Imports of solar panels from China to the EU surge, 40 GWp in storage

As reported by Rystad Energy, one of the leading energy consultancies operating in Europe, Europe has approximately 40 GWp worth of solar panels originating from China in storage. According to Rystad, stocks of panels with this capacity are worth around EUR 7 billion and would be enough to cover all new installations commissioned last year. The forecast suggests that inventories will continue to rise significantly, which could jeopardise the EU's plans for self-sufficiency in domestic panel production.

Dependence on China is growing, Europe has lagged behind on investment

According to Rystad data, the value of solar panel imports to Europe has almost quadrupled over the past 5 years. In 2018, it was estimated at EUR 5.5 billion; last year, it exceeded EUR 20 billion. Of this, a full EUR 18.5 billion was accounted for by imports from China. In other words, China supplied 9 out of every 10 solar panels imported into Europe.

According to Rystad, China is making full use of its dominant market position in the production and processing of polysilicon, which was in short supply in previous years and whose price consequently rose sharply. Through domestic production and processing, China has also ensured that it can manufacture the end product, namely solar panels, at a lower cost than, for example, its European competitors. It is estimated that China can produce panels for up to a third less, giving local manufacturers and exporters considerable room for manoeuvre on pricing.

As the International Energy Agency (IEA) reports, this situation is not accidental. Since 2011, China has invested around EUR 50 billion across the entire supply chain. This is more than ten times the amount invested in Europe.

Inventories are increasing

As data for the first 5 months of this year show, imports from China have increased year on year and, if the current pace continues, inventories could rise by a further approximately 60 GWp this year. Imports are estimated at 120 GWp, while installations of 63 GWp are projected for this year.

Given the growing inventories, Rystad does not expect a sharp increase in panel prices in the near term – the bottleneck in this case is, for example, the skilled workforce needed to install and commission solar power plants. However, this situation could jeopardise the EU's ambitious plans. These aim for 40 % of installed panels to be locally manufactured from 2030.