Solar panels are used as fences in Europe – 04/02/2024 – Market

Solar panels have become so cheap that they are being used to build garden fences in the Netherlands and Germany as a boom in Chinese production saturates the global market.

The panels capture less light when used as fences rather than on roofs, but the process saves on high installation costs, according to analysts and social media posts by families who have installed them.

“This is a result of solar panels getting so cheap that we’re just putting them everywhere,” said Jenny Chase, lead solar analyst at BloombergNEF. “Since the installation cost — labor, scaffolding — is the majority of the cost of a rooftop system, it might make sense.”

“Why build a fence when you can just install a bunch of solar panels, even if they’re not exactly aligned with the sun?” says Martin Brough, head of climate research at BNP Paribas Exane. “Where the panels themselves are incredibly cheap, the constraints become installation costs and locations… You get a bit of a do-it-yourself mentality.”

The global supply of solar panels will reach 1,100 gigawatts by the end of this year, or three times the current demand forecast, the International Energy Agency estimates. A glut of manufacturing in China is driving this trend.

At the same time, installations have become more expensive, mainly due to rising labor costs, and the wait for panels to be connected to power grids is testing the patience of the industry and homeowners. Network capacity issues affect most countries and cannot be resolved quickly.

Longi Green Energy Technology, one of the world’s largest panel producers, recently said it laid off thousands of factory workers as oversupply caused Chinese manufacturers to pull out.

In Europe, executives are warning of looming problems in a sector that has been beset by job losses, bankruptcies and closures in recent months.

The European Commission says it will commit to “assessing all evidence of alleged unfair practices” and improving solar panel manufacturers’ access to EU funds, according to a draft plan seen by the Financial Times, and is expected to be signed off by EU ministers. EU energy and industry groups on April 15. But that probably won’t satisfy the industry.

Alessandro Barin, chief executive of Italy’s FuturaSun, which makes panels in China to sell in Europe, said boxes of panels were sitting at ports and warehouses even after a factory closure that extended the production pause for the Lunar New Year holiday for three weeks instead of a normal week.

A solar panel cost 11 cents per watt at the end of March, just half what it was at the same time last year, according to BloombergNEF, and is expected to fall further in a “race to the bottom” at as manufacturers competed to get rid of excess supply.

Below a “red line” of 15 cents per watt, it would not be possible for the company to seriously invest in European manufacturing, Barin said. “You’re not going to do it with a crazy small margin that won’t pay for anything.”

Without more EU support, a factory Barin plans to open near Venice will be a small “megawatt” producer rather than a globally significant “gigawatt” producer, he said.

The European Council of Solar Energy Manufacturers warned in February that Europe’s panel manufacturers would soon begin to close if no emergency assistance was provided.

French solar panel maker Systovi said it is looking for buyers, citing “a sudden acceleration in Chinese dumping.” French energy company EDF told the FT that its solar panel producer, Photowatt, “faces difficulties in finding economic balance”.=

This follows the closure by the REC group in Norway in November of its factory producing polysilicon, a key raw material in solar panels, and Switzerland’s Meyer Burger Technology saying it would close a solar panel factory in Germany, one of the largest in Europe. , and would concentrate efforts in the USA.

Even in the US, where solar power parts manufacturers have access to subsidies under the US$369 billion “Inflation Reduction Act”, the local industry is in decline. Imports from Southeast Asia, where the U.S. gets most of its solar panels, are sold at a discount to those made in the U.S., even taking tariffs into account.

This creates difficulties for companies including Bill Gates-backed Cubic PV, which in February canceled plans to build an 8GW factory announced shortly after the signing of the IRA in 2022, citing a “dramatic collapse” in prices.

“The climate is bleak… It doesn’t create conditions for domestic manufacturers to succeed, especially in this fragile early phase of growth,” said Danielle Merfeld, chief technology officer at Hanwha Q-Cells, one of the largest solar parts manufacturers in the US.

Speaking at a solar factory in Georgia on Wednesday, US Treasury Secretary Janet Yellen pressed China to stop flooding the market with cheap exports of green technology.

But Sumant Sinha, chief executive of ReNew, one of India’s leading suppliers of wind and solar power, complained that the US’ own state aid for solar energy is undermining India’s ambitions to present itself as a producer of low-cost solar panels and an alternative to dependence on Chinese imports.

“Is this huge subsidy the best investment for the world as a whole? It’s not, but it’s happening because the U.S. wants to create its own jobs…globally, climate change is being held hostage.”

For some industry observers and climate change advocates, including the International Energy Agency, the oversupply problems are a consequence of the good news from the remarkable solar boom that came in response to the energy crunch caused by the cut in Russian gas supplies due to to the war in Ukraine.

Rising energy prices have proven to be an incentive for homes to install panels to save on bills and sell green electricity back to the grid.

Ian Rippin, chief executive of MCS, which carries out quality checks on solar installations in the UK, said the ups and downs of the industry’s “solar rollercoaster” are driven by inconsistent government support through refunds or subsidies, and due to the volatility of domestic customers in relation to the cost of installation.