EU Market Survey on PV Deployment: Record Growth With Subdued Outlook

Industry News – January 5, 2024 | Sarah Hommel de Mendonça

According to the EU Market Outlook for Solar Power 2023 – 2027 published by the European solar association SolarPower Europe, Member States of the European Union (EU) have experienced another record year for PV deployment in 2023. For the third year in a row, the market grew 40 percent or more, to around 56 gigawatts (GW). With 14 GW of new installations, frontrunner Germany was the first EU country to exceed the 10 GW mark. The Italian market doubled to 4.9 GW, while the Austrian market grew by a whopping 114 percent to 2.2 GW. Despite these record figures, SolarPower Europe forecasts much lower growth rates from 2024.

According to the market survey, 2023 was the best year for solar power for 20 of the 27 EU member states, including 14 countries that installed 1 or more GW. The combined installed capacity in the EU now amounts to 263 GW. The energy crisis triggered by the conflict in Ukraine led to a boom for the solar industry. EU Members States and the European Commission have finally recognized the importance of solar energy as a clean and strategic power source and have scaled up their ambitions for PV deployment. The driving force in Europe continues to be the rooftop segment – commercial and industrial (C&I) grew by 4 percent to 33 percent (compared to residential installations (33 percent), and large installations (34 percent).

The largest markets 2023: Germany, Spain and Italy

Germany climbs back to the top of the EU rankings of 2023: The reform of the Renewable Energy Sources Act (EEG) in July 2023 has created improved market conditions with more surfaces available for construction and higher feed-in tariffs. The German market has doubled in size compared to 2022.

The solar nation of Spain took second place with 8.2 GW growth, which means it grew 0.2 GW less than in 2022 (8.4 GW). SolarPower Europe attributes this to lengthy construction permit processes and slowing growth in the private household segment.

Italy is recording record growth, despite restrictions on the Superbonus tax credit scheme in 2023, placing it among the top five solar nations for the first time in a long time. One of the drivers is PV deployment in the C&I segment.

Poland made fourth place with 4.6 GW, which was 0.1 percent more growth than in 2022 (4.5 GW). The switch from net metering to net billing has dampened the demand for residential installations.

With 4.5 GW growth, the Netherlands ranked fifth – and were once again leading in terms of installations per capita (1.280 watts/capita). However, the limited space available will soon hamper further PV deployment in the country.

The next countries in the market growth ranking are France with 3.0 GW, Austria with 2.2 GW, Belgium with 1.7 GW, Greece with 1.6 GW and Hungary, also with 1.6 GW.

Cautious forecasts: eleven percent growth in 2024

With the drop in electricity prices coupled with a difficult investment climate due to high interest rates, the European solar association’s medium scenario forecasts slowing growth in the coming years: from eleven percent in 2024 to 19 percent in 2025, 14 percent in 2026 and back to eleven percent in 2027. Apart from the general economic situation, the energy markets and financial policies, SolarPower Europe’s EU market survey identifies structural barriers that need to be addressed urgently, such as the expansion, digitalization and modernization of the power grids. The increased use of storage systems to balance electricity supply and demand according to the generation profile of solar energy is lagging behind. Regulatory barriers seem to be the reason for this. SolarPower Europe also sees shortcomings on the part of the countries when it comes to construction permit processes for new installations. Especially for large installations, they may take up to several years within the EU-27, in extreme cases up to six years. Even in the residential segment, approvals take too long (up to one year).

In line with the conclusions of the market survey, the European solar association is now calling on member states to do their homework and create a growth-friendly environment for solar energy through different political measures. Because even the National Energy and Climate Plans (NECPs), which the Member States have recently revised, entail lower expansion goals than the RePowerEU plan’s goals of 70 GW of solar power in the EU by 2030.

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