Europe's solar manufacturing sector faces unprecedented challenges, with companies grappling with a crisis that threatens their viability. In response, SolarPower Europe has put forward a bold solution: the creation of a structural financing tool known as the EU Solar Manufacturing Facility. 5t476

This tool aims to provide crucial to solar module manufacturers across Europe. Acting as a dedicated channel for both EU and national funds, it seeks to bolster companies that uphold strong standards in resilience, environmental, social, and governance (ESG) practices, and product quality.

This facility is envisioned as more than just a funding mechanism. It will serve as a centralized platform for solar buyers and producers to engage and finalize deals, fostering collaboration and growth within the industry.

The initiative is expected to receive initial from the Innovation Fund, with additional backing from the European Investment Bank (EIB). Together, these resources will provide the necessary foundation for the EU Solar Manufacturing Facility to take shape and begin its mission of revitalizing Europe's solar manufacturing sector.

According to the association, to significantly boost solar PV supply chains in Europe and reach initial scale, this financial instrument would need to have access to at least €0.78 bn EUR annually to investment of 10 GW across the solar PV supply chain over a 10-year period (totalling €7.78 bn EUR). This would cover capital expenditure and operational expenditure for partially re-shored manufacturing capacity. 

Funding could be sourced either from existing EU funding, like the Innovation Fund, or new EU funding, for example in the form of a European Sovereignty Fund, and should be ed by the European Investment Bank. Additionally, the auction is recommended to incorporate an “Auctions-as-a-Service” (AaaS) design feature to allow for Member State participation. This could unlock additional funding, and aid Member States in attracting domestic solar manufacturing capacity to their country, by removing istrative and financial barriers.

SolarPower Europe says that large welfare creation and tax influx can be expected through attracting domestic solar manufacturing capacity, which would largely offset the annual funds required. If assumed to be proportional, €67 million in tax collection can be expected per GW of re-shored capacity under the Solar Manufacturing Facility - this would translate to at least 50% of the required public funding.