“New technologies provide vast potential”

What kind of competitive advantage does Europe have over China in terms of innovation and research, for example?

Bett: Let’s take a look at the industrial supply chain: When it comes to polysilicon material, we’re still a player in the international market. Wacker is still in the market simply because they offer the best material in the world. This is a good foundation – quality can help us win a larger market share. At present, the only obstacle is the high electricity price.

Regarding wafer technology, Europe has new technological approaches, such as kerfless wafering technology and epitaxial wafer. These approaches have been developed by companies that may use this technology to produce wafers at an industrial scale in perhaps five or ten years from now. However, this also means that for now, we need to rely on standard technology and use Chinese know-how. In the long term, we can bank on the new kerfless technology – a huge innovation potential for Europe.

With regard to solar cells, the world records in efficiency held by laboratory cells from Europe remain unbroken. This extends to the next generation of tandem solar cells. We also continue to have strong mechanical engineering know-how, so ramping up industrial production seems achievable.
And in terms of modules, we’re also developing shingles here in Europe. Our labs are producing innovations in this segment, too, so we can expect the scaling up to industrial production to be successful.

China is currently also focusing a lot of manpower on research. Nevertheless, Europe’s research infrastructure is very efficient and continues to yield important innovations. This know-how in research and development which we continue to expand – that’s Europe’s competitive edge.

Which concrete innovations can you name?

Rennhofer: Examples of technologies that are ready to go are tandem cell designs, which involve the refinement of conventional cells with top cells. For instance, a perovskite cell is connected with a crystalline silicon solar cell or conventional classic thin-film technologies to create a tandem configuration. In the high performance range, we also have gallium arsenide solar cells for space applications, a simple version of which can also be used here on earth for single or tandem cells. However, they’re too expensive to compete in the market. These manufacturing methods allow for a sharp increase in conversion efficiency and the goal is to exceed 20 percent efficiency.

We are also making progress with expanding service life while still adhering to the European regulations for raw materials, which prohibit the use of toxic materials and lead in perovskite solar cells, in addition to providing for the product’s recyclability. There are several candidates that can achieve high efficiency. Other building-integrated solar cells include differently encapsulated, crystalline high-efficiency cells, organic solar cells, dye-sensitized solar cells and perovskite cells.

In summary, Europe is strong in the research and production of various cell technologies.
It’s not just about efficiency, but also about creating technological solutions that work not only for free-standing installations, but also for infrastructure integration in different sectors, such in buildings, vehicles, railway infrastructure, highways, in noise barriers or as floating PV.

During the pandemic, high transportation costs for products from Asia contributed to making European on-site PV production more profitable. At the same time, production costs in Europe have risen sharply, mainly due high electricity prices.
What impact do these two factors have on the choice of location, also in relation to each other?

Bett: After increasing from ten to 35 percent during the Covid-19 pandemic, transportation costs are now dropping, making European modules cheaper again. At the same time, the share of electricity costs accounts for a substantial share of total costs. This is why fair competition would be impossible if the price of electricity for production in European locations was not competitive. The share of electricity costs for polysilicon is significantly higher than 50 percent.

But the situation is quite different for cell and module production, where the electricity costs are low, whereas for wafers, the costs are noticeable. In order to be globally competitive, a guaranteed electricity price for wafer production would be helpful.
In total, the electricity price has a greater impact than the transportation costs.

So Europe’s herculean task is to stabilize the electricity price in order to make production feasible, correct?

Bett: Exactly. In other countries like China and the USA, the electricity rates for industry are guaranteed. This distorts competition by setting different framework conditions. We need to be aware that the fact that the EU industry pays the full electricity price has this effect.

Rennhofer: What was forecasted years ago is becoming increasingly evident: The choice of location also depends on the energy price. The solar industry has long called for the extensive deployment of renewable energies because they ultimately provide the cheapest electricity with the greatest supply security. According to forecasts for 2030 and 2035, the tender price could then be below the current net electricity price for the industry. This is good news, because it means we can build a competitive industry in the medium to long term.

Bett: What matters now is financing the transition phase. At the moment, we have high electricity prices because we did not deploy renewables sooner. In the long term, the electricity price will decrease. Until it does, we will be going through a critical phase during which we need to ensure that the industry doesn’t relocate elsewhere.

M. Rennhofer and A. Bett spoke to Sarah Hommel de Mendonça.