New EU subsidy rules to decarbonise industry

Today, the European Commission adopted a new State Aid framework, setting the rules for how EU countries can more effectively subsidise and financially support their industries in their efforts to decarbonise and scale up. The framework guides the approval process for Member State Aid applications, which are subject to approval from the European Commission. The new rules are in force from today until 31 December 2030.

SolarPower Europe has issued the following statement in reaction. 

Walburga Hemetsberger, CEO of SolarPower Europe (she/her) said:

“This is a watershed moment for European industry in their efforts to compete globally and decarbonise. 

For the first time, EU governments can support the electricity costs for their nations’ heavy industry. If applied properly, the new rules will help more European businesses to access the competitive and climate advantages of solar-based electrification.

Importantly, under the new rules, support must apply to all types of electricity procurement – maintaining a level playing field between on-site solar PV, power purchase agreements (PPAs), and standard electricity supply. We do caution that fossil fuels shouldn’t be made artificially cheaper to the detriment of low-cost, renewable electricity – the structural solution to competitive energy costs.

The new rules are particularly good news for SMEs that want access to solar – now they don’t anymore need burdensome auction processes to utilise their large rooftops to host solar. It is also positive that utility-scale PV installations can continue to receive aid during periods of negative pricing, provided they are curtailed and do not inject into the grid.

We regret that the rules for solar manufacturers are not substantially improved. The option to temporarily support electricity costs of existing heavy industries is not evidently available for new solar manufacturing projects. We call on the European Commission to turn to the EU budget and swiftly set up a Clean Tech Manufacturing Bank, including a dedicated Solar Manufacturing Facility, that rewards projects with production-linked aid, covering opex costs for new factories. This is essential to ensure a competitive solar manufacturing base and reach the 30GW goal by 2030 as outlined in the Net Zero Industry Act."

© European Union (download here)