IEA PVPS report on the Netherlands solar market sees its steady growth as a sign of a maturing market
Government support is driving installations here, as is the decentralized PV segment
Grid congestion remains the pet peeve, but the administration is taking steps to address it
The solar PV market in the Netherlands is growing at a sustainable pace after experiencing rapid expansion over the last few years as the Dutch government takes proactive steps to manage grid capacity and circular economy practices, says a new report from the International Energy Agency Photovoltaic Power Systems Programme (IEA PVPS).
This market added 4.4 GW DC of new PV capacity in 2023, with 2.3 GW DC coming from the decentralized segment of less than 15 kW capacity and 2.1 GW DC from the centralized projects of more than 15 kW capacity. The latter segment is supported by state subsidies under the country’s flagship SDE++ program and can be ground-mounted, floating solar or building-mounted systems.
Further categorization shows that out of the new grid-connected capacity in 2023, building applied PV (BAPV) added 2.178 GW DC, building integrated PV (BIPV) contributed close to 100 MW, while utility-scale projects brought in 2.065 GW DC of capacity comprising ground-mounted, floating and agrivoltaic systems.
At the end of 2023, the Netherlands had a cumulative installed PV capacity of 23.9 GW DC, according to the report. In 2022, the annual PV additions totaled 4.77 GW DC, 3.7 GW DC in 2021, and 3.88 GW DC in the year before that. This, according to the report, shows that the country has been observing a steady growth in annual PV installations.
A Dutch New Energy Research report of March 2024 claimed 4.84 GW new PV capacity addition in the Netherlands in 2023, and forecasted 3.9 GW of new additions in 2024 (see Netherlands Installed 4.82 GW New Solar Capacity In 2023).
Decentralized segment main driver
What helps the Netherlands grow at a steady, sustainable pace is the decentralized PV deployment. The country experiences high electricity demand from home-charged electric vehicles (EV), heat pumps, and increasing use of air conditioning in the summer, making solar PV the main driver of the energy transition in decentralized systems as it is accessible to the end consumers.
In the centralized power systems, it is wind that outperforms solar, and most of these installed offshore at the North Sea are connected to the TENNET transmission system. To make use of this infrastructure, the country is seeing a proliferation in hybrid solar and wind parks which again drives PV deployment here.
In terms of regulatory framework, the country has its well-established SDE++ scheme that covers the operational period of a project and compensates the difference between the cost price and revenue.
Smaller systems are backed by net metering, especially in the residential segment. Here, the government deducts the initial 3,000 kWh produced and fed into the grid against the same retail price.
Grid challenges
Nevertheless, prosumers are now looking at self-consumption thus replacing the business case for net metering since the government plans to scrap the arrangement from 2027 (see Netherlands Set To Abolish Net Metering Scheme From 2027). There is increased grid congestion leading to curtailment, which impacts consumer decisions to invest in capital-intensive rooftop solar systems.
“Grid congestion has become not just a problem for the solar sector but for the Dutch society at large and it forces fundamental questions about the new and more decentralised electricity system and prioritization of the available grid connections,” according to the report writers.
The government has noticed this and made attempts to address the issue of grid congestion. For instance, new large-scale solar parks applying for state support under SDE++ are required to prove there is capacity on the grid before they apply. It also encourages local battery storage and advanced grid management techniques to facilitate a more resilient energy system, according to the IEA PVPS report.
Even though the rooftop solar market continues to be the main driver of solar deployment in the Netherlands, the report writers believe more than half of the privately owned houses have already installed solar PV. Therefore, now the challenge lies in greening the building stock over the coming years by renovating the market for business parks, public buildings, rentals and apartment blocks.
Nevertheless, the Netherlands targets to reduce its GHG emissions by 55% compared to 1990 levels by 2030, taking it to 60% with supportive policies with a lot depending on solar PV’s growth. In 2023, solar PV contributed 17% of the total electricity production in the country and the country aims to scale it up to 35 TWh by 2030.
The Netherlands is also taking several other measures to promote PV deployment. Here, value added tax (VAT) on solar is zero. Also, there are innovation programs regarding the circularity and life span of solar panels. In 2023, most PV module manufacturers focused on a circular design with a lower carbon footprint, light-weight panels, and/or BIPV products.
The Netherlands has no solar cell production capacity as of now; however, a 4 GW PV heterojunction solar cell manufacturing plant has received the government’s blessings (see Netherlands Backs 4 GW HJT Solar Cell Factory With €4.2 Million).
Released under task I of the IEA Photovoltaic Power Systems Programme, the report titled National Survey Report of PV Power Applications in the Netherlands 2023 is available for free download on the IEA PVPS website.