SolarPower Europe says German solar trade tariffs "not the solution" to price drops

The German government is considering the possibility of erecting trade barriers on solar modules and parts imported from China, a move that has caused concern to trade body SolarPower Europe.

The concept of trade barriers, while considering subsidies and state aid, comes after the European Solar Energy Manufacturing Council (ESMC) issued an open letter calling on the EU to protect European manufacturers from "deliberate attacks on Chinese photovoltaics," Reuters reported. The "manufacturers" undercut European prices and forced them down in the form of an influx of cheap products.

Representative trade body SolarPower Europe has also called for measures to protect the price of solar photovoltaic power, which it said has fallen by 25% in recent months, posing "concrete risks" to European manufacturers.

Germany is the first European country to formally study protectionist measures for solar manufacturing.

In response to its statement, SolarPower Europe said: "Trade barriers are not the solution. History shows that investigating and enforcing solar trade barriers is ultimately a lose-lose strategy for Europe."

Instead, it calls for measures to reward and incentivize solar manufacturing. Specifically:

“Adjustment of the EU State Aid Framework (Temporary Crisis and Transition Framework) to allow member states to support the operating costs of plants, i.e. opex

Allowing for specific flex auctions within member states under rapidly passing EU Net Zero Industry Bill

Establishing EU-level financing instruments, such as the Solar Manufacturing Bank, specifically for solar PV produced in Europe”.

“We need solar supply chains that are diverse, sustainable and resilient,” said Aristotelis Chantavas, President of SolarPower Europe. “Trade barriers are not the way to do this. We urge EU leaders to develop and implement an agreement with the U.S. IRA The same clear and ambitious solar industry strategy. Balanced and effective measures are ready.”

Gunter Erfurt, Board Director of SolarPower Europe, added: “We must incentivize solar installations originating from European solar production, rather than sanctioning the entire industry through tariffs. This way, solar deployment can continue without disruption, while European solar manufacturing can Steady growth."

Whether European manufacturing will revive remains to be seen. The US's Inflation Reduction Act (IRA) provides meaningful incentives for businesses to set up shop stateside, while the EU's Green New Deal plans have yet to reach the same level.