SPE expects EU solar installations to fall to 64.2 GW in 2025, ending its decade-long growth streak
Falling power prices and incentive cuts hit residential solar in several markets, including the top ones like Germany
Lower electricity prices are also impacting corporate interest in solar PPAs as new signings declined by 41% between Q1 and Q2 this year
Utility-scale solar continues to stay resilient thanks to improved auction design, led by Germany
SolarPower Europe’s (SPE) mid-year report forecasts the solar market in the European Union (EU) to experience its 1st dip since 2015, with 2025 installations projected at 64.2 GW, down 1.4% from 65.1 GW in 2024. Decline in the residential rooftop solar segment is the leading driver of the projected downturn.
Residential rooftop solar installations are being delayed even in traditionally strong markets, such as the Netherlands, Austria, Czechia, and Hungary. SPE attributes this projected drop to 2 main reasons: the decline in electricity prices since the 2022 energy crisis and the withdrawal of incentive schemes without effective replacements. Even Poland, Spain, and Germany are experiencing a decline of over 40%.
Corporate PPAs (CPPAs), once a major driver of utility-scale solar, are also losing momentum. With falling electricity prices in 2025, buyer interest in long-term deals has declined, according to the report, leading to a 41% drop in new solar PPA signings from Q1 to Q2, after hitting a record of 7 GW in 2024. On a cumulative basis, CPPAs now exceed 20 GW. Yet, report writers argue that strengthening the policy frameworks is key to reviving the market.
It is the utility-scale segment that continues to stay strong, contributing around half of all new capacity additions this year. Improved auction design is another leading factor for utility solar growth in the EU this year since the bloc awarded a record 20 GW in 2024, led by Germany, the Netherlands, France, and Italy, in that order, according to the EU Market Outlook for Solar Power 2025, Mid-Year Analysis.
The good news is that thanks to the exceptional growth in the previous years – 47% in 2022, 51% in 2023, and 3.3% in 2024 – the market will be able to achieve the REPowerEU target of 400 GW DC/320 GW AC by the end of 2025, exiting the year at 402 GW DC. However, at current levels, the 2030 target of 750 GW DC/600 GW AC will be missed (see EU Announces 600 GW AC Solar Target By 2030).
SPE projects the bloc to achieve only 723 GW in total installations by the end of this decade. Achieving the target will require the bloc to install 69.6 GW annually, according to its estimates.
“The number may seem small, but the symbolism is big. Market decline, right when solar is meant to be accelerating, deserves EU leaders’ attention,” said SPE Deputy CEO Dries Acke. “Europe needs competitive electricity, energy security, and climate solutions. Solar delivers on all of those needs. Now policymakers must deliver the electrification, flexibility and energy storage frameworks that will drive solar success through the rest of the decade.”
Michael Schmela, SPE’s Project Lead and Executive Advisor and Director of Market Intelligence, stressed, “The most pertinent solutions to continue Europe’s solar success story and deliver the continent’s 2030 renewables targets are well-established – rapidly scale-up battery storage and overall system flexibility.”
The complete SPE report is available for free download on its website.
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