Since the outbreak of the Conflict between Russia and Ukraine, Germany wants to wean itself off oil and gas from Russia while speeding up expansion of wind and solar energy. China is the world market leader in both technologies, increasing the influence of Chinese manufacturers.
Take solar power: By 2030, Germany will have installed solar cells with a total output of 200 gigawatts. To do this, Germans will have to install 140 gigawatts of solar cells on their roofs over the next eight years -- almost 17 gigawatts a year. Germany installed 5.46 gigawatts last year and will need to double that. Currently, German-made solar cells installed in Germany have an annual output of 2.8 gigawatts, with the rest (almost half) coming from Asia, mainly China. And many German manufacturers, such as Dresden's Soravat, assemble only components, with solar cells sourced from China.
Before the conflict, Germany relied on Russia for 55 percent of its gas and China for 95 percent of its solar cells. Solar power would be unthinkable without China. "We have seen how quickly the geopolitical situation can change," said Volker Kwashenin, an expert at Berlin's University of Engineering and Applied Economics. Who can guarantee that we will still have mutual understanding with China in five years? If we can no longer get solar cells out of there, our energy transition will be dead."
A decade ago Germany was the world market leader in everything from silicon blocks to batteries to modules. Then China spotted this future market and started supporting production. At the same time, Germany's grid tariff for solar energy has fallen sharply. While German demand has collapsed, China has captured the market. German manufacturers such as SolarWorld went bust.
But now that politicians have decided to expand renewables rapidly, could Germany increase production again, with new, homegrown facilities? Dieter Newhouse, managing director of Solavat, a dresden manufacturer, thinks it is almost too late to do so and that a huge investment will be needed. The same is true for wind power: German and European suppliers remain the market leaders in Germany, but on a global scale they have long been overtaken by China.