Electrical Equipment / Components & Telecoms

As a global leader in the photovoltaic industry, China should cooperate with the international community to jointly initiate and formulate relevant regulations to provide strong support for China's international trade in photovoltaic exports to the world.

In the face of the energy crisis caused by geopolitical and extreme climate factors, the European Commission has recently successively formulated plans to launch large-scale construction projects in the photovoltaic field. On October 11th, the European Commission announced on its official website that it had officially approved the establishment of a new solar photovoltaic industry alliance to accelerate the deployment of solar power generation facilities throughout the EU. According to the latest research, due to rising energy prices and increased manufacturing costs, the EU's "ambitious" photovoltaic layout faces the risk of being shelved. On the one hand, the high demand for photovoltaic products in the EU, and on the other hand, the rising local manufacturing costs have once again highlighted the advantages of China's photovoltaic industry in terms of scale and low cost, which also provides a platform for the further development of Chinese photovoltaic international trading enterprises in Europe.

On October 10, President of the European Commission von der Leyen publicly stated at the EU Digital Summit that the EU would accelerate the transformation of renewable and clean energy in order to get rid of dependence on Russian energy as soon as possible. It is reported that the EU has formulated two detailed plans for this. According to Reuters, the draft of the upcoming "energy system digitization plan" in the European Union requires that solar panels will be installed on the roofs of all commercial and public buildings in the EU region by 2027; By 2029, solar panels will also be installed on all new residential buildings in the EU region. In May this year, the EU released an energy plan called "REPowerEU", which also mentioned the layout of photovoltaic facilities in the EU. According to the plan, the cumulative installed capacity of photovoltaic power in the EU will reach 320 gigawatts in 2025 and 600 gigawatts in 2030. It can be seen that in the pursuit of "energy freedom" in the EU, the importance of solar power generation is self-evident.

Wang Yuanfeng, director of the Center for Carbon Neutralization Technology and Strategic Research at Beijing Jiaotong University, said, "Europe is experiencing the 'pain' of the energy crisis, and solar power generation has a significant complementary effect on local energy. In the long run, the current large-scale deployment of solar power generation will also accelerate the transformation of renewable energy in Europe."

However, it is inevitable that the European photovoltaic industry is facing cost pressure. A study by Rystad Energy, an energy consultancy, found that due to the rise in electricity prices, the manufacturing costs of the local photovoltaic industry in Europe have increased significantly, resulting in the risk of about 35 gigawatts of photovoltaic manufacturing projects being shelved. Rystad Energy also stated that due to the increase in operating costs, energy intensive enterprises in the local photovoltaic industry chain have temporarily closed their production lines, which also leads to the risk of failure in financing related projects.

At the same time, China's exports of solar equipment to Europe are "shining brightly.". It is reported that China is currently the largest exporter of photovoltaic modules, and Europe is also the largest export market for photovoltaic modules in China.

According to the data of the China Photovoltaic Industry Association, in the first half of 2022, the total amount of components exported by China's photovoltaic international trade reached 78.6 gigawatts, and the export value of components reached US $22.02 billion, a year-on-year sharp increase of 116.1%, with exports to Europe accounting for more than half of the total. "The advantages of China's photovoltaic industry are increasingly prominent. Compared to Europe, China is more competitive in terms of technology, industry scale, manufacturing costs, and other aspects. Most importantly, China's photovoltaic industry has richer production and practical experience, which will help Chinese international trading companies better enter the European photovoltaic market." Wang Yuanfeng said.

He also proposed that Chinese enterprises should remain vigilant in the face of the blue ocean market. First of all, at the trade level, Chinese international trading enterprises should prepare for possible "anti monopoly" measures and avoid a passive situation. Secondly, at the geopolitical level, there have been voices saying that Europe should not rely on China's photovoltaic industry, otherwise there will be a situation like relying on Russian energy. Therefore, Chinese photovoltaic companies also need to be prepared for the geopolitical impact. In terms of technology, China should also avoid being "stuck" by Europe and the United States. Most importantly, China's photovoltaic industry needs to reduce carbon emissions throughout the entire industrial chain to avoid being "encircled and suppressed" by Europe's possible implementation of "carbon footprint" regulations in the future. As a global leader in the photovoltaic industry, China should cooperate with the international community to jointly initiate and develop relevant regulations to provide strong support for China's photovoltaic exports to the world.