Thread by @andreasgraf

EU tariffs on solar panels and cells from China that have been in place since 2013 end tomorrow 3 September. Global prices are in free-fall. What does it mean for the development of Solar PV in Europe? 1/17

https://twitter.com/andreasgraf/status/1035169745077714946

First, it is important to note how much the cost of solar panels has already come down since the beginning of the year. Quite a bit! According to the pvexchange price index for the European market between 11-21% since January depending on the module type (as of 29.8). 2/17

While the EU trade measures have been gradually phasing down since 2017, these costs declines are only to a limited extent explainable by these regulatory changes. Other factors in the global market for PV modules have played a much bigger role. 3/17
pv-magazine.com/2018/06/21/glo…

In particular regulatory developments on the Chinese market. 4/17
chinadialogue.net/article/show/s…

Put very simply, global supply/production for solar modules currently exceeds demand, making it a buyers market globally, and especially in Europe. 5/17

While it is unclear how exactly the market will react to the the phase-out of EU trade measures against China, in the short-run they should further reinforce these price developments on the European market, i.e. module prices in Europe should get even cheaper. 6/17

Solar module costs are not the only cost to developing solar projects, which also include other hardware, installation and soft costs. But they are an important part: roughly two-fifths to one-third. 7/17

As a result the cost of developing solar projects in Europe should also get cheaper, both for utility-scale solar, as well as for small-scale commercial and residential rooftop PV projects. 7/17

Two studies performed in the last year provide an initial indication what scale of impact these price developments could have. 8/17

Modelling for a 2017 Study for the Commission’s DG Justice and Consumers found that relaxing trade measures would increase the investment rate in the solar industry and result in a 20-30% increase in installed solar photovoltaic capacity by 2030. 9/17
ec.europa.eu/commission/sit…

For example, residential PV is expected to see considerable growth compared to a baseline in nearly all EU Member States. And this is after using fairly conservative CAPEX cost assumptions until 2030, let alone for the last months. 10/17

On the job front, a seperate study by EY for Solar Power Europe “Solar PV: Jobs & Value Added in Europe” finds that removing the anti-dumping measures would bring as many as 45,000 additional jobs to the solar industry throughout the EU. 11/17
ey.com/Publication/vw…

This will still have to be seen. But already in the short-run it should have a positive effect on the market. First, it should enhance the profitability of recent low solar PV auctions in Germany and other European markets, enhancing realization rates at low cost. 12/17

Second, it should support the continued trend of lower Solar PV auction results. Germany's upcoming auction on 1 October should provide a first indication of whether this holds. 13/17 bundesnetzagentur.de/DE/Sachgebiete…

A more interesting question is whether ever declining auction results and high realisation rates will also entice policy-makers to increase solar PV auction volumes in Europe in the near term - as would be required by recently raised EU renewables targets for 2030. 14/17

Concerning residential rooftop PV projects, further module cost declines should (ceteris paribus) indeed move forward the tipping point at which grid-parity is reached in different markets and fuel the development of decentralized solar. 15/17

But an acceleration could also lead to the introduction of regulatory barriers by conservative utilities and regulators that are disinclined to support decentralized renewables generation. 16/17

Whichever way the wind blows (or the sun shines in this case) this will be an important and exciting space to watch in the coming months. 17/17

Update: Here are some first numbers being put out by analysts on the impact of this trade decision - EU module prices to decline by 30%. Multi prices to hit about 24 US cents by the end of the year. 2019 PV demand up 40%. 12 GW in 2018 and 17 GW in 2019.
pv-magazine.com/2018/09/03/mip…

"Following the discontinuation of MIPs, a new price war will entail. In particular, solar cells originating from China will create direct competition with those originating from Taiwan." “SE Asia manufacturing capacity will lose its competitive advantage on the European market."

“In particular the developers of large utility-scale projects under development in Southern Europe, both under government programs and with private PPAs, will benefit from the increased competition among suppliers."