As European governments prepare to offer support to their solar power manufacturers, some firms have already taken decisive action, with solar panel maker Meyer Burger relocating its production from a German factory to the United States. The closure of the plant in Freiberg, Germany, in mid-March resulted in the loss of 500 jobs, as the Swiss-listed firm became one of several European renewable energy manufacturing factories facing financial difficulties.
Despite a surge in wind and solar energy in Europe, European-based manufacturers are struggling to compete with counterparts in China and the US, which receive more substantial government support. The closure of the Freiberg plant has reduced European solar panel production by 10%, highlighting the challenges faced by the industry.
In response to the situation, European governments are confronted with a dilemma: whether to bolster local production to maintain competitiveness or allow increased imports to sustain the pace of installations. A meeting in Brussels between European energy ministers is set to address the plight of the struggling industry.
Meanwhile, China’s dominance in solar manufacturing continues to expand, with the country now accounting for 80% of the world’s solar manufacturing capacity. The cost of producing panels in China is significantly lower than in Europe, further exacerbating the challenges faced by European manufacturers.
In light of US subsidies announced as part of the 2022 Inflation Reduction Act, some European renewable energy manufacturers and project developers are drawn to the US market, with companies like Meyer Burger and battery company Freyr shifting their focus and operations to the United States.
Meyer Burger’s plans include establishing a solar panel factory in Arizona and a solar cell factory in Colorado, while Freyr has redirected its efforts to a plant in the US state of Georgia. These strategic moves reflect the impact of policy decisions on the global renewable energy industry and the shifting landscape of manufacturing operations.