Europe’s Solar Shield Is Failing Its Own Industry, Report Warns

The European Union’s flagship industrial policy tool for renewable energy is not working fast enough to stop the collapse of its domestic solar manufacturing sector, according to a new SolarPower Europe report.

The Net Zero Industry Act, designed in part to limit reliance on Chinese equipment by reserving a share of public tender contracts for manufacturers from non-dominant markets, has been adopted by only six EU member states in their renewable energy auctions since the start of 2026. The rest have yet to incorporate the law’s sustainability criteria into procurement rules.

Anette Ludwig, who heads supply chain policy at SolarPower Europe, said the association sees movement in the right direction but described the pace as too slow. Her sharpest concern is a patchwork of national approaches that adds complexity for companies operating across borders.

The problem has been compounded by early results: Italy’s first NZIA-compliant auctions did not deliver the competitive advantages European producers had anticipated, which has dampened enthusiasm among other governments to push ahead with their own quota rules.

Industry groups are now calling for a dedicated financing vehicle — effectively a clean-tech bank — to keep European solar manufacturers viable. Without direct public capital, they argue, retaining even a modest share of the continent’s fast-growing solar market will be nearly impossible as lower-cost imported equipment continues to dominate.

If member states do not accelerate implementation, the EU risks cementing its position as primarily an import market rather than a manufacturing hub — undermining the strategic ambitions that motivated the Net Zero Industry Act in the first place.

Source: PV-Tech