Germany’s Solar Panel Industry, Once a Leader, Is Getting Squeezed

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Domestic manufacturers are caught between China’s low prices and U.S. protectionist policies, even as demand increases.

Before China came to dominate the solar panel industry, Germany led the way. It was the world’s largest producer of solar panels, with several start-ups clustered in the former East Germany, until about a decade ago when China ramped up production and undercut just about everyone on price.

Now as Germany and the rest of Europe try to reach ambitious goals to cut greenhouse gas emissions, the demand for solar panels has only increased.

Some of the last remaining manufacturers in Germany’s solar industry are not ready to give up.

They are demanding that the government in Berlin offer incentives to protect producers that have survived by catering to niche markets and expanding beyond making panels. They argue that Europe’s high standards for the origin of materials and shorter supply chains make production in Germany more environmentally friendly and reliable.

Not everyone is convinced protectionism is the way to go. Some critics note that the European Union’s tariffs on Chinese solar panels from 2013 to 2018 failed to save the domestic industry. Others argue that affordable, widely available solar panels are desperately needed regardless of their origin.

A worker at Meyer Burger in Thalheim, Germany, packing solar cells for shipping.Patrick Junker for The New York Times

Because Europe relies “to a very important degree” on imported solar panels, any measure to restrict imports “needs to be weighed against the objectives we have set ourselves when it comes to the energy transition,” Mairead McGuinness, the European commissioner for financial stability, told the European Parliament last month.

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