Solar Supporting the EU Strategic Agenda 2024-2029

The focus must now be on implementing the key legislation agreed under President von der Leyen's first term. Regulatory stability, especially regarding the European electricity market, is essential for investor certainty and private investments in clean energy projects. Implementation, however, requires an active investment programme alongside it. 

We very much welcome the ambition to make the next Commission an investment Commission. Unlocking private capital needs to go hand in hand with first, aligning and improving existing EU funding with delivering the 2030 objectives and second, establishing a new EU fund supporting investment in smart energy infrastructure (e.g. through a Decentralised Grids Facility) and solutions supporting flexibility, storage, and electrification. The European Competitiveness Fund could play that role, not in the least because European competitiveness will largely depend on deep renewable and flexible electrification. 

We are, however, calling for a new Green Deal or Energy Transition Delivery Fund under the next Multi-year Financial Framework to sustain financial support for Member States in the crucial years before 2030, especially as the Next Generation EU and Resilience and Recovery funds dry up after 2026. Finally, delivering on our climate and energy objectives also requires future-proof regulation to unlock and anticipate necessary investments in a modern and digitalised grid infrastructure, flexibility, and storage. 

A Clean Industrial Deal that leverages flexible renewable electrification for competitiveness will secure European leadership in clean energy technologies. Parts of Europe’s industrial ecosystem have been hit hard by the energy crisis. Europe no longer wants to rely on cheap gas imports from Russia. This is a unique opportunity for accelerating the shift to an industrial competitiveness based on renewable and flexible electrification. 

According to our report – Mission Solar 2040 – more renewables, electrification and flexibility can boost European competitiveness, slashing average day-ahead electricity prices by 25% by 2030, and by 33% by 2040. 

Of course, more is needed to secure internationally competitive electricity prices for energy-intensive industries, primarily by allowing more state support for operational expenditure (opex) without distorting electricity markets. Europe’s energy-intensive industries need clean and affordable energy to remain competitive, and Europe’s renewable industries need more flexible electricity demand to keep business cases healthy. The EU Clean Industrial Deal, the Industrial Decarbonisation Accelerator Act, and the European Competitiveness Fund, therefore, must have decarbonisation solutions mainly through industrial electrification (both at transmission and distribution level) at its core.  

In the framework of securing European leadership in clean energy technologies, implementing industrial policies that enhance the competitiveness of the European solar manufacturing supply chain to reach Europe’s reshoring goals by 2030 will be important, including respective funding for new European manufacturing facilities.

Solar PV supply chains are currently highly concentrated in China. The EU should step up in building resilient, sustainable, and competitive European supply chains in the solar, equipment and inverter industries, as well as engaging in international partnerships, pursuing a sound diversification strategy. 

We very much welcome the ambition to take the Global Gateway to the next level, including for diversifying and de-risking solar supply chains. This is essential for Europe’s position in the changing map of energy geo-politics. We also call for improving the investment conditions for European solar and inverter manufacturing companies, in particular by allowing for state support for operational expenditure under the TCTF. 

We very much welcome the ambitions to have more focused, simpler, and impactful EU financing, for example via the new European Competitiveness Fund and the Important Projects of Common Interest (IPCEIs). We call for dedicated financing instruments for scaling up solar PV manufacturing capacity in Europe, similar to the Hydrogen Bank or the Battery Fund, and for establishing an IPCEI for solar inverters. 

Inverters are the computer components of a solar system and essential for grid connections, cybersecurity, and future energy security. Europe needs to maintain its strong EU inverter industrial basis which is currently under pressure. We also fully subscribe to your ambition to deepen free and fair trade based on the principles of reciprocity and “de-risking not decoupling.” We recall our statement from Autumn 2023 highlighting that trade defence instruments are not part of the solution. As history has shown, trade barriers on solar are the ultimate lose-lose strategy for Europe. 

Solar is a uniquely versatile and adaptable technology. Most European citizens’ first contact with the energy transition starts with solar on their rooftops or in their neighbourhoods. Solar has proven its constructive and positive bridging role to communities that would otherwise feel left behind, empowering people to become prosumers. 

We are, therefore, warmly welcoming ambitions to support people and to strengthen our societies and social model. The European Affordable Housing Plan should embrace the potential of rooftop solar to directly reduce energy bills, not in the least on social housing. This aligns well with the solar rooftop mandate agreed on in the European Performance of Buildings Directive (EPBD). 

Similarly, as Europe and the world grapple with the challenges of climate change and the need for sustainable farming practices, the marriage of solar power and agriculture offers a promising solution. Agrisolar has proven to foster sustainable agriculture practices, bringing crops and animals protection, improving local adaptation to climate change – not in the least with respect to water and soil quality retention - and ensuring income security for farmers. The Strategic Dialogue with farmers and the European Climate Adaptation Plan should have the positive contribution from solar on the agenda.

We applaud the clear message in the Political Guidelines on enshrining a 90% emission-reduction target for 2040 in the European Climate Law. This is incredibly important for establishing a stable and investable longer-term perspective. We call on the Commission to complement that emission reduction target with a new 2040 RES target as well as new political objectives accelerating flexibility, grids, storage, and electrification. Establishing political objectives is important for ensuring political oversight and synchronising renewables build-out, grids and flexibility development, minimising system costs and inefficiencies. 

Analysis of the latest National Energy and Climate Plans backs up the argument: while ambition levels for renewables have substantially improved, it is not matched with objectives and investment plans in grids, storage, and electrification. This disconnect cannot continue if we are to take the next step in the energy transition.