European warehouses stockpiling ‘€7bn worth’ of Chinese solar panels

Warehouses in Europe are accumulating a substantial stockpile of Chinese-manufactured solar photovoltaic panels, reaching around 40 gigawatts-direct current (GWdc) of capacity – equivalent to the total amount installed across the continent in 2022.

That’s according to a new report by business intelligence firm Rystad Energy, which states that the stored solar panels have an estimated value of about €7bn (c.£6bn) and possess the potential to generate electricity to power approximately 20 million homes annually.

Rystad Energy further predicts that this build-up will continue to grow throughout the year, with a projection of 100 GWdc of solar capacity being in storage by the end of 2023.

The report highlights the surge in Europe’s spending on solar imports, which has nearly quadrupled in the last five years, rising from €5.5bn in 2018 to over €20bn last year.

Notably, the supply source has become increasingly concentrated, with €18.5bn, or 91% of all PV import expenditure, spent on Chinese products due to fluctuating panel prices influencing purchasing decisions.

The dominance of Chinese imports is attributed to China’s control over both the production and processing of polysilicon into PV modules, allowing them to offer competitive prices.

In contrast, European manufacturers faced challenges in 2021 and 2022 due to a critical shortage of solar-grade polysilicon, leading them to increase prices.

As a result, panels made in China cost as little as two-thirds of their European counterparts.

Despite the healthy inventory levels, the report reveals that the first few months of 2023 have seen an increase in imports compared to the previous year.

The trend indicates a recordbreaking year for imports and inventory, with annual imports potentially reaching 120GWdc, surpassing the expected capacity installations of 63 GWdc.

The demand for European solar PV growth has been driven by energy policies and the green transition, particularly since 2022, when the Green Deal Industrial Plan (GDIP), REPowerEU, and the Net Zero Industry Act set ambitious solar PV targets.

Among these goals are the target of achieving 30 GWdc of European manufacturing across the entire value chain by 2025 and ensuring that 40% of installed solar PV is manufactured within the continent by 2030.

However, between 2019 and 2022, locally made modules struggled to keep up with the growth of imported panels.

The data from Rystad Energy show that from 2021 to 2022, the amount of Chinese solar modules imported by European countries increased by 112% to about 87 GWdc, creating a considerable gap of nearly 47 GWdc in 2022 between shipped and installed modules.

Based on the market trends seen in 2023 so far, Rystad Energy expects Chinese imports to grow by 38% annually and reach 120 GWdc.

‘Leaders cannot wait’

Commenting on the report, Marius Mordal Bakke, senior supply chain analyst at Rystad Energy, said: “European countries are desperate to get their hands on affordable solar infrastructure to advance their renewable energy targets, decarbonise, and avoid paying elevated prices for new capacity.

“Although efforts are underway to build a reliable solar supply chain in Europe, the need for panels now means leaders cannot wait until 2025 or later to buy European.”

Image: Fit Ztudio/Shutterstock

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