The solar PV market of the European Union (EU) had its 3rd consecutive year of a minimum 40% annual growth in 2023, with elevated energy prices early during the year and projects delayed from 2022 boosting installations.
However, SolarPower Europe's (SPE) European Market Outlook for Solar Power 2023-2027 (EMO) sees installations not growing as quick over the next few years.
SPE pegs this year's installations at 55.9 GW, compared to 40 GW in 2022, comprising 19 GW new utility-scale and 37 GW rooftop PV capacity, having gone up from 16 GW and 24 GW last year, respectively.
Installations are led by Germany's 14.1 GW, followed by 8.2 GW in Spain, 4.8 GW in Italy, 4.6 GW in Poland and 4.1 GW in the Netherlands, making up the top 5 markets.
Beyond the top 5, the report writers point at market diversification with 14 countries installing over 1 GW PV this year, up from 10 in 2022.
At the end of 2023, the EU will have a combined 263 GW solar PV capacity that grew by 27% YoY.
While the Russian invasion of Ukraine and the ensuing rise in electricity prices created a sense of urgency to install solar in 2023, the same has declined as electricity prices have come down significantly. Additionally, SPE believes demand for residential solar is also dropping due to high inflation rates.
Recently, the EU Parliament and EU Council reached a provisional agreement for energy efficiency in the building sector that will pave the way for rooftop solar becoming the norm by 2026, but these legislative improvements will still take time to take effect (see 'Milestone' For Renewable Energy Deployment In EU).
Consequentially, in the medium scenario for 2024, authors now foresee the EU solar market growing by 11% only reaching 62 GW, followed by 19% growth in 2025 with 73.8 GW.
While the report's high scenario sees potential for the market to reach an annual 100 GW by 2026, the medium scenario forecasts 84.2 GW with another 93.1 GW in 2027.
Nonetheless, the low scenario factors in protectionist trade measures being pursued to have the potential to slow down deployment 'drastically' along with imminent grid congestion, lower capture prices for developers. It could pull down annual installations to 58.7 GW by 2027, it warns.
"We cannot accept grid connection times of more than 4 years, we cannot allow slow local progress on permitting, we cannot risk trade barriers slowing deployment, nor miss the chance to re-shore European solar manufacturing," stated SPE Policy Director Dries Acke.
SPE CEO Walburga Hemetsberger says the bloc needs to install an average of 70 GW annually to meet the 750 GW solar target for 2030 under REPowerEU (see EU Announces 600 GW AC Solar Target By 2030).
To achieve the target, SPE Executive Advisor & Director Market Intelligence Michael Schmela said the report puts forward several recommendations for EU leaders. These include the following:
It also suggests a series of concrete steps in a Solar for Europe Manifesto to accelerate PV deployment in the bloc and achieve 2030 targets while also setting targets for 2040.
According to the EMO, the 30 GW solar PV manufacturing capacity goal for 2025 is no more feasible; instead, it can be the minimum target achieved by 2030. Although not part of the 30 GW target, it is the inverter production that has reached a capacity of 82 GW within the bloc.
Rest of the supply chain is not enough to meet the 750 GW DC target. Polysilcion capacity has declined by 12% since 2022 due to Norwegian Crystals bankruptcy, while ingot manufacturing fares no better. Wafers have the potential to grow by 2025, but right now its total capacity in the bloc is 1.3 GW that has also been paused by NorSun.
Cell production capacity increased to 2 GW in 2023, up from around 1.4 GW last year, while module production capacity grew by 59% YoY to around 14.6 GW.
The complete report is available for free download on SPE's website.
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