A Chinese solar module costs 0.08 euros per watt today. Eighteen months ago, it cost roughly double — Chinese module prices were then around 0.20 to 0.25 dollars per watt, or approximately 0.18 to 0.23 euros. This 50% price drop should be excellent news for the energy transition. It is becoming one of the thorniest industrial headaches Europe faces.

The problem is not the low price. It is what that price reveals: such total domination that it has made the global market structurally dependent on a single country. China produces 93% of the world’s polysilicon, 96.6% of wafers, and 86.4% of modules installed worldwide in 2024, according to CSIS. Europe finds itself before a choice that no one has formally settled: buy these panels at low prices to accelerate the transition, or protect a domestic industrial embryo that costs almost twice as much.

The Essentials

  • China controls 93% of polysilicon, 96.6% of wafers, and 86.4% of global solar modules (CSIS, 2024), creating structural dependence without equivalent in fossil fuels.
  • Module prices have fallen roughly 50% in eighteen months, pushing several major Chinese manufacturers to sell at a loss and forcing Beijing to launch a forced industry consolidation campaign in April 2026.
  • European manufacturers (Meyer Burger, Qcells) cannot align their prices with market prices without massive subsidies: the cost gap between a Chinese module (0.08 €/W) and a European module (0.15 €/W) is structural, not cyclical.
  • Europe has a tariff instrument at its disposal — significant antidumping duties were applied in the past — but debate over their reactivation remains open in Brussels, with the Commission having so far resisted calls for a new formal procedure.

The Deflation That Troubles Everyone, Including Beijing

The fall in Chinese solar prices is the result of a decade of industrial escalation. After successive five-year plans that massively subsidized production capacity, China created colossal overcapacity: the sector can produce far more than the global market absorbs. As a result, manufacturers are dumping goods to clear inventory and maintain market share. Several of them — including giants like LONGi and JA Solar — reported net losses in 2024, according to PV-Tech.

This is not a market accident. It is the logical consequence of a model in which capacity growth was encouraged by state loans at preferential rates, implicit guarantees on state-owned enterprise debts, and subsidized electricity prices for Xinjiang factories. These distortions are not hidden: they appear in European Commission reports and in testimony before the U.S. Congress.

Beijing itself is beginning to worry. In April 2026, Chinese authorities launched an official capacity reduction campaign, with sector consolidation targets and incentives for mergers between players. The stated objective is to raise margins to prevent industry collapse. In other words: the government that created overcapacity is now trying to correct it because it threatens the solvency of the companies it supports.

For Europe, this consolidation is new and uncomfortable data. If Beijing succeeds in reducing volumes and raising prices, the window of 0.08 €/W modules could close. The moment of arbitration may be now.

Meyer Burger Closed Its Doors, Qcells Survives on Life Support

The European solar industry is not dead, but it is in intensive care. Meyer Burger, the Swiss manufacturer whose Saxon Freiberg plant was presented as the spearhead of European renewal, announced in 2024 the closure of its German site after failed negotiations to obtain public support. Approximately 500 jobs disappeared. The decision came just a few months after the company had publicly pleaded for a tariff protection mechanism at the European level.

Qcells, a subsidiary of South Korean conglomerate Hanwha, maintains production in Europe but depends largely on contracts with governments sensitive to the sovereignty argument. Without guaranteed prices or without the tariff gap being filled by public power, the business model does not hold up against Chinese competition.

This finding is not surprising to anyone who has followed cost dynamics in the sector. As analysis of storage and Chinese domination in the renewable energy value chain already showed, mastery of upstream components — polysilicon, wafers, cells — confers a cost advantage that final assembly alone cannot offset. A European manufacturer who buys its wafers in China to assemble modules in Germany is not building an industry: it is outsourcing value-added work and keeping manual labor. (Read: Storage Erases the Intermittency Argument, China Holds the Key)

The real industrial question is therefore that of the complete chain: can a polysilicon-wafer-cell-module supply chain be rebuilt in Europe? Estimates vary, but sectoral analyses agree on a reconstitution cost running into several billion euros over a decade — with a ramp-up time that does not fit the immediate climate agenda.

The Achilles’ Heel of Accelerated Transition

The argument of cheap Chinese prices is appealing, and not only for accounting reasons. A cheaper solar installation means a faster return on investment, a lower cost of renewable electricity, a higher deployment speed. For a continent that has set ambitious emission reduction targets, every euro saved on a panel is a euro available for another part of the system: storage, grids, flexibility. As data on battery-solar integration shows, this chain complementarity is real. (Read: Batteries Push Solar Into the Night)

But low-price acceleration carries a trap that economists call path dependence. The more solar capacity Europe installs powered by Chinese components, the harder it becomes to switch to an alternative supply chain. Maintenance contracts, twenty-five-year performance guarantees, module replacement logistics: everything is organized around the dominant supply. Exiting this logic in ten years would cost far more than entering it cautiously today.

There is also a question of geopolitical resilience. Fossil fuels created dependence on a few exporting countries whose cost Europe measured in 2022. Substituting Russian gas dependence for Chinese solar dependence is progress in terms of emissions, but not necessarily in terms of supply security. The concentration of production in Xinjiang, a region whose human rights situation is documented by the UN and led the United States to adopt the Uyghur Forced Labor Prevention Act in 2022, adds a dimension that European buyers can no longer ignore.

What Brussels Has in Hand and Why It Hesitates

The European Union has a tariff instrument. Antidumping duties on Chinese solar modules had been applied between 2013 and 2018, before being gradually lifted under pressure from installers and solar park developers, who argued that higher equipment costs would slow deployment. Since 2023, industrial players and European lawmakers have called for the reinstatement of such measures — evoking significant duties — but the European Commission has so far resisted opening a new formal antidumping investigation on solar modules, preferring other instruments such as the Net-Zero Industry Act or investigation into foreign subsidies under the Foreign Subsidies Regulation. The question of tariff barrier reactivation remains open in Brussels debates, however.

