Outshone By China, Can Europe Make A Solar Comeback Before It's Too Late?

Forbes

28-05-2025

Javier Sanz Rodriguez, Thematic Leader at European Commission backed InnoEnergy
Once a global pioneer in solar technology, Europe now finds itself in a race against time to reclaim a foothold in an industry it helped to create. While China's dominance of solar manufacturing is undisputed, a growing chorus of investors, innovators, and policymakers believes Europe can still rebound—if it acts decisively.
'It's not just about competitiveness anymore—it's about sovereignty,' says Javier Sanz Rodriguez, Thematic Leader for Renewable Energies at InnoEnergy, a cleantech investor backed by the European Commission. InnoEnergy has helped build four industrial unicorns and is currently mobilising €160 billion in cleantech investment by 2030. It is the launchpad behind ventures such as H2 Green Steel and Northvolt, and is now betting big on reviving sovereignty of Europe's solar ecosystem.
Europe's fall from solar manufacturing grace wasn't due to a lack of innovation. 'Europe was leading because market demand and technology leadership coincided,' Sanz explains. 'But when demand outpaced domestic supply, China became the easy solution.'
From Berlin, Felix Krause, Managing Partner at Vireo Ventures, offers a complementary view: 'Indeed, Europe was once a leader in solar manufacturing,' he says. 'However, continuous reliance on cheap fossil fuels from countries like Russia, a lack of cohesive industrial strategy, and fragmented policies hindered Europe's ability to maintain its competitive edge.'
In contrast, China charted a deliberate industrial course, pouring more than $50 billion into scaling its solar PV capacity—ten times more than all EU countries combined. It vertically integrated its supply chains, slashed costs through massive economies of scale, and captured the market.
'This allowed China to rapidly scale production and drive down costs, effectively outpacing European manufacturers,' Krause adds.
TOPSHOT - A view shows photovoltaic solar pannels at the power plant in La Colle des Mees, Alpes de ... More Haute Provence, southeastern France, on April 17, 2019. - The 112,000 solar panels cover an area of 200 hectares with a total capacity of 100MW. (Photo by GERARD JULIEN / AFP) (Photo credit should read GERARD JULIEN/AFP via Getty Images)
The urgency to act, both Sanz and Krause agree, stems from more than just market logic. It's about resilience and autonomy in an era of geopolitical volatility.
'In the current political climate, Europe must urgently strengthen its energy resilience,' says Krause. 'Historically, we relied heavily on oil and gas imports, but these sources have proven to be unreliable and geopolitically risky. Now, the focus must shift to establishing independent energy production as the basis for democracy, independence and freedom.'
Sanz echoes the sentiment. 'If we don't act now, we risk losing not just our competitiveness, but our ability to meet climate goals on our own terms.'
The good news? Europe still leads in early-stage innovation. Startups like NexWafe are rewriting the rules of solar wafer manufacturing with processes that are not just more efficient, but more sustainable.
'NexWafe introduces a new approach to silicon wafer production,' says Sanz. 'Their epitaxial process eliminates energy-intensive steps, cuts energy consumption by 40%, reduces silicon waste by 90%, and lowers CO₂ emissions by up to 70%.'
It's a breakthrough that could significantly reduce costs and restore a competitive edge to European manufacturers. But innovation alone isn't enough. Europe must scale these technologies, fast.
Circularity is another frontier where Europe can lead, especially with its unique mix of strong climate regulation, early-stage innovation, and largescale market demand. The EU's Waste Electrical and Electronic Equipment, WEEE, Directive, for example, mandates responsible recycling of electronic waste, including solar panels. This is creating new opportunities to extract and reuse valuable raw materials, lessening Europe's reliance on external sources.
One company, ROSI, is turning this mandate into industrial capacity. With facilities in France and expansion plans in Germany and Spain, ROSI is recovering high-purity materials like polysilicon from decommissioned panels and production waste.
'These materials can be reintegrated into the value chain,' Sanz explains. 'This is about more than sustainability—it's about supply chain resilience.'
To scale up manufacturing and compete with Asia's giants, Europe needs to pool resources and expertise. Both Sanz and Krause agree that strategic joint ventures and cross-border collaborations are vital.
'Joint ventures enable rapid scale-up and transfer of industrial know-how,' Sanz says. 'They can rebuild capacity quickly, especially in critical upstream components like ingots and wafers.'
Krause is blunt about what's missing: 'If Europe genuinely wants to rebuild its solar industry, it must focus on emerging technologies and new materials rather than attempting to compete directly with the massive economies of scale established in Asia.'
But he sees promise—if the EU can get its act together. 'We need a coordinated European strategy that prioritises investment in research, scales these technologies to market, and fosters long-term industrial partnerships.'
Felix Krause, Managing Partner at Vireo Ventures
When asked what one policy could unlock real momentum, Krause is unequivocal: 'I would implement a clear mandate from the European Commission to transition to 100% renewable energies by 2040.'
Such a commitment, he says, 'would send a strong signal to the market, unlock substantial capital, and attract a massive inflow of talent, companies, and businesses.'
Sanz, meanwhile, believes smarter foreign investment rules could be transformative. 'Reshape the EU's FDI screening policy into a strategic industrial tool,' he says. 'Let it enable the right kind of industrial partnerships while preserving EU control. Full reshoring isn't realistic, but strategic reinvestment is essential.'
He also supports rapid implementation of the Net Zero Industry Act, along with EU-wide procurement policies that favour 'EU-made' technologies. 'Italy and Austria are already offering tax incentives for European-made products. Now we need a continental strategy.'
At InnoEnergy, investment isn't just about ROI—it's about systemic impact. 'We look for projects that reduce emissions and create quality jobs in Europe,' Sanz says.
Beyond capital, the firm provides hands-on support—market access, governance, industrial expertise—to help projects reach scale. 'We're building companies like Verkor, GravitHy, Holosolis, and now SUNWAFE, which will produce ingots and wafers in Spain.'
For Sanz, it's a journey rooted in pragmatism. 'Cross one bridge after another,' he says. 'That mindset helps me focus on solving what's in front of me, rather than getting distracted by what's down the road.'
His proudest recent achievement? The launch of SUNWAFE. 'It's one of those moments that give you the sense of having a real impact.'
With the right mix of ambition, coordination, and investment, both Sanz and Krause believe Europe can still turn the tide.
'This is not just about technology,' says Krause. 'It's about building the foundations of a future that's democratic, independent, and sustainable.'
And with experts continuing to sound the alarm bells for climate change as a cascading crisis, the time to act is now.