Press release: ESMC requests EU Member States to allocate REPowerEU financing to PV manufacturing

The European Solar Manufacturing Council (ESMC) is urgently requesting the EU Member States to allocate financial support to PV manufacturing using the REPowerEU grants financing in the ongoing revision of the national Recovery and Resilience Plans. As it is pointed out in the Net-Zero Industry Act, adopted by the European Commission on 16th March, Member States are even encouraged to include measures supporting investments in net-zero technologies and industrial innovation in the REPowerEU chapters of their Recovery and Resilience Plans.

ESMC firmly calls on the EU Member States not to lose the opportunity to support the creation of competitive PV manufacturing facilities and to boost their economies through REPowerEU grants to the PV manufacturing industries. ESMC welcomes the ongoing discussions in several Member States to use REPowerEU financing for the PV manufacturing, expects that this will be followed by respective decisions and requests bold actions to be taken without any delay to plan the appropriate financing in the revised Recovery and Resilience Plans, which the European Commission asked the Member States to submit by the end of April.

Already in early March, ESMC encouraged all EU Member States to allocate financing for PV manufacturing using the € 20 billion REPowerEU budget by sending individual letters to the EU Member States’ governments. Communication with the representatives of governments has revealed diverse views among the EU Member States regarding financing to PV manufacturing. Some Member States have neglected to consider such financing, citing already planned financing for the deployment of renewables. In contrast, other Member States have reconsidered their position and have acknowledged the potential benefits of supporting PV manufacturing. This shift in perspective is particularly notable given the adoption of the TCTF in March.

ESMC emphasizes that the EU Member States are free to propose financing for the PV manufacturing in line with the Guidance on Recovery and Resilience Plans in the context of REPowerEU and the proposals in Net-Zero Industry Act, provided by the European Commission in March. With this € 20 billion, Member States will be able to add a new REPowerEU chapter to their national Recovery and Resilience Plans, in order to finance key investments and reforms that will help achieve the REPowerEU objectives. The financing sources of this additional funding will be the Innovation Fund (60%) and frontloading ETS allowances (40%). ESMC strongly appeals to the key risk that not making use of this additional European grants’ opportunities will be detrimental to the implementation of any PV manufacturing project in Europe.

The European Commission, together with the partners of the European Solar PV Industry Alliance (ESIA), has confirmed ambitious plans for the European PV manufacturing – 30 GW PV manufacturing capacities along the entire PV value chain by 2025. Currently, ESIA is actively preparing the proposals for the entire European PV manufacturing ecosystem, which will be presented during the next months. However, considering actual financial support possibilities, no new financial instruments have been proposed so far – securing financing in the national Recovery and Resilience Plans of the Member States is therefore the most direct and simple option to ensure expeditious European PV manufacturing capacity expansions without delay.

ESMC supports a holistic approach to support the PV manufacturing industry without delay. Notably, if the EU Member States will not allocate adequate financing in their revised national Recovery and Resilience Plans already now, the achievement of the European PV manufacturing targets may be at serious risk. The EU Member States later may face a lack of financial resources to support their PV manufacturing industries once empowering State aid exemptions till the end of 2025.

It is worth noting that the EU Member States were not allowed to subsidize the scale-up of the PV manufacturing industry until March (the only exemptions were for innovative PV projects). Given the strategic importance, the European Commission has now introduced financial support possibilities for the net-zero industries, including PV manufacturing, enabling direct support to the PV manufacturing industries without complex and time-consuming State aid clearance procedures. These efforts are dedicated to maintaining the competitiveness of PV manufacturing in the EU – and if the EU Member States will not use the REPowerEU grants for that, Europe may lose the possibility to rebalance the competitiveness vis-à-vis other global competitors.

Currently, the EU Member States are revising their national Recovery and Resilience Plans and shall submit them to the European Commission for approval before the end of April. ESMC welcomed the European Commission’s decisions earlier in March, allowing the EU Member States to support their PV manufacturing industry by 15-35% of capital expenditures in case of large enterprises (for medium enterprises by 25-45%, for small enterprises by 35-55%) depending on the economic development area. The support through tax advantages, loans or guarantees could be up to 20-40% for large enterprises (for medium enterprises 30-50%, for small enterprises 40-60%) depending on the economic development area.

Consequently, the REPowerEU financing is the concrete, timely and appropriate instrument to support the European PV manufacturing industry, utilising the exemptions introduced by the European Commission for this reason.

Photo: Voltec Solar