French newspaper Les Echos has revealed that Germany and France are discussing plans to build a large-scale PV modules plant referred to as X-GW.

The idea behind the project, Les Echos says, is to produce European modules that can compete with Chinese panels, whose prices are significantly lower.

Eicke Weber, director of the Fraunhofer Institute for Solar Energy Systems (ISE), confirmed the plans to the French newspaper, saying that ISE was "working on the creation of a consortium with the French National Institute of Solar Energy (INES) and the Swiss Centre for Electronics and Microtechnology (CSEM)" aiming to assist the project.

Skeptics have expressed concerns about the ambitious project due to the global market suffering from overcapacity and several German players filing for bankruptcy in the past year. Weber pointed out, however, that demand for photovoltaic panels, which reached 45 GW in 2013, is expected to reach 100 GW a year until 2020.

"Photovoltaics is a strategic technology for Europe," Weber said, adding that either Europe allows the Asians to take the lead "or governments are willing to help us through credit guarantees, as with Airbus."

French President Francois Hollande has expressed his support for the project and last week outlined his vision of a grand Franco-German company designed for the countries’ energy transition and comparable to the successful aviation industry alliance behind Airbus.

The German government also appears to back the project, according to Les Echos. German Ministry for Economic Affairs and Energy spokesman Tobias Dünow said "the exact content [of the project] will be the subject of intense discussions in the coming days and weeks ahead."

Such discussions, the French newspaper adds, are being held between the governments concerned, the European Investment Bank and the industry.

Should the sides involved decide to establish a consortium to build the X-GW plant, the project would need to fully comply with European Union regulations for a single market. While this is not impossible, the European Commission fundamentally discourages such statist approaches in industrial policy and clearly promotes competition, with the state preferably in the role of a mere regulator.

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