December 9, 2024
How can public procurement support European solar manufacturing? Article Sources: Newsletter from “Solar Manufacturing Matters”
Sources: How can public procurement support European solar manufacturing? | LinkedIn
The European Union has set a goal of at least 30 GW of European solar manufacturing, at each stage of the value chain, by 2030.
However, market forces are driving down the price of solar components, making it difficult for Europe’s solar industry to sell their products and scale up. We continue our urgent calls to support these critical links in the solar-led energy transition.
The new European Commission is formally in office , and the new European Parliament has been underway for months – the European mandate 2024-2029 is now truly underway. We know that lawmakers are cooking up the Clean Industrial Deal and a host of initiatives that should support European solar manufacturing (catch up in the last edition of Solar Manufacturing Matters).
What we can expect for sure is, around March 2025, the Commission should adopt the Implementing Act for the already-adopted Net-Zero Industry Act. Typically, Implementing Acts are usually adopted directly by the European Commission, via committees with representatives from EU countries. This Act will set the technical details of the law, like how awards and pre-qualification rules will apply to bids into renewable energy auctions or public procurement. Back in June, we published our recommendations on auction rules to support solar manufacturing, now we’ve published our position paper for public procurement. Read on to explore our recommendations, and the usual solarcoaster market insights from across the media.
Policy Friday Focus: Public Procurement of Solar
The Net-Zero Industry Act (NZIA) is a key part of the puzzle in setting an EU industrial strategy for solar PV. It sets the 30 GW goal solar PV manufacturing capacity goal. It also includes a goal for the EU to have at least 40% of net-zero technologies manufactured and deployed in the EU. As part of this, the NZIA sets rules to drive public/government demand for European solar, through public procurement (NZIA Article 25), renewable energy auctions (NZIA Article 26), pre-commercial and public procurement of innovative solutions (NZIA Article 27), and other forms of public intervention (Art. 28).
As a societal benefit, public authorities should be investing in solar supplies that reinforce the resilience of the supply chain and encourage strong sustainability standards. This should clearly support European solar manufacturers.
For example, the European Performance of Buildings Directive requires all suitable public buildings to have solar installations by 2030. Assessing the exact potential is tricky – there is limited data on public buildings. However, we estimate that solar on public buildings alone could lead to up to 9 GW of annual installations on public buildings in 2026 and 2027, 18 GW in 2028, and 27 GW in 2029 and 2030. That’s around 80 GW of solar that has a good likelihood of being made in Europe. Those figures make it easier to invest in European solar factories – they have a clear offtake pipeline.
So, for the first time, the NZIA will require public authorities across the EU to consider such resilience and sustainability criteria when they procure solar installations for use on public property. Authorities should already be implementing resilience considerations, as of the NZIA entering into force in June 2024. Now it’s important to make resilience criteria implementation practical, while sustainability considerations set in March with the NZIA Implementing Act should be equally operational. Ultimately, the Implementing Act must be crystal clear on how public authorities must implement the NZIA. Authorities are already often overburdened and under resourced. SolarPower Europe has made a few recommendations on how to roll out the NZIA and its Implementing Act.
Principally, rules must be clear, transparent, technology-specific, and harmonised to set EU-wide rules. A Mayor’s office in France should be applying the same rules as a public school district in Poland, and vice versa. Technology-specificity matters. For example, there should be set rules and targets for solar that are distinct from other technologies like wind. The technologies are clearly different, and so are their supply chains. Of course, the rules should also align with other relevant EU legislation.
Sustainability pre-qualification should be set by carbon footprint performance criteria that are even stricter than upcoming PV Ecodesign rule, to push for excellence beyond minimum market entry standards. We could set the carbon footprint threshold at 15% less than the ecodesign rule. Then, public authorities could not procure solar panels with greater carbon footprints.
In measuring whether a solar product is ‘resilient’ or not, SolarPower Europe suggests, when a supply dependency according to Art. 25 (7) has been identified, that at least 50% of the value of the main specific components of the specific net-zero technology have to be manufactured outside the dominant source of supply. For example, products could come from EU countries or other signatory countries of the WTO Agreement on Government Procurement.
Public authorities should only use products and solar systems which support the robust cybersecurity of our energy system. We recommend that relevant operational data of EU PV power plants, and smart energy equipment with potential impact on grid stability, remains in the EU or jurisdictions that can ensure an equivalent level of security. Key parts of EU GDPR and the processing of data should apply. We also recommend that authorities only procure solar installations with advanced certification, like ISO 27001 or equivalent.
Solar systems which are installed via public procurement should also follow the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct and United Nations Guiding Principles on Business and Human Rights relating to social and employment-related considerations as a reference which are all connected to the ILO Convention.
Beyond the minimum requirements set out above, SolarPower Europe also makes recommendations on ‘bonus points’ that allow authorities to award well-performing material (without risking security of supply of products).
On top of carbon footprint pre-qualification for example, bonus points should be awarded to other positive environmental performance, e.g. PFAS-free polymer layers, antimony-free solar glass, improved module performance, longer warranted lifetime, and recyclability. It is important that these remain bonus criteria and not minimum requirements, considering the potential impacts on product availability.
Public authorities could also award bonus points to projects or installations that encourage profit sharing with citizens or where investment schemes have been based on crowdfunding, via an energy community.
*Using data from the EU Building Stock Observatory, assuming 60% of public buildings are suitable for rooftop solar, 20% of buildings have 30 kW installations, 40% of buildings have 50 kW installations, 30% of buildings have 100 kW installations, and 10% of buildings have 200 kW installations.
Solarcoaster
The latest ups and downs in the EU solar manufacturing landscape.
TRADE: Two new protectionist policies were launched. Firstly, India imposed antidumping duties on solar glass from China and Vietnam. Then, the US issueda second round of import tariffs on solar cells.
ALARM BELLS: Energy storage manufacturing is facing a similar crisis. In the aftermath of the Northvolt insolvency procedures, the storage division of SolarEdge closed down, cutting 500 jobs.
PRODUCT LAUNCH: German manufacturer SolarWatt released a new residential BESS and Sunlit unveiled a new bidirectional inverter for solar carports and balcony solar.
Solar Manufacturing Matters is a fortnightly newsletter on the European solar manufacturing landscape. Every other Friday, check out our latest EU policy analysis and a roundup of solar manufacturing market news.
From SolarPower Europe, the award-winning European trade association with over 300 members active at every point in the solar PV value chain.
