From 2030, All New Homes Must Install Rooftop PV

Against the backdrop of the global efforts to promote energy transformation and address climate change, the photovoltaic industry, as an important force in the field of renewable energy, is experiencing an unprecedented wave of development. However, a series of recent EU policy initiatives targeting the photovoltaic industry have attracted widespread attention and in-depth discussion. The EU has adopted the European Solar Charter, which not only strongly supports the local photovoltaic industry, but also puts pressure on imported photovoltaic modules through carbon tariffs and other means. This series of policy combinations has profoundly affected the global photovoltaic industry landscape.

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Mandatory installation of PV in new residential buildings

The European Solar Charter clearly requires that from 2030, all new residential buildings must install rooftop PV. This move aims to create a stable and continuously growing market space for the local photovoltaic industry from the demand side. Through policy enforcement, the EU hopes to widely popularize photovoltaic applications in the residential sector, increase the proportion of renewable energy in residential electricity consumption, and thereby reduce dependence on traditional energy, helping to achieve its climate neutrality goals. From a market perspective, this regulation means that in the next few years, there will be a large-scale demand for new residential photovoltaic installations within the EU. Local photovoltaic companies are expected to take advantage of this opportunity to expand production scale, achieve economies of scale, reduce production costs, and enhance their competitiveness in the global market. ​

Local component subsidy incentives​

The EU provides a preferential policy of 0.03 euros per kilowatt-hour electricity price subsidy for local components that meet its environmental standards. This subsidy should not be underestimated. It directly reduces the electricity costs of users using local components and improves the cost-effectiveness of local components in the market, thereby enhancing the competitiveness of local components in the EU internal market. For local photovoltaic companies, the subsidy policy not only helps to increase product sales, but also brings additional capital inflows to companies, which can be used for R&D investment, technology upgrades, and capacity expansion, further consolidating the position of local companies in the industrial chain. For example, some companies that focus on the research and development of advanced photovoltaic technologies can use subsidy funds to increase research on high-efficiency battery technology, new photovoltaic materials, etc., and promote the innovative development of local photovoltaic technologies.​

The minimum import price of Chinese components is set

The EU has set a minimum import price of no less than 0.18 euros/W for single-sided components of Chinese components. This move is obviously protectionist and aims to limit the influx of low-priced and high-quality photovoltaic components from China into the EU market, which will have an impact on the local photovoltaic industry. For a long time, China has occupied an important position in the global photovoltaic market with its complete industrial chain, large-scale production and advanced technology, and its products are known for their high cost performance. The EU's move is undoubtedly an attempt to weaken the competitive advantage of Chinese components in terms of price through price thresholds and leave market space for local companies. However, this approach may lead to changes in the price structure of the photovoltaic market within the EU, and consumers will face higher costs when choosing photovoltaic components, which may suppress some market demand. ​

The impact of carbon tariff surcharges

The introduction of carbon tariff surcharges, that is, imported components with carbon emissions exceeding 400kg CO₂/kW are subject to a tariff of 0.05 euros/W. This policy has further increased the cost of Chinese photovoltaic components entering the EU market. Although China's photovoltaic industry has achieved remarkable results in technological progress and energy conservation and emission reduction, due to the large scale of the industry, carbon emissions in some links are still difficult to reach the lower standards set by the EU in the short term. The imposition of carbon tariff surcharges has greatly reduced the price competitiveness of Chinese photovoltaic companies in the EU market. In order to cope with this situation, Chinese companies have to consider reducing carbon emissions through technological upgrades, optimizing production processes, increasing the proportion of green energy use, or choosing to invest in factories in areas surrounding the EU to avoid carbon tariffs. But either way will increase the operating costs and investment risks of companies. ​

Challenges of a unified carbon labeling system for photovoltaic products​

The EU plans to establish a unified carbon labeling system for photovoltaic products by 2030 to strengthen supply chain transparency. This system requires companies to clearly mark carbon emission information throughout the product life cycle, from raw material procurement, production and manufacturing, transportation and sales to final use and recycling. For Chinese photovoltaic companies, this means that more manpower, material and financial resources need to be invested in carbon emission monitoring, data collection and collation, and carbon label certification. At the same time, since the EU has the leading power in the formulation of carbon labeling standards, Chinese companies may face problems such as inadaptability to standards and difficulty in certification, which will further increase the threshold for Chinese photovoltaic products to enter the EU market and have a profound impact on the Sino-EU photovoltaic trade pattern. ​

Energy security and independent control considerations ​

The EU actively promotes the development of the local photovoltaic industry, with profound energy security and independent control needs behind it. For a long time, the EU has been highly dependent on external energy supply, and fluctuations in the international energy market often have an impact on the EU's economic and social stability. By vigorously supporting the local photovoltaic industry, the EU hopes to increase energy self-sufficiency, reduce dependence on imported fossil energy, and enhance the stability and security of energy supply. Against the background of complex and changing international political and economic situations, the strategic significance of mastering energy autonomy and controllability for the EU has become increasingly prominent. Developing the local photovoltaic industry and realizing the localization of energy production can reduce the risk of energy supply interruption caused by geopolitical conflicts, trade frictions and other factors, and ensure the sustainable development of the EU's economy and society. ​

