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Where do your solar PV panels come from?

Posted by Gabby Mallett on 15 December 2015 at 10:15 am

I could ask a few more questions about this, such as ‘is it more important to you that they are cheap or that they are made in Europe?’, ‘do you worry that Chinese production will mean the closure of EU PV manufacturing plant?’, ‘are you concerned that panels which say made in the UK may just be assembled in the UK from parts made elsewhere?’.

Well the EU government has decided that panels from China should not be imported in the huge numbers which they had been and imposed an import quota and minimum price back in 2013.  This meant that China had to charge a minimum price of €0.56 per watt and a total annual import amount of 7GW.  Some said that this would increase prices by as much as 30%.

This import quota and minimum price should have expired on 7 Dec 2015, which would have allowed more imports from China, and at a lower price.  However, with the UK Government, already smarting from the closure of the Redcar steel works which many blamed on cheap steel imports from China, and no doubt other similar issues across Europe, the European Commission has decided to extend the import tariffs.  In a move, called an Expiry Review, there will now be two reviews to examine whether the tariffs should remain in place.

Paul Barwell, CEO of the Solar Trade Association explained that “these price controls on imports of Chinese solar panels need to be dropped.  Europe is currently paying far more than it should for its solar – and that applies both to our homeowners and our governments.”

Given that the Feed-in Tariff (FiT) for solar PV is likely to be slashed, or potentially dropped altogether in January, it is clear that something will need to change radically in the market place if further job losses are to be avoided.

The economics equation for PV is reasonably simple.  Install a system, at a certain price, and save on electricity costs, at the prevailing price.  With FiTs there was also an added bonus of being paid a subsidy for half of the kWh generated.  Without the FiT PV almost stacks up anyway.  What would make it a simpler equation would be if electricity prices went up, and therefore the saving would be greater, or if prices of the panels came down, which would make the initial install cheaper.  Cheap panels from China may be the best way to achieve the cost reductions we need.

Clearly this isn’t an easy decision to make and potential job losses at EU PV manufacturers (and installers) do need to be considered, but if we are to meet our carbon reductions targets, and keep to the 2oC temperature rises as just promised in Paris, we desperately need to invest in renewables.

Photo: David Gilford

 

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