SolarPower Europe Study Suggests How to Reshore Solar Production in Europe

Europe’s solar industry might actually have a fighting chance against Chinese dominance if policymakers get their act together, according to a new study that breaks down exactly what it would take to bring solar manufacturing back home. SolarPower Europe and Fraunhofer ISE crunched the numbers and found that European-made solar modules cost about 10.3 cents per watt more than Chinese imports, which sounds terrible until you realize that’s only a 14.5% price difference for the final electricity generated. 

The cost breakdown published in the study reveals where Europe is getting crushed in manufacturing. Labor costs are 280% higher than China, building facilities cost 110% more, equipment runs 40% higher, and even materials are 50% more expensive. Those numbers add up fast, pushing European solar installations to around 60.8 cents per watt compared to 50 cents for Chinese systems, but the gap isn’t insurmountable like everyone assumed. 

What’s encouraging is that European products already fall within the 15% cost threshold allowed under the Net-Zero Industry Act auction rules, meaning they’re competitive enough to qualify for government procurement programs. The NZIA requires member states to apply non-price criteria to at least 30% of renewable energy auctions starting in 2026, which could give European manufacturers a real foothold in their home market. 

The study shows that with the right policy mix combining capital expenditure support, operational subsidies, and output-based schemes similar to what worked in the U.S. and India, Europe could cut that cost gap to below 10%. The key is getting solar factories up to 3-5 gigawatts of capacity, which requires serious scale that most current European operations haven’t achieved yet. 

SolarPower Europe CEO Walburga Hemetsberger argues that Europe could deliver 30 gigawatts of solar manufacturing capacity by 2030, creating thousands of jobs while building supply chain resilience that keeps economic value from flowing to China. 

But she’s also warning that without swift action, Europe risks losing whatever industrial and technological capabilities it has left in the solar sector. The financial commitment needed is substantial but not crazy; between 1.4 and 5.2 billion euros ($1.63-$6bn) annually to hit that 30-gigawatt target. 

The study suggests up to 39% of those costs could be recovered through macroeconomic benefits like job creation and tax revenues, with each gigawatt of annual production capacity supporting about 2,700 jobs and generating 66.4 million euros ($77.5 million) in tax and social revenues. 

The recommendations focus on practical policy tools rather than wishful thinking. Establishing EU-level output-based support schemes that combine grants, loans, and risk reduction instruments could cover both startup costs and ongoing operations. Implementing “Made-in-EU” bonus points in rooftop programs and public procurement would create guaranteed demand for domestic production. 

Whether Europe seizes this opportunity depends on how seriously policymakers take the challenge of rebuilding an industry they’ve essentially given up to China over the past decade. As the continent gets its act together, many North American companies like PowerBank Corporation (NASDAQ: SUUN) (Cboe CA: SUNN) (FRA: 103) will be exploring the opportunities in the European market and taking any low-hanging fruits available. 

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