower Europe Industrial Competitiveness Task Force started its work in April 2017 and has worked actively since to shape a business-friendly environment for the solar industry in Europe. This report was originally published on 18th of March 2019. Please get in touch with SolarPower Europe if you have any comments or feedback on the report and its content in order to enrich our ongoing work in this field. If you would like more information on the contents of this report or on the work of SolarPower Europe please contact [email protected] or call +3227095520. Design: Onehemisphere, Sweden. Disclaimer: This report has been prepared by SolarPower Europe. It is being furnished to the recipients for general information purposes only. Nothing in it should be interpreted as an offer or recommendation of any products, services or financial products. This report does not constitute investment, legal, tax or any other advice. Recipients should consult with their own financial, legal, tax or other advisors as needed. This report is based on sources believed to be accurate. However, SolarPower Europe does not warrant the accuracy or completeness of any information contained in this report. SolarPower Europe assumes no obligation to update any information contained herein. SolarPower Europe will not be held liable for any direct or indirect damage incurred by the use of the information provided. 4 / SolarPower Europe / AN INDUSTRIAL STRATEGY FOR SOLAR IN EUROPE 1 BOOST EU DOMESTIC DEMAND FOR SOLAR © MEP SOLAR Gmbh A. Delivering on the clean energy package for an ambitious solar Boost EU domestic demand in Europe demand for solar: A strong industrial value chain requires a predictable line of sight on the at least 20% of evolution and scale of the market. The products being manufactured and Europe’s electricity sold on the European market should be competitive globally and capable demand should be of anticipating their local market’s long-term demand, independently of powered by solar short-term trade & regulatory measures. by 2030 The European Union should therefore support its solar industry in expanding and generating economies of scale by increasing the European market’s domestic demand for solar energy and helping the solar industry to access and grow in foreign markets. Such an increase in demand should be predictable and stable year on year: one-off demand for multiple GW in certain markets is not enough to lay the foundations of an industrial policy. Working towards and delivering on a European binding target of at least 32% renewable energy by 2030, combined with the expiry of the Minimum Import Price (MIP) and trade duties on modules and cells from Asia, will help reinvigorate the European solar sector and boost demand. Increasing numbers of solar installations will support companies manufacturing in the EU along the solar value chain through increased demand for their products.3 To deliver on these opportunities, it will be critical to design a strong “Union renewable energy financing mechanism” (Art 33 Governance Regulation), which will ensure the 32% target at EU level is met. Other provisions put forward by the Clean Energy Package will be paramount to ensure the growth of the solar sector in Europe: • The ban of retroactive measures for renewable support schemes in Europe will be key to provide solar investors with the necessary predictability for ambitious investment plans in the long term, and to benefit from attractive capital costs. Evidence has shown that a stable regulatory environment leads to Weighted Average Cost of Capital (WACC) of around 3-4%, as is the case of the UK or Germany, whereas in countries which