- PwC Germany’s whitepaper on German solar energy market reflects on the need challenges and opportunities the technology offers the country
- For Germany to overcome its reliance on Russian fuels, it needs to accelerate the expansion of solar energy, increasing it by 7% annually by 2040
- This could translate into annual market volume of €5 billion to €7 billion for Germany by mid-2020s and go up further
- The country needs to ensure a diversified and reliable supply chain to bring down costs and achieve the targeted capacity additions
Solar PV will become a major source of electricity production in Germany by 2040 when it accounts for the country’s 40% power generation capacity, which requires it to install up to 50 million PV modules annually with an average rating of 440W, according to a whitepaper by PricewaterhouseCoopers (PwC) Germany.
Titled The Solar Revolution, the whitepaper expects to see solar electricity generation over the next 2 decades increasing by 7% annually. “Germany will have to massively speed up its capacity addition of all types of solar PV installations with some years over 22 GW new installations planned,” it reads.
It could lead to an annual market volume of €5 billion to €7 billion by mid-2020s in Germany for solar PV modules. Throw in other components of a solar system as inverter, cabling, mounting systems or transformers and the numbers will only go up.
However, achieving these targets also needs a sustainable and reliable supply chain which in Germany’s case is even less diversified than for coal and gas. Sample this: in 2021, all of European Union (EU) had an annual module production capacity of 8.3 GW compared to 45 GW China’s JinkoSolar alone had back then – a difference of 440%.
Chinese manufacturers dominate the EU solar supply chain in practically the entire value chain, which needless to say, the region needs to tackle at an urgent basis. “With respect to PV modules and other components, Germany‘s supply chains are even less diversified than those for coal and gas with only very marginal local production,” PwC highlights in its key take aways, adding, “Reviving the solar module market could be highly beneficial to energy security, employment and economic growth.”
Currently, Europe is facing a major energy crisis with electricity costs hitting the roof thanks to its long-time strong dependence on Russian gas and coal, with Germany’s being above average. To be able to overcome this over-reliance and accomplish its energy transition, Germany is looking towards renewables especially solar PV, aiming for these to account for 80% of the national mix by 2030, and to 100% by 2035.
Officially, Germany is eying 215 GW cumulative installed solar PV capacity by 2030, and 400 GW by 2040 (see Germany’s Bundestag Clears Easter Package). With this 215 GW, PwC says Germany will represent over 1/3rd of solar PV capacity aimed by the European Union (EU) by 2030, making it a highly attractive market in the long run. However, this comparison is actually not fully correct as the European Commission’ REPowerEU is looking for 600 GW AC PV by 2030, which translates into 750 GW DC, while Germany’s 215 GW is DC based. That means Germany’s EU solar share will still be strongly dominating but would reach less than 29% rather than over 1/3rd of total installed capacity.
PwC’s The Solar Revolution White Paper is for download here.