Europe’s Solar Ambition and Industrial Dependence

Executive Summary

Europe’s solar strategy is built on shaky ground. Meeting EU climate targets requires 325–375 GW of new PV capacity by 2030, a three- to five-fold market expansion. Yet Europe’s solar industry has collapsed: its global market share fell from 30% in 2007 to just 3% in 2017, while Chinese producers consolidated dominance across mid- and downstream segments. In Technological Sovereignty and Strategic Dependencies in Europe’s Photovoltaic Supply Chain (Caravella et al., 2024), we analyse Europe’s trade, innovation, and dependency dynamics across the global solar value chain.

Strategic dependencies are concentrated in cells, modules, inverters and solar glass. The EU now runs annual trade deficits of up to €30 billion in midstream PV goods, with China supplying over 60% of imports. Europe retains strength in some upstream machinery and polysilicon, but these niches cannot offset growing reliance downstream.

Technological specialisation mirrors trade hierarchies. Patent data show that Japan and South Korea remain leaders, China has rapidly caught up, while the EU and US have de-specialised since 2010. The EU’s relative strength lies in machinery patents, but it lags in modules and inverters — precisely where trade dependence is deepest.

Path-dependency locks in vulnerabilities. Transition probability analysis shows that once countries fall into high-dependency states, they rarely escape: the probability of the EU moving from high to low dependence is just 10%. Building capabilities is costly and slow, reinforcing the urgency of proactive policy.

Technological sovereignty does not mean autarky. The study stresses the need to reduce one-sided structural dependencies, not to “reshore everything.” Diversification, capability building, and EU-level coordination are key to de-risking the supply chain.

Policy Recommendations

1. Target bottlenecks. Prioritise modules, inverters, and solar glass where dependence is highest and technological capabilities weakest.
2. Rebuild upstream strength. Scale support for machinery and materials where Europe retains a foothold.
3. Pair diversification with innovation. Support mission-oriented R&D in critical PV technologies alongside procurement from non-concentrated suppliers.
4. Create EU-level demand signals. Use joint procurement and standards to anchor predictable markets for European and diversified suppliers.
5. Track dependencies. Establish regular IDEP–RTA dashboards to monitor vulnerabilities and guide policy.