Europe Faces Growing Pains in Renewable Energy Market

July 27, 2009

Email this story Print this post Add your comments

Europe’s renewable energy market is being hurt by falling prices, lower demand and the ongoing credit crunch. As a result, key players in the solar and wind markets are faced with difficult choices in order to survive current market conditions.

To combat rapidly falling prices and market shares, European solar cell and module makers may be forced to speed up their production shift to Asia, reports Reuters.

The European solar sector is suffering from an oversupply of cells and modules that has driven down average selling prices (ASPs) for solar systems, together with Asian companies stealing market share by slashing costs, the article said.

In addition, China announced an incentive program for solar firms last week, including a 50 percent subsidy for investments on solar power projects, that could further reduce production costs, already among the world’s lowest, reports Reuters.

According to a survey by German industry publication Photon, China accounted for about a third of the market for global cell production in 2008, while Europe’s share declined to 25.6 percent last year.

Chinese module makers now have a market share of about 50 percent in Germany from zero a year ago, according to a UBS report, though Germany is still expected to become the world’s biggest market by installation.

Thiemo Lang, senior portfolio manager for Zurich-based Sustainable Asset Management, told Reuters the only way for Western producers to regain their footing is to build production bases where their Asian competitors are.

A lack of cash is also hurting the wind industry. The UK government is expected to announce £1billion (about $1.6 billion) of lending to wind farm developers to kick start 1 gigawatt of onshore wind schemes that have been stalled by the credit crunch, reports The Guardian.

The initiative comes as Greenpeace unveils new figures showing that local councils run by the Conservative party block more than three times as many wind farms as they approve, reports The Guardian.

Both issues are important because Vestas, the UK’s only major wind turbine maker, is threatening to close its manufacturing plant on the Isle of Wight this week in part blaming a lack of a strong domestic market.

The government’s cash infusion is part of the additional £4billion (about $6.6 billion) of European Investment Bank (EIB) lending to support UK energy projects announced in the spring budget. The government has been urged by environmentalists and thinktanks to use the state equity stakes in banks, gained when they had to be bailed out last autumn, to push them towards green projects, according to the UK newspaper.

Email this story Print this post Add your comments

Advertisers

Stay competitive through sustainability.

Find out how at the SAP Sustainability Resource Center. >>

Unclear about the EPA's new GHG Rule?

Learn how it could affect your business. >>

EPA mandatory emissions reporting starts Jan 1st

CSA Standards can help your organization get ready for compliance. Find out how. >>

Best Practices: Product Environmental Compliance

How to achieve compliance at a significantly lower cost. Download the full report. >>

Join the Discussion

Recent Daily News [ see all ]

11/20/2009
11/19/2009
11/18/2009

Charts [ see all ]

European Paper Industry Cuts CO2 Emissions by 42% since 1990

S. America Takes Most Urgent View of Copenhagen Talks

Nike Tops Annual Climate Action Scores

Oceans May Trap more Carbon than Forests

Jobs

View All Jobs >> Post a Job >>

Comments and Discussions

Stevenson on News Corp. Taps Hara for Energy Efficiency, Environmental Management
"All of us should think of ways to save energy now. It is not a myth,..."

Trade Association on Trade Group on EPA Chemical Regs: ‘If Everything is a Priority, Then Nothing is a Priority’
"Seriously… that..."

Gary Markowitz on Supermarkets Tackle Emissions Reductions, Fuel Efficiency
"Supermarkets waste over 10 percent of their energy through improper..."

peter in ireland on Ontario May Follow California’s Lead on TV Energy Efficiency
"Governor Schwarzenegger is shooting himself in the foot! 1...."

Environmental Leader on S. America Takes Most Urgent View of Copenhagen Talks
"The survey respondents (the PDF report mentions 4,000 respondents in 38..."

Jake on UPS Trying New Hydraulic Hybrid Trucks
"A point of clarification: the Reuters press release referenced herein reports that 20 UPS will purchase..."

Custom Organic Shirts on S. America Takes Most Urgent View of Copenhagen Talks
"90% of North Americans believe it is urgent to get a global climate..."

Environmental Leader