Executive Summary
This report explores how Europe and Taiwan can work together to take advantage of the untapped potential of next-generation solar technologies. With China currently dominating the solar photovoltaic (PV) market, this collaboration offers a compelling alternative for a fairer, cleaner, and more resilient solar future.
I. Next-generation solar’s untapped potential
Solar PV technologies have made clean energy cheaper and more readily accessible than ever before. This has been made possible by China’s innovations in low-cost mass production, due in large part to significant state support and some of the world’s cheapest energy prices. However this success has not come without significant risks. China commands over 80% of the world’s solar PV supply chain, exploiting economies of scale, state subsidies, and minimal environmental oversight. This monopoly exposes global energy security to significant risks, from the threat of supply chain disruptions to critical import dependencies and ethical dilemmas such as forced labour in the Xinjiang Uyghur Autonomous Region.
While China’s dominance in today’s silicon-based solar panels seems secure, next-generation solar technologies offer a chance to level the playing field. Perovskite solar cells (PSCs) and perovskite-tandem cells not only offer higher efficiency rates than silicon-only panels, but also offer up new and exciting innovations. PSCs are lighter weight and more flexible, raising the possibility of integrating solar technology into new areas such as building design, agriculture and wearable technologies. PSC production can also be greener than silicon-only panels, being less reliant on the energy intensive production of polysilicon. Less energy intensive production also means that manufacturing in Europe and other regions with high energy costs becomes more competitive. Taken together, this means that the next-generation solar market is likely to favour high quality, specialised and localised production, creating space for new entrants from outside of China. For Europe and Taiwan, this is a rare opportunity to drive green tech innovation, exploit new business opportunities and secure critical supply chains.
II. Taiwan’s strategic positioning in the PSC supply chain
Taiwan’s strong foundation in semiconductor and electronics enabled its rise in solar cell production, reaching a 20% global market share by 2010. However, intense competition from China has pushed Taiwanese manufacturers to shift toward advanced technologies and specialized markets.
Today, Taiwan is investing heavily in next-generation solar technologies like tandem and PSCs, where it can compete on innovation rather than scale. Taiwanese firms have achieved breakthroughs in PSC efficiency and are exploring applications such as agrivoltaics, building-integrated photovoltaics (BIPV), and portable solar devices. These applications align with Taiwan’s densely populated geography and growing demand for energy solutions tailored to specific environments.
This transition has been supported by government policies, which have imposed restrictions on imports of Chinese solar products and incentivized domestic production. With a vertically integrated supply chain, strong R&D capabilities, and targeted policies, Taiwan is well-positioned to lead the development and commercialization of PSC technologies.
III. Prospects for Europe-Taiwan collaborations in next generation solar technologies
Europe’s solar industry, while once world leading, has suffered from competition with China. Europe’s solar industry is fragmented, focusing mainly on module assembly, with limited upstream production on upstream products like wafers and cells. Despite the EU’s ambitious targets to boost domestic solar manufacturing to meet 40% of its annual deployment needs by 2030, Europe remains heavily reliant on imports from China for the foreseeable future.
Europe’s role in next-generation solar technologies is more promising but still underdeveloped. Europe is host to a range of innovative projects in PSC technologies, and some of its companies lead the world in the commercialisation of perovskite-tandem solar cells. With the right policy support, PSCs could not only help Europe meet its climate and energy security goals, but could also provide major opportunities for European jobs and industry.
Together this raises new possibilities for Taiwan-Europe cooperation in next generation solar. Firstly, Taiwanese firms are increasingly looking to develop R&D collaborations with international partners to boost new innovations in PSC markets. Europe’s strong science and technology research base could make it an attractive partner for such initiatives.
Secondly, Europe could become an important manufacturing site for Taiwanese companies looking to export to Europe. According to our interviews with leading Taiwanese solar producers, firms are optimistic about investing in Europe’s production capacity. Some companies are considering expanding their future business in Europe based on their past experiences and existing networks in Czechia, Slovakia, and Lithuania. Alternatively, Taiwanese companies may seek to license patents to European solar producers. Partnering with European firms to manufacture in Europe can lower carbon emissions while helping Taiwanese firms navigate complex EU regulations on areas such as recyclability.
IV. Fostering closer Europe-Taiwan collaboration
To fully exploit the potential of next-generation solar, further support is needed from the EU, Taiwan, and European governments. These efforts must focus on fostering collaboration and driving innovation.
This paper recommends that European governments should seek to further their R&D collaborations with Taiwan. This can be achieved through the renewal and expansion of R&D funding awards currently offered through some European representative offices in Taiwan. Exploring an Associate Member agreement with Taiwan under Horizon Europe could further unlock mutually beneficial research collaborations. Additionally, the EU should provide clear regulatory guidance and stakeholder consultations to help Taiwanese firms align with market standards, such as environmental and carbon footprint requirements. More broadly, EU initiatives must emphasise next-generation solar technologies as strategic priorities separate to conventional silicon-only solar cells, where the potential for European innovation is much more limited. European governments should also work to simplify permitting processes and offer investment incentives to encourage Taiwanese solar companies to establish manufacturing operations in Europe.
This paper recommends that the Taiwanese government exploit its strategic advantages in next-generation solar by concentrating on high-value applications for PSCs, such as BIPV and agrivoltaics, while leveraging its integrated supply chain and R&D capabilities. Developing industrial parks and public demonstration sites will help scale PSC production and further accelerate innovation. To smooth efforts to enter the European market, Taiwan must also enhance supply chain traceability and ensure that its solar products meet stringent EU environmental and transparency standards. By collaborating closely with European companies to make and sell in Europe, Taiwan can gain a stronger foothold in the European market.
- About the China Strategic Risks Institute
- The China Strategic Risks Institute (CSRI) is a non-profit, non-partisan research institute providing in-depth analysis of the risks and opportunities posed by the rise of the People’s Republic of China. We aim for our research to be accessible to the general public, with recommendations for policymakers, international businesses and NGOs. The CSRI is not a political campaign or lobbying group.
- About the Research Institute for Democracy, Society and Emerging Technology
- DSET stands at the forefront of Taiwan’s democratic values, weaving these principles into the very fabric of our policy research. As emerging technologies reshape the global landscape, they bring a mix of opportunities and challenges that touch every aspect of political and social spheres. We are committed to crafting governance frameworks for technology that not only protect security but also uphold freedom and sustainability. Our mission is to steer through this new terrain, ensuring that innovation serves democracy, and freedom remains at the heart of technological advancement.