Green industry development and job creation ​

As a representative of green industries, the photovoltaic industry has the characteristics of a long industrial chain and strong driving force. The EU has promoted the development of the local photovoltaic industry through a series of policies, which can not only promote the proportion of renewable energy in the energy structure and help achieve climate goals, but also drive the coordinated development of upstream and downstream related industries and create a large number of employment opportunities. From the upstream polysilicon production and photovoltaic equipment manufacturing to the midstream battery cell and component production, and then to the downstream photovoltaic power station construction, operation and maintenance, a large number of professional talents and labor are needed. The development of the local photovoltaic industry can create jobs for the EU in various links from research and development, production to sales and services, alleviate employment pressure, promote economic growth, and achieve a benign interaction between economic development and environmental protection. ​

Trade protectionism tendency​

It is undeniable that the EU's protection policy for the local photovoltaic industry and the pressure of carbon tariffs on imported components have a certain trade protectionism tendency. Against the background of increasingly fierce competition in the global photovoltaic industry, the market share of local photovoltaic companies in the EU has been squeezed when facing strong competition from China and other countries. In order to protect the interests of local companies and maintain the survival and development of the local photovoltaic industry, the EU has adopted a series of trade protection measures. However, this trade protectionism approach may trigger trade disputes, undermine the market environment of fair competition in the global photovoltaic industry, and hinder the healthy development of the global photovoltaic industry. In the long run, opening up the market, strengthening international cooperation, and jointly promoting technological progress and cost reduction are the correct ways to achieve sustainable development of the global photovoltaic industry. ​

Response Strategies Of All Parties And Future Prospects ​

Response strategies of Chinese photovoltaic enterprises ​

Faced with the policy pressure from the EU, Chinese photovoltaic enterprises need to take active countermeasures. On the one hand, continue to increase investment in technological innovation, improve production processes, reduce product carbon emissions, and strive to meet the EU's carbon tariff standards and carbon labeling system requirements. For example, in the silicon material production link, improve production technology, improve energy efficiency, and reduce carbon emissions per unit product; in the component manufacturing link, adopt new environmentally friendly materials and production processes to reduce pollutant emissions in the production process. On the other hand, optimize the global industrial layout, consider investing in and building factories in countries or regions surrounding the EU, and use local resources and policy advantages to produce photovoltaic products that meet EU standards and avoid carbon tariffs and trade barriers. At the same time, strengthen cooperation with local EU companies, achieve mutual benefit and win-win results through technology exports, joint ventures, etc., and jointly explore the EU market.

Potential changes in the EU internal market ​

With the gradual implementation of the EU photovoltaic policy, a series of changes will occur in the EU internal photovoltaic market. In the short term, due to local component subsidies and import restriction policies, the market share of local photovoltaic companies is expected to increase, and product prices may fluctuate to a certain extent. When choosing photovoltaic products, consumers may tend to choose local components due to price factors and policy guidance. However, in the long run, if local companies cannot effectively improve their technical level and production efficiency and reduce product costs, excessively high product prices may suppress market demand and affect the further popularization and development of the photovoltaic industry. In addition, there are differences in the development needs and policy implementation strength of the photovoltaic industry in different countries within the EU, which may lead to unbalanced market development, and the EU needs to play a greater role in policy coordination and resource allocation. ​

Reshaping of the global photovoltaic industry pattern​

The EU's photovoltaic policy adjustment will have a profound impact on the global photovoltaic industry pattern. On the one hand, it may prompt other countries and regions to follow suit and introduce similar industrial protection policies and carbon tariff measures, exacerbating trade frictions and market segmentation in the global photovoltaic industry. On the other hand, it will also promote global photovoltaic companies to accelerate the pace of technological innovation and industrial upgrading to cope with increasingly stringent environmental protection standards and trade barriers. In this process, companies with technological advantages, cost advantages and global layout advantages will be more competitive, and the global photovoltaic industry pattern is expected to be reshaped in competition and cooperation. For example, some companies that have made breakthroughs in the research and development of emerging photovoltaic technologies may take advantage of their technological leadership to occupy a larger share of the global market; and some companies that can effectively integrate global resources and build a complete industrial chain will also stand out in the market competition. ​

The EU's local protection policies and carbon tariff pressure measures implemented through the European Solar Charter have had a broad and profound impact on the global photovoltaic industry. Behind this series of policies are both reasonable demands such as energy security and industrial development, as well as trade protectionism.

Against the backdrop of global economic integration and addressing climate change, all parties should uphold the concepts of openness, cooperation and win-win, and jointly respond to challenges by strengthening international cooperation, promoting technological innovation, and improving the global governance system, so as to achieve sustainable development of the global photovoltaic industry and contribute to the realization of global energy transformation and climate goals.