Smarter European Union industrial policy for solar panels
The European Union plans a major increase in solar PV capacity from 263 GW today to almost 600 GW by 2030. If nothing changes, this expansion will be based almost exclusively on solar panels imported from China, which supplies over 95 percent of solar panels used in the EU. This dependence has raised concerns about EU economic security and geopolitical vulnerabilities, especially in light of recent global disruption. The EU has agreed in principle a non-binding 40 percent self-sufficiency benchmark for solar panels and other identified strategic technologies, to be approached or achieved by 2030. However, for the solar sector specifically, there is no strong economic justification for an import-substitution approach. Such a strategy risks increasing the costs of solar panels, slowing deployment and creating industries that are over-reliant on subsidies. EU solar manufacturing subsidies are not appropriate based on criteria of European production alone. Subsidies could, however, be justified on innovation grounds, by supporting new solar products that have a real chance to develop into sustainable industries that contribute to climate goals. To address concerns about short-term dependence, alternative tools should be employed: accelerated solar deployment, strategic stockpiling and gradually diversifying import sources. In the longer term, recycling of solar panels deserves greater attention and funding. In terms of strengthening economic resilience relative to China, Europe should implement an industrial policy that intervenes in sectors that are more likely to contribute to sustainable economic growth and alleviate decarbonisation bottlenecks.
Year of publication: |
2024
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Authors: | McWilliams, Ben ; Tagliapietra, Simone ; Trasi, Cecilia |
Publisher: |
Brussels : Bruegel |
Saved in:
freely available
Series: | Bruegel Policy Brief ; 02/2024 |
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Type of publication: | Book / Working Paper |
Type of publication (narrower categories): | Research Report |
Language: | English |
Other identifiers: | 188584686X [GVK] |
Source: |
Persistent link: https://www.econbiz.de/10014528909
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