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Solar power module production in Europe can become economically viable again, study finds

The production of solar power modules in Europe can be made economically viable again if production sites are planned sufficiently large, a study by research institute Fraunhofer ISE and commissioned by German mechanical engineering association VDMA has found. After a boom period for solar power module producers in Germany that ended around 2010, production almost entirely moved to China due to much lower costs. According to the study, however, production could be relocated to Europe if the annual production capacity reaches at least 5 gigawatts, which corresponds to an investment of about one billion euros, VDMA said. Due to the fact that most production today takes place in East Asia, “a new dependency is emerging for Germany and Europe, although the technological competence is available here”, said Jutta Trube, VDMA‘s solar power production head. A solar power module for the European market could now be manufactured at competitive costs in Europe, partly because transport costs would be much lower. The cheapest option would be to establish the entire module production chain in a European country with low labour costs, the study found.

Solar power plays an important role in Germany’s plan to increase the share of renewables in power consumption from about 38 percent in 2018 to 65 percent by 2030. The costs for solar power have fallen substantially in the past few years, not least because of the high volumes produced for the subsidised German market, and solar has now become the cheapest form of power production in many countries around the world. Due to strong competition from China, many German solar power pioneers went bankrupt over the last decade and the lifting of EU tariffs on Chinese panels has fuelled fears that this might be the last straw for the European solar power industry.

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