EU solar modules: up to €5.2 billion a year needed to relaunch

Between €1.4 and €5.2 billion in public resources per year will be needed to relaunch solar module production in Europe, the heart of the entire photovoltaic value chain. This would enable the target of 30 GW of capacity by 2030. This is the estimate of a new study by SolarPower Europe and the Fraunhofer Institute for Solar Energy Systems (ISE) , which estimates that the expected benefits could be significant: up to 2,700 jobs and €66.4 million in tax and social security revenues annually for each GWp produced on the continent.

The report "Reshoring Solar Module Manufacturing To Europe" shows that the cost gap between European and Chinese modules can be reduced to below 10% with targeted policies: subsidies, incentives, and de-risking tools, i.e., funds made available by European institutions and national governments to support investments (Capex and Opex) in the supply chain. Without them, the Net-Zero Industry Act (NZIA) risks merely diversifying imports without truly reviving domestic production. Today, the price difference remains significant: between 2.2 and 5.8 euro cents per peak watt (€/Wp) between NZIA-compliant modules manufactured in Europe and equivalent modules from non-EU countries.

Adopted in 2024 and implemented with the new implementing rules approved by the European Commission in May 2025, the NZIA is the law that aims to bring clean technology manufacturing back to Europe. Its novelty is the introduction of non-price criteria in renewable energy auctions: starting in 2026, at least 30% of the capacity put up for tender (equivalent to 6 GW per year) must also be evaluated based on supply chain resilience, sustainability, and innovation , and not just on the lowest price. Until now, auctions have rewarded only the most cost-competitive producers, strengthening Asian supremacy. The NZIA opens the possibility of developing an industrial policy that brings part of the solar supply chain back to Europe.

According to the study, producing a module with European cells costs an average of 10.3 cents per Wp more than in China. The largest costs are equipment (+40%), buildings (+110%), labor (+280%), and materials (+50%). This results in an average cost of 60.8 cents per Wp for a European utility-scale plant, compared to 50.0 cents per Wp for a Chinese one. This gap is reflected in the LCOE (Levelized Cost of Electricity) , which is 14.5% higher in Europe. The LCOE measures the cost of energy produced by a plant over its entire useful life , including investments, maintenance, and financing. A higher value reduces competitiveness, making it more difficult to attract capital and develop new projects.

One encouraging fact, however, is that European modules already meet the 15% additional cost threshold allowed by the NZIA for incentives. This means that, with adequate support mechanisms, they can compete in European auctions. "With the right policies, Europe can competitively produce 30 GW of solar modules by 2030," said Walburga Hemetsberger , CEO of SolarPower Europe. "But we need to act now: without action, we risk losing the latest industrial and technological expertise in solar."

The challenge is twofold: supporting a European supply chain that currently faces higher costs and transforming the NZIA into a lever for industrial policy. The regulation offers a unique opportunity to reduce dependence on China and ensure technological autonomy. From 2026, it will be up to Member States to effectively apply the new criteria in auctions and transform this legislative framework into a concrete strategy.