But the tariff choice is a zero-sum game with several potential losers. Solar installation companies — which employ several hundred thousand people in Europe — oppose it firmly. Their margins depend on the availability of cheap equipment. Raising module costs means reducing project profitability, slowing tenders, and potentially compromising national installed capacity objectives. In France, Spain, and Germany, installation lobbies have been very active with national capitals to avoid a return of tariffs.

The alternative explored by several member states is subsidies for domestic production, following the model of the American Inflation Reduction Act. The Commission loosened state aid rules under the Net-Zero Industry Act, adopted in 2024, which sets a target of 40% of European clean technology demand covered by domestic production by 2030. But mobilized budgets remain fragmented between member states, and without a common financing mechanism at the European level, the richest countries — Germany leading the way — have far greater capacity to act than southern or eastern countries, widening industrial inequalities within the single market.

There is a third path that some analysts defend: long-term contracts between European states and domestic manufacturers, guaranteeing a predictable market without resorting to tariff barriers. The United Kingdom experimented with this mechanism in offshore wind with Contracts for Difference, with real success on deployment. An adaptation to land-based solar is technically possible. It would require political coordination that Europe has not yet managed to mobilize on this subject.

Chinese Consolidation Reshuffles Cards Short-Term

The consolidation campaign launched by Beijing in April 2026 deserves particular attention because it changes the terms of the problem over a twelve to twenty-four month horizon. If Chinese authorities succeed in reducing excess capacity and raising prices above the profitability threshold, two scenarios open.

In the first, prices rise enough to make marginal European industrial projects viable again. This is not a reconquest of sovereignty, but it is a window to invest in capacities that would have been immediately destroyed by competition at 0.08 €/W. Several private capital players, particularly in Germany and the Netherlands, are watching for this moment.

In the second, consolidation fails or is only partial. Excess capacity remains, prices do not rise structurally, and European manufacturers continue to exit the market. In this case, Europe faces a decision to make without a safety net: either it accepts total dependence, or it protects it with tariff barriers knowing full well that this will slow its own deployment objectives.

The paradox is real: if China stabilizes prices around 0.10-0.12 €/W, a competitive European module remains possible with targeted public support. If prices stay at 0.08 €/W or fall further, no credible industrial policy can close the gap without considerable social costs.

This dilemma is not unique to solar. It prefigures similar arbitrations in batteries, hydrogen electrolyzers, heat pumps: sectors where China has already built dominant positions with the same large-scale state subsidy logic, and where Europe is asking itself the same questions about the pace of industrial response.

What Europe Should Settle Before 2027

The European Commission publishes in 2026 a strategic review of its solar industrial policy, whose conclusions should feed discussions in the next multiannual financial framework budget. This is when theoretical arbitration becomes concrete budgetary choice.

Several sector economists, including teams from Bruegel and the Ifo Institute, advocate a two-step approach: maintaining cheap Chinese imports for short-term deployment projects, combined with a sovereign European industrial investment fund to finance players who can hold positions in higher value-added segments — next-generation wafers, heterojunction cells, bifacial modules. The goal would not be to replicate the Chinese chain, but to have presence in technologies that will be decisive in the next generation of equipment.

This approach assumes one thing that Europe has rarely managed to organize: fast collective decision-making, with common funds, on a strategic industrial subject. Recent history in semiconductors, batteries, or public health suggests that the mechanics exist. It requires political will — and shared understanding that the choice is not between fast transition and industrial sovereignty, but between two speeds of the same transition, with very different risk profiles.

Sources

  1. CSIS — China’s Solar Industry in Upheaval: Effects Will Be Global: https://www.csis.org/analysis/chinas-solar-industry-upheaval-effects-will-be-global
  2. PV-Tech — Module pricing and manufacturer financial results 2024 (pv-tech.org, no exact URL guaranteed)
  3. CNBC — China solar overcapacity and price collapse coverage, 2024-2025
  4. SolarPower Europe — EU Solar Manufacturing Report (solareurope.org, no exact URL guaranteed)
  5. Regulation (EU) 2024/1735 — Net-Zero Industry Act, Official Journal of the European Union
  6. Uyghur Forced Labor Prevention Act, U.S. Congress, 2022 (uflpa.gov)
  7. Bruegel — Policy papers on EU industrial strategy and clean tech, 2024-2025 (bruegel.org)
  8. LONGi — Annual Report 2024 (official): https://static.longi.com/LON_Gi_annual_report_2024_0026f3477f.pdf
  9. Council of the EU — Net-Zero Industry Act: https://www.consilium.europa.eu/en/infographics/net-zero-industry-act/
  10. PV Magazine Deutschland — Meyer Burger Freiberg Closure (March 2024): https://www.pv-magazine.de/2024/03/27/meyer-burger-kuendigt-500-mitarbeitern-im-modulwerk-in-freiberg/
  11. Bloomberg — Chinese Solar Capacities (April 2026): https://www.bloomberg.com/news/articles/2026-04-20/china-s-government-urges-every-effort-to-curb-solar-capacity
  12. European Parliament — Question on Solar Antidumping Rights 2018: https://www.europarl.europa.eu/doceo/document/E-8-2018-004503_EN.html
  13. PV Magazine — Modules Now Selling at < 0.06 €/W in November 2024: https://www.pv-magazine.fr/2024/11/15/les-modules-solaires-se-vendent-desormais-a-006-e-w-en-chine/
  14. European Commission — European Solar Charter and 2026 Review: https://energy.ec.europa.eu/topics/renewable-energy/solar-energy/european-solar-charter_en