By Riham Alkousaa and Andreas Rinke
BERLIN (Reuters) - Two German regional governments on Friday urged the European Union and Berlin to protect the German solar industry from cheaper imported panels, demanding a ban on imports of modules that do not meet the bloc's climate and labour standards.
European photovoltaic panels make up only a small fraction of Germany's market and manufacturers have been complaining about an influx of Chinese panels offered at prices well below manufacturing costs.
After a meeting with solar industry representatives in Berlin, the governments of Saxony and Saxony-Anhalt published a 10-point plan to "save the solar industry" in Germany.
The states called for public tenders or feed-in tariffs to take into account hidden costs in the recyclability, carbon footprint or manufacturing conditions of imported panels.
An economy ministry document seen by Reuters on Thursday indicated the government was examining options including subsidies and trade instruments to shield German manufacturers from a global fall in prices.
On Friday, the ministry said Chinese panels intended for the U.S. and now being redirected to Europe were creating "enormous price pressures" for European manufacturers, and that trade instruments could be used to combat unfair competition.
More than 1,000 shipments of solar energy components piled up at U.S. ports last year under a law banning imports from China's Xinjiang region over concerns about slave labour.
Marius Mordal Bakke, a solar supply chain analyst at Rystad Energy, said around 40 gigawatts of solar panels were now stocked in European warehouses: "We have way more modules than we can actually install in a lot of these regions."
Prices have fallen from around 0.24 euros per peak Watt at the start of the year to around 0.15 due to Chinese oversupply, while European manufacturers are pricing at 0.30 euros, said Zygimantas Vaiciunas of the European Solar Manufacturing Council.
Germany's solar firms are split between installers opposed to trade barriers and manufacturers who favour at least some, said an industry source involved in the talks who asked not to be identified.
"A mini-group and its uncompetitive business model must not be protected at the expense of a stable, profitable and end-customer-focused large-scale industry, said Boris Radke of the solar installer Enpal.
Gunter Erfurt, chief executive of Swiss photovoltaics maker Meyer Burger, said there were smarter instruments than trade tariffs to shore up European solar companies. Germany could for example require a "resilience segment" of European-made modules to be specified in public tenders.
But he said he supported a European ban on a proportion of systems linked to forced labour.
"It is very, very good that there is no blood on the modules," he said.