EU presses countries to rescue drowning solar industry

BRUSSELS — The EU is urging its members to sign a joint declaration pledging to revive the bloc's dying solar industry, a document seen by POLITICO shows — the most concrete signal yet on how Brussels plans to address the perilous situation.

The document from the European Commission, the EU's executive in Brussels, comes as European solar firms warn of an imminent collapse in the face of heavily subsidized Chinese competition and an EU supply glut. Last week, one of Europe's largest solar producers, Meyer Burger, said it would halt module production in Germany this month.

"The current worsening of the situation requires further action," the Commission said in a letter to EU energy ministers, adding it would "take the initiative to coordinate with Member States ... the signature of a declaration committing to take concrete actions to support the EU solar production."

Yet the EU's initiative, which essentially amounts to asking countries to step in, won't fully placate anxious solar firms. For months, the industry has been urging the Commission to spearhead an emergency buyout of inventories and further relax EU subsidy rules.

And while the Commission recently began early-stage talks on options to help producers, it has remained largely silent in public on taking any further steps.

Now, the EU executive is arguing that countries "could commit" to several options to help the solar industry, including setting up state-led project auctions to promote the production of solar panels with "high environmental, innovation and labour standards."

Those measures would de facto favor EU manufacturers over Chinese exporters, whose production processes experts accuse of being tied up with human rights abuses. The suggestion is also largely in line with the bloc's Net Zero Industry Act, a new bill that aims to boost EU-based production of clean technologies. The legislation was agreed to last month but may not be fully implemented for years.

Other options the Commission mentions include favoring EU producers in an accelerated rollout of "agri-photovoltaics" — the simultaneous use of land for both solar panels and agriculture — and rooftop solar panels on public buildings. It also encourages countries to make use of relaxed rules on state aid for local firms.

The Commission said it would "explore how to further exploit available financial instruments to leverage private finance" on solar production and continue work on boosting jobs in the sector.

"Taken together, these actions can contribute to invert the current negative cycle for the sector and give positive signals for further investment in Europe," the letter reads.

While the initiative represents an "important step," said Johan Lindahl, secretary general of the European Solar Manufacturing Council, "when it comes it concrete actions, we are missing specific and particular solutions for the situation currently."

To keep the sector alive, argued Dries Acke, policy director at the SolarPower Europe lobby, the Commission "needs to become more concrete very soon" with plans to unlock EU cash.

EU energy ministers are set to discuss the Commission's request at a meeting in Brussels on Monday. The Commission suggests they then sign a declaration in "one of" their meetings in the coming months.