France's Solar Strategy Aims to Boost Domestic Production and Reduce Reliance on Chinese Imports

Key Takeaway

• France aims to produce 40% of its solar panels domestically by 2030, investing €2.4 billion in local startups Carbon SAS and HoloSolis SAS.
• The EU plans to reduce dependency on Chinese solar imports through sustainability criteria and the Net Zero Industry Act by end of 2025.
• France's strategy includes reinforcing carbon content criteria for government solar projects, mirroring successful reduction in Chinese EV market share.

France's Solar Strategy

The French government has announced a significant shift in its energy policy, focusing on reducing the reliance on imported solar panels, predominantly from China. Finance Minister Bruno Le Maire, in a recent speech, emphasized the goal to produce 40% of the solar panels used in France domestically by 2030. This move comes as France plans to accelerate its solar farm installations to 6 gigawatts annually. To support this ambitious target, the government will back two French startups, Carbon SAS and HoloSolis SAS, with a combined investment of €2.2 billion ($2.4 billion). These companies may also receive up to €200 million in tax credits this year, along with potential additional financial support.

EU's Clean Tech Defense

The European Union is actively seeking ways to protect its clean technology industry from the dominance of Chinese companies. This concern arises as Europe witnesses a surge in solar panel installations, with Chinese imports significantly undercutting domestic production. The EU's efforts include introducing sustainability and resilience criteria in renewable energy auctions and leveraging the Net Zero Industry Act to incorporate cybersecurity and social requirements in public tenders. By the end of 2025, France aims to implement these measures to lessen its dependency on non-EU countries for solar energy needs.

Addressing Carbon Content

In a move to promote environmental sustainability, France plans to reinforce the carbon content criteria in government tenders for rooftop solar projects starting mid-year. This initiative will also introduce a bonus for using "low-carbon" panels in small ground-mounted photovoltaic projects. If successful, the approach will be expanded to all government-supported solar installations. This strategy mirrors France's efforts in the electric vehicle sector, which significantly reduced the market share of Chinese-made cars in France from 49% in December 2023 to 24% in February 2024.

Global Response to China's Subsidies

The EU has launched investigations into Chinese solar panel manufacturers for receiving market-distorting subsidies. This action reflects a broader concern over China's industrial policies, which have been criticized by international figures such as US Treasury Secretary Janet Yellen. Yellen has voiced concerns over China's subsidies in sectors like electric vehicles and solar panels, planning to address these issues in upcoming talks with Chinese officials. The global community, including the US and Europe, is increasingly wary of the economic distortions caused by China's aggressive subsidy strategy.

Management Quotes

• Bruno Le Maire, Finance Minister of France:

  "Today, almost all panels used in France are imported. Let’s roll up our sleeves to produce in France 40% of the solar panel we use by 2030."