Smarter European Union Industrial Policy for Solar Panels

Delivering sustainable economic growth
Feb 26, 2024 | Bruegel

By 2030, EUcountries aim to reach the target of almost 600 gigawatts ofinstalled solar photovoltaic (PV) capacity set out in the EU’s Solar EnergyStrategy – up from around 263 GW today  Accelerating solardeployment, stockpiling and diversifying imports would mitigate the risk toEuropean economic security from solar PV imports, suggest BenMcWilliams, Simone Tagliapietra and CeciliaTrasi in their Bruegel  policy brief.The European solarrevolution is, at present, and will continue to be, predominantly ‘made inChina’. In 2022, over 95 percent of Europe’s solar panels came from China, which hasestablished itself as the global hub for solar PV manufacturing. In this context, the authors explore the feasibility of European solarPV manufacturing. They evaluate the economic case for European intervention tostimulate domestic manufacturing, finding that there are no cleardecarbonisation or economic growth benefits from doing so, leaving mitigatingthe risk of over-dependence on Chinese imports as the only justification. Eventhis risk should not be exaggerated. Innovation and not domestic content shouldbe the defining criteria for manufacturing subsidies.

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