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German Economy Minister Plans Subsidies for Domestic Manufacturers

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German Economy Minister Plans Subsidies for Domestic Manufacturers

German Economy Minister Plans Subsidies for Domestic Manufacturers

December 18, 2023

In recent times, the German government frequently rumours in the field of solar energy to reduce the so-called "dependence on China" sound. Local time on December 17, the German economy minister Habeck (Green Party) accepted the German media "German editorial network" (RND) interview, said he plans to provide state subsidies to strengthen the power of the country's solar energy manufacturers, and compete with Chinese manufacturers.



"German solar products comply with certain criteria that products from other countries do not, for example, German manufacturers often operate efficiently without the use of hazardous chemicals ......," Habeck said, therefore, German manufacturers "should be rewarded for this resilient contribution."



Habeck said he plans to subsidise local solar manufacturers at the national level through Germany's Renewable Energy Act, and that "the current parliamentary proposal for a 'solar package' makes the implementation of state subsidies possible". The RND reports that the "solar package" was originally scheduled to come into force at the beginning of this year, but discussions in the German Bundestag have been postponed until around January next year.



In any case, we have the firm goal of realising the planned projects," says Habeck. We have strong and innovative companies, and other companies that want to invest here are also interested. We should make the most of it." He also called on German manufacturers to actively market their products, for example, by "launching a drive to provide special offers for German products."



Habeck emphasised the importance of the solar sector for job creation, and that "it is important for Germany that domestic products have at least a basic share of the domestic market". It is also a question of economic security, he said, "We cannot rely entirely on imports."


Habecker visits German solar manufacturer



Initially, the German Federal Ministry of Economics planned to use 1.3 billion euros (about 10 billion yuan) to provide subsidies for German manufacturers, and asked the states to provide financing schemes for the local photovoltaic industry. But the German Constitutional Court ruled last month to cut most of the budget of the German government's proposed "Climate and Transition Fund". Now, the Ministry of Economy wants Parliament to adopt a "solar package" to continue to support domestic manufacturers.



Not only Germany, the European Union has recently been planning a similar subsidy programme. Reuters reported in October that in recent years, China's solar panels to European manufacturers brought "enormous price pressure". Germany, led by the European Union countries are trying to reduce dependence on China in the field of solar energy, plans to use subsidies or "tariff peaks" and other tools to protect the European Union photovoltaic enterprises.



Data from the European Commission show that more than 90 per cent of the silicon ingots and wafers used to manufacture solar panels in the European Union come from China. Currently, there is an oversupply and low prices of solar panels in Europe. The European Solar Manufacturing Commission (ESMC) said that prices have fallen from a peak of about 0.24 euros per watt at the beginning of the year to about 0.15 euros, while European manufacturers priced at 0.30 euros.



However, some industry insiders revealed that there are differences within the German enterprises, and some installers questioned the move as trade protection. At the same time, some European solar companies also grouped to express opposition. Swiss photovoltaic executives said that tariffs are not the optimal solution to the current challenges, while the European Photovoltaic Industry Association warned that a potential tariff war would lead to a "lose-lose" situation and seriously undermine Europe's ability to deploy clean energy.

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