Industry chiefs say EU policy is driving up the cost of solar PV energy

by Search Gate staff. Published Tue 08 Sep 2015 19:56
Europe's pricing policy has outlived its use
Europe's pricing policy has outlived its use

Europe’s policy on solar PV is artificially increasing the cost of renewable energy, according to industry leaders.

The European Union (EU) Minimum Import Pricing (MIP) for solar PV modules was initially introduced to protect EU solar PV manufacturers in 2015, but sector chiefs say it has now outlived its use and actively makes the import and installation of solar panels in the UK more expensive.

EU ProSun has filed a complaint that may trigger the European Commission to formally investigate extending MIP. It was set to expire at the end of 2015, but if an investigation is launched will be extended for at least the duration of an investigation which could last up to 15 months.

The REA strongly advocates for an end to MIP and for the free trade of green technologies. According to a joint REA and KPMG report, solar modules make up around 50% of the cost of a PV system and therefore any reductions in cost are significant to overall costs. MIP is actively slowing the UK’s transition to a low-carbon energy mix by increasing costs. The UK government should advocate against a further investigation, on behalf of the renewable energy industry.

The intention of MIP was to support EU module manufacturers. It has not had the intended effect. Support for EU ProSun has significantly declined since the introduction of MIP. The only named member of the organisation is module manufacturer Solarworld, with 1.5GW of capacity out of the EU’s estimated 6GW of module manufacturing capacity.

The global average price for solar modules is around €0.40/watt compared to €0.56/watt with MIP. There is now evidence that non-Chinese module manufacturers, such as SolarWorld, are selling below the MIP in Europe.

The UK’s solar industry has been one of the country’s fastest growing industries in a recession economy, growing up to nine times as fast as the economy as a whole and maintaining over 34,000 jobs. It is presently threatened by proposed cuts to the Feed-in Tariff (FiT) of up to 87% by the Department of Energy and Climate Change’s (DECC), which could result in up to 20,000 job losses. The impact of these cuts could be softened by the removal of MIP.

Lauren Cook, a Solar PV Policy Analyst with the REA, said: “Solar costs have fallen rapidly with increased deployment, it has become even more important to reduce costs further in light of the proposed cuts to incentive schemes. Reducing costs will help solar reach grid parity and to continue representing good value for money”

Dr. Nina Skorupska, the REA’s CEO, added: “The UK renewables industry is enduring significant cuts to the Feed-in-tariff and other government support tools. The removal of minimum import pricing by the European Commission would offer some relief and help bring us to cost parity per module with the rest of the world.”

The Solar Trade Association and Solar Power Europe agree that the MIP should end.

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