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Europe’s renewable energy transition is uncomfortably dependent on one of its biggest geopolitical rivals. Whilst the European Union races to install panels and storage, it has also become heavily reliant on Chinese manufacturing for the technologies that underpin its goals.
Almost all solar panels installed in the EU are imported from China, as are many of the batteries. China’s dominance isn’t accidental. The country’s coordinated industrial strategy is outlined in its policies, including the 14th Five-Year Plan for Energy Storage, which targets 100 GW of battery storage capacity by 2030 alongside 30% cost reductions. Beijing has backed this with billions invested in solar manufacturing alone, integrated supply chains, and provincial mandates requiring renewable projects to include storage systems. Now, China can produce panels at between half and two-thirds the cost of European alternatives.
The situation has reached what the European Solar Charter describes as “unsustainable,” with European manufacturers closing operations or turning to protected US markets. As panel prices drop and the EU targets 780 GWh of battery storage capacity by 2030, the question is whether Europe can mount an effective industrial response to China’s state-directed dominance.
European solar commitments
Solar energy is currently the fastest-growing renewable energy source in the EU, according to the Commission.
- Last year, 56 GW of solar PV were installed in the EU (two-thirds on rooftops).
- Installations in 2022 and 2023 saved the equivalent of 15 billion cubic metres of Russian gas imports.
- The sector provides around 650,000 jobs, 90% on the deployment side, projected to increase to around 1 million by 2030.
Growth stems partly from the absence of tariffs or duties on Chinese solar module imports, but these same open trade conditions have exposed domestic producers to continuous price declines. Panel prices fell from about €0.20/W to less than €0.12/W in 2023, creating what the European Solar Charter describes as an “unsustainable situation”. Some European manufacturers are closing or reducing operations, or prioritising production for the US market, where tariffs and other trade policies make Chinese imports more expensive. A number of initiatives aim to address the problem.
The European Commission has not announced tariffs on imported solar panels, instead focusing on supportive policies:
- The EU’s Net-Zero Industry Act, agreed in early 2024, sets a binding target for European net-zero technologies manufacturing capacity to “approach or reach at least 40%” of annual deployment needs by 2030.
- The EU Clean Industrial Deal mobilises over €100 billion for clean-tech manufacturing, including solar.
- For solar specifically, the European Solar PV Industry Alliance, launched in late 2022, targets 30 GW of annual production capacity by 2025, with more than 20 projects in its pipeline.
- Following on the heels of these policies, the European Solar Charter, also signed last year, aims to address plummeting prices and import dependency on China. But the proposed actions in support of EU photovoltaic manufacturing are voluntary.
Charter commitments
With no timelines or mandated targets in the Charter, will cooperation and goodwill be enough to secure the sector’s competitiveness? Critics are not so sure. Nevertheless, the charter commits member states to rapidly implement non-price criteria in renewable energy auctions and public procurement. These include resilience, sustainability, cybersecurity, and “ability to deliver” standards. Countries pledge to create favourable conditions for manufacturing facilities and remove regulatory barriers for innovative solar deployment like agri-PV, floating solar, and building-integrated systems.
Financial support includes using EU funding opportunities and flexibilities under the State Aid Temporary Crisis and Transition Framework. The Commission intends to work with the European Investment Bank to reinforce support through InvestEU and explore an Important Project of Common European Interest (IPCEI) for solar manufacturing innovations.
Europe’s struggles become clearer when viewed against China’s systematic approach to energy dominance.
How China dominates clean energy
Solar panels
China dominates the global solar panel supply chain, controlling over 80% of manufacturing capacity across all stages with 90% of panels including Chinese components such as polysilicon, wafers, cells, and modules. This has driven down costs by more than 80% over the last decade. Since 2011, China has invested more than €44.3 billion in solar PV manufacturing. This dominance is driven by large-scale government investment, cost efficiencies, and a well-integrated supply chain, which has enabled China to produce solar panels at two-thirds the cost of European-made panels.
Over 95% of solar panels installed in the EU are imported from China. While this reduces costs and accelerates deployment in Europe, it has made European solar panel manufacturing unviable.
The Global Energy Interconnection initiative
China’s deployment of ultra-high-voltage (UHV) grid infrastructure under its “Global Energy Interconnection” (GEI) initiative solves two challenges: domestic renewable integration and global technology standardisation. Domestically, UHV lines enable China to transmit vast amounts of wind and solar power from resource-rich western regions to industrial eastern hubs, slashing energy losses even over distances exceeding 3,000 km. It means China has cheap energy for it’s manufacturing sector.
Through projects like hydropower links in Brazil and cross-border grids in Africa and Southeast Asia, China bundles UHV infrastructure with its renewable tech, locking nations into Chinese equipment, protocols, and financing. The State Grid Corporation (SGCC), which controls 80% of global UHV patents and 70% of equipment production, drives this expansion. It’s establishing Chinese standards (like voltage control algorithms), as global norms, sidelining EU competitors.
For the EU, China’s UHV lead erodes Europe’s green industrial competitiveness by enabling cheaper Chinese exports. Geopolitically, it extends Beijing’s influence via energy dependencies. While the EU struggles with fragmented national grids and slow permitting, China’s state-backed model rapidly deploys integrated infrastructure, turning renewable hardware dominance into control over future energy networks.
Dominance in BESS
A 2024 International Energy Agency report describes Europe’s near-total reliance on Chinese battery storage systems (BESS), where China controls “almost 85% of battery cell manufacturing capacity” and “90% of cathode and 98% of anode active material global manufacturing capacity.” Europe holds about 7% of battery cell manufacturing capacity and is deeply reliant on Chinese supply chains to manage grid stability, as batteries are key to stabilising the grid. For European policymakers looking for energy independence through renewables technology, concentration like this is vulnerable to supply chain disruptions or geopolitical tensions with China.
China’s battery manufacturing has been supported by decades of direct incentives and financial concessions for local firms, with the cost advantage accelerated by state planning, including a 30% cost-reduction target for energy storage by 2025 under China’s 14th Five-Year Plan. Worldwide, over 75% of BESS deployments are reliant on cells from China. While the EU targets 780 GWh of storage capacity by 2030, China’s innovation speed could cement European dependency on Chinese technology and supply chains.
What can we learn from China?
China’s dominance is the result of deliberate government policy: huge state investment, subsidies, and a focus on building a complete supply chain from raw materials to finished panels and batteries. The ability to rapidly innovate, scale up production, and cut costs has made solar affordable worldwide, but has also concentrated supply risk and left other regions scrambling to respond. Meanwhile, Europe continued to rely on cheap fossil fuels and did not implement a clear industrial strategy. Fragmented policies did not help.
The EU’s challenge is whether it can replicate any of these strategies in a political and economic environment that is less centralised and less willing to deploy large subsidies and tariffs. Both may be necessary to move away from the status quo.
