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Shining a Light on Solar: Balancing Green Ambitions and Energy Autonomy



The race to European energy independence is well underway. The REPowerEU initiative set out to diversify energy supplies and accelerate the transition to clean energy. Over the past two years, it has achieved a reduction in gas consumption of almost 20%. This is a promising figure, especially given the Russian invasion of Ukraine and the subsequent Nord Stream 2 pipeline sabotage that put gas supply to European powerhouse Germany in jeopardy. While the Union’s plan to reduce dependence on fossil fuel imports is ambitious, particularly with the European Investment Bank pledging €45 billion to green investments until 2027, all eyes now turn to how the post-Russian gas geopolitical strategy will be implemented. The question thus follows: as Europe turns to solar, can it afford to rely on China for its panels?


China’s Dominance in the Solar Industry

Alternative energy sources are increasingly being used to power Europe, with photovoltaic (PV) systems playing a major role in feeding electricity into the grid. 2023 marked a significant turning point for solar power generation. According to Ember, a specialized global energy think tank, installations increased from 199 GW in 2022 to 346 GW in 2023—a record-breaking 147 GW increase. This represents the fastest percentage increase since 2011, with 74% more solar installed in 2023 than in 2022. Overall, solar accounted for over three-quarters of all installed renewable capacity.


Much of this growth is thanks to production capacity in China. In 2023, China accounted for 63% of global solar additions—a record-high percentage. The Chinese have been at the forefront of the global deployment of solar power, helping to drive down the costs of these technologies. This rapid development is supported by government subsidies that enable low prices for solar modules.



In just the first half of 2024, China added over 123 GW to its photovoltaic capacity between January and July, bringing the total up to around 740 GW—a 50% increase, according to the country’s National Energy Administration (NEA). This massive expansion has had a direct impact on the price of solar modules. The International Energy Agency (IEA) reports that prices for PV solar modules fell by nearly 50% in 2023 compared to the previous year. European producers simply cannot compete with these prices, with 90% of necessary products now imported from China. While measures are being taken to address this, reliance on Chinese solar could be seen as replacing one dependency (Russia) with another (China).


Short-Term Solution

Mario Draghi’s all-important EU Competitiveness Report outlines this logic, stating that “increasing reliance on China may offer the cheapest route to meeting the EU’s climate targets.” Essentially, it suggests that it’s better to be reliant on Chinese solar than Russian oil and gas. Solar is cleaner, and unlike fossil fuels, China cannot "turn off the sun"—meaning a supply shock won't affect electricity generation from solar panels already in operation.


The practical and environmental benefits of this approach can already be seen across the continent. In 2023, the EU installed more solar capacity than the entire electricity consumption of Denmark. One of the world’s largest renewable energy companies, China Three Gorges (CTG), now operates solar farms in seven different regions in Spain, with a total solar PV capacity of over 570 MW. For the EU to build a more sustainable future and increase its usage of renewable energy, investments in cheap Chinese solar panels appear indispensable.



Long-Term Strategy for Europe

However, continued imports of PV modules from China pose a serious challenge for EU policymakers. European solar panel manufacturers have reached a point that is “really, really, really troublesome,” according to Johan Lindahl of the European Solar Manufacturing Council (ESMC) in an interview with Politico. The oversupply of cheap Chinese products is driving many developers out of business. In his report, Draghi acknowledges this dilemma, labeling the dependency on Chinese solar as a “threat to otherwise productive industries.” This concern is particularly poignant after Europe’s recent experience with its over-reliance on Russian gas.


To truly achieve energy independence, Europe must reduce its reliance on China. In response, the European Commission drafted the European Solar Charter in April of this year, highlighting long-term threats to the price stability of solar panels and short-term dangers to the resilience of the value chain. For a sustainable and competitive EU photovoltaic sector, several initiatives must be taken by the Commission, EU Member States, and representatives of the solar PV value chain.


However, simply implementing tariffs on Chinese solar panel imports or providing untargeted subsidies to European manufacturers is not the solution. The EU should explore more strategic and forward-thinking measures to enhance resilience. For example, Bruegel, a Brussels-based economic think tank, calls for European governments to mandate large deployers to maintain a strategic stockpile of solar panels equivalent to 30% of their market share, ensuring flexibility in case of supply disruptions from China. Over time, these requirements could be eased as imports diversify, as diversification is more effective than outright substitution.


Additionally, the EU should enhance solar panel recycling efforts, both to reduce environmental impact and secure a future source of the raw materials needed to manufacture panels. These measures could collectively help promote the broader goals of the European Solar Charter, such as increasing the resilient supply of quality solar PV products in Europe and expanding domestic production capacity.


Europe’s Energy Future

As Europe accelerates its transition to renewable energy, it faces a crucial choice between short-term gains and long-term autonomy. On one hand, relying on Chinese solar panels offers a cost-effective and efficient way to meet immediate climate goals, as highlighted by the significant growth in solar capacity across the EU. This allows us to move quickly toward a greener future, reducing reliance on fossil fuels like Russian gas.


However, the dependency on Chinese imports poses risks that cannot be ignored. Relying on a single supplier for such a vital energy source threatens Europe’s strategic independence and puts pressure on domestic solar industries. The EU should therefore consider its long-term energy security by diversifying supply chains and investing in local solar manufacturing.


As the EU stands at this pivotal crossroads, it must ask: Should the urgency of the green transition outweigh the risk of a new reliance, or must energy independence take priority in shaping Europe’s future? This choice will define not only the pace of Europe’s transition to clean energy but also the continent's energy sovereignty in a shifting geopolitical landscape. The path forward may lie in a balanced approach: leveraging China's cost advantage in the short term to accelerate solar adoption, while simultaneously building up Europe’s domestic production capabilities. By doing so, Europe can achieve its renewable energy goals without compromising its autonomy, ensuring a resilient and sustainable energy future.



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