A new report from SolarPower Europe and Fraunhofer ISE finds that with the right policy support, Europe can competitively produce solar modules and strengthen supply chain resilience, challenging imports from China. The study, titled “Reshoring Solar Module Manufacturing to Europe,” provides a detailed cost gap analysis and policy impact simulation, offering strategies to accelerate domestic solar manufacturing while building a resilient and innovative solar industry.
Walburga Hemetsberger, CEO of SolarPower Europe, emphasized that Europe has the potential to deliver up to 30 gigawatts of solar manufacturing by 2030, creating thousands of local jobs and retaining economic value within the region. She stressed the need for urgent action from the EU and its Member States, warning that without targeted policy interventions, Europe risks losing remaining industrial and technological capabilities in solar manufacturing.
The report shows that producing a solar module in Europe using EU-made solar cells currently costs around 10.3 €ct/Wp more than producing the same module in China. This cost difference is driven by higher expenses in equipment, building and facilities, labor, and materials, with labor costs alone being 280 percent higher in Europe. For utility-scale solar installations, the total cost amounts to approximately 60.8 €ct/Wp for European-made modules, compared to 50.0 €ct/Wp for Chinese modules, resulting in a Levelised Cost of Electricity that is 14.5 percent higher for European production.
Despite these higher costs, European-made modules already fall within the 15 percent additional cost limit set under the Net-Zero Industry Act auction rules, suggesting that competitiveness is achievable with the right support. However, the report also identifies a cost difference of 2.2 to 5.8 €ct/Wp between NZIA-compliant EU-made and non-EU-made modules. While the NZIA’s resilience criteria can help diversify module supply chains and boost imports from other regions, reshoring production to Europe will require additional policy measures.
The analysis suggests that combining CAPEX and OPEX support for both manufacturers and project developers, along with output-based incentives similar to those used in the United States and India, could reduce the cost gap to below 10 percent, especially if solar factories reach 3–5 GW capacity. The report estimates that achieving the 30 GW target for European solar manufacturing by 2030 would require annual industry support of between €1.4 billion and €5.2 billion. Up to 39 percent of these costs could be recovered through macroeconomic benefits, including the creation of 2,700 jobs and up to €66.4 million in annual tax and social contributions per gigawatt-peak of installed capacity.
The report recommends establishing an EU-level output-based support scheme for solar manufacturing, combining grants, loans, and de-risking instruments to cover both CAPEX and OPEX. It also calls for the implementation of NZIA policy schemes across Member States, including “Made-in-EU” bonus points in rooftop support programs and public procurement initiatives. The Net-Zero Industry Act, adopted in June 2024 with secondary legislation in May 2025, sets out rules for Member States on incorporating non-price criteria in renewable energy auctions. Under the act, at least 30 percent of auctioned volumes, or six gigawatts annually, must apply non-price criteria, which account for 15 to 30 percent of overall evaluation metrics.
Resilience under Article 26 is defined as sourcing from non-dominant suppliers, and Member States are required to implement these provisions from January 2026 onward. The act provides a historic opportunity for reshoring clean technology manufacturing in Europe, but its success will depend on how effectively Member States apply the non-price criteria in their auctions. The report concludes that with targeted policy support, Europe can successfully build a competitive solar manufacturing sector, enhance supply chain resilience, retain economic value domestically, and contribute significantly to the region’s broader climate and energy transition goals.
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