Update – EU renewables manufacturing – Terminal decline or simple shake-out?

Below is a great link to a recent article in the European Energy Review which reinforces the points made in my original blog posting.  The Author, Craig Morris, provides clear examples of how Germany continues to benefit from its domestic solar boom, despite the fact that most of the panels are now being made in China.

The case is neatly summed up as follows:

“The public eye may focus on the middle of the value chain – [manufacturing] panels – but Germany clearly reaps benefits all up and down it.

And below is the killer graphic:

Figure 1: Domestic and foreign content of solar rooftop system in Germany, 2010 and 2012 (c) Data from Solarpraxis and own research. Created by Petite Planète. Design by HBF.In 2010, a rooftop array in Germany with an installed price of 2,900 euros per kW would have had nearly 50% domestic content even with panels imported from China – assuming that all other components and services were domestic. Now, that figure is likely to be closer to 60% (estimate as costs vary from one array to another).

The article’s facts are illuminating and include:

“Germany need not worry about domestic content anyway. Even if the country uses imported panels, more than 50 percent of the array’s value can still be domestic. Back in 2010, a rooftop solar array would have cost around 2,900 euros per kilowatt in Germany. Berlin’s Solarpraxis broke down the figures as shown in the chart above. Here, cabling, the installation substructure, and the inverter (BOS components) would probably be made locally, so nearly half of the system’s value would be domestic even if the panels are from China. Today, panels from China cost closer to 700 euros per kilowatt, whereas the other prices have not dropped as much. Asa result, the share of domestic content continues to increase as (imported) panels make up than ever smaller share of the installed price.” 

Craig also makes clear the extent to which the failure of a number of solar firms in Germany and the States is not simply about competition from China but more about the degree of general overproduction that has been seen in recent years: “The problem globally is that production capacity (estimated at around 60 gigawatts) far outstrips demand, with less than 29 gigawatts installed in 2011”

However, he ends with a confident prediction that: “The future is bright indeed for solar firms that can survive the current consolidation phase”




The original post is below and at this link:


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