Solar Module Production Capacities and Output Decline in the EU in 2016

By Michael Schmela, Executive Advisor & Head of Market Intelligence

Solar module production capacities in the European Union (EU) decreased in 2016, while the output of EU factories dropped in a two-digit range, according to a survey by Solar Power Europe, the association of the European solar sector.

In 2016, module manufacturers had facilities in the EU with 6.7 GW annual production capacity, a 3% drop from 6.9 GW in 2015. Production output decreased by 16% in the same period to around 2.7 GW, from 3.2 GW in 2015. The utilization of the module factories in the EU continued to decline to 40% in 2016, from 46% the year before.

Cell manufacturing capacities remain much lower than module capacities in the EU at a constant level of around 1.8 GW in 2015-16. But even this small cell capacity is mostly used in-house.

Our survey shows that unfortunately many of the EU module production facilities are simply ghost capacities.

There are several reasons for the consolidation of the EUs solar module production sector, including the rather low demand for solar in Europe and local module factories being often too small to compete for standard solar applications. But a key factor making local EU-based module manufacturers life very hard today is the Minimum Import Price (MIP) for solar cells, which keeps low-cost Asian products the companies need at artificially high levels.