Solar installations built with modules manufactured in Europe can compete with Chinese imports if the right policies are implemented, according to a new report published by SolarPower Europe in collaboration with the Fraunhofer Institute for Solar Energy Systems (ISE).

The study, titled Reshoring Solar Module Manufacturing to Europe, reveals that producing a solar module in the EU with Europe-made cells currently costs around 10.3 ct €/Wp more than in China. This results in a 14.5% higher Levelised Cost of Electricity (LCOE), with utility-scale projects using European modules reaching 60.8 ct €/Wp compared with 50.0 ct €/Wp for Chinese systems.

Still, the report highlights that EU-made products are already within the 15% cost premium threshold set in the auction rules under the Net-Zero Industry Act (NZIA).

Cost gap and policy requirements

The cost difference is driven by factors such as equipment (+40%), construction and installation (+110%), labour (+280%), and materials (+50%). However, the report stresses that with a combination of CAPEX and OPEX support for manufacturers and developers, and assuming factories reach a 3 to 5 GW capacity, the gap could be reduced to below 10%.

The analysis warns that, without additional measures, NZIA provisions could diversify the solar supply chain without actually strengthening European manufacturers, as a 2.2 to 5.8 ct €/Wp gap remains between EU-made modules that comply with NZIA requirements and imports from outside Europe that also meet the standard.

Economic impact and job creation

Fully reshoring the solar PV value chain to Europe would involve higher upfront costs but deliver significant long-term macroeconomic benefits. According to the study, reaching the 30 GW European solar manufacturing target by 2030 would require between €1.4 and €5.2 billion annually in support. Yet up to 39% of those costs would be offset through benefits such as the creation of up to 2,700 jobs and €66.4 million per GWp/a in annual tax and social revenue.

Call to action for the EU

Walburga Hemetsberger, CEO of SolarPower Europe, stated taht “this new report underlines that with the right policies, Europe can competitively supply 30 GW of solar energy by 2030, creating thousands of local jobs and building a resilient and innovative solar supply chain that retains economic value at national level. To reach the 2030 goal, the EU and Member States must act quickly. Without interventions, Europe risks losing its remaining industrial and technological capabilities in solar energy.”

Report recommendations

The report proposes two main lines of action:

• Establish an EU-wide results-based support plan for solar manufacturing, combining grants, loans, and risk-reduction tools, covering both CAPEX and OPEX.
• Fully implement the NZIA across Member States, including “Made in the EU” bonus points in rooftop support programmes and public procurement processes.

With these measures in place, the study concludes, Europe could secure the competitiveness of its solar industry, strengthen supply chain resilience, and ensure compliance with the EU’s 2030 climate and energy targets.