Over the past few years, the Solar Power market of Europe has grown rapidly due to the solar power system’s versatile applications, low cost of solar equipment and components, and strong solar policy, assistance and support. Until 2021, the solar market continued to grow significantly in contrast to the earlier forecast about a huge drop in solar capacity due to the pandemic.
According to what is forecasted by SolarPower, the European Union made a record-breaking solar growth when it managed to install 25.9 GW solar photovoltaic (PV) capacity, connected to the grid in 2021. This solar capacity made a 34% year-on-year leap, which is higher than the 19.3 GW installed in 2020. By this, the year 2021 was recognized as the booming year of the European solar industry, beating the long decade record of 21.4 GW solar capacity installed last 2011.
European Solar Market Report
The Solar Market report (2021-2025) showed that the 27 countries of the European Union managed to deploy 25.9 gigawatts of new solar capacity in 2021, which is higher than the 19.3 GW capacity made in 2020. So far, the solar installations made in 2021 made the year a record-breaking one in terms of solar growth, surpassing the installed capacity of 21.4 GW installed in the last ten years. When estimated, the total solar installations made this year can power approximately 8 million households, considering one gigawatt of electricity can power roughly 300,000 homes.
Moreover, the European Market Outlook for Solar Power 2021-2025 report assumes that the solar market will continue to grow. According to Aristotelis Chantavas, President of SolarPower Europe, they estimated that the EU solar growth will double from 164.9 GW to a CAGR of 327.6 GW in the year 2025. “To fully realize the bright potential of European solar, together with policymakers we must address the remaining barriers to the growth of the industry, whether through permitting of grid bottlenecks.” he also added. Read here.
Solar Power also stated that because of the 34 percent solar capacity growth in 2021, Europe is expected to quadruple its solar energy generation by 2030. The forecast report reveals that there will be a total capacity of 672 GW.
Annual Solar PV Installed Capacity, by country (2000-2021)
In 2021, the 27 European Union states managed to hit nearly 25.9 GW additional solar power capacity, which is linked to their electrical grids, overall it obtained 34% more than the 19.3 GW solar capacity generated in 2020. This growth makes 2021 not only another record year for solar in the EU, but it was also reported as one of the biggest milestones happened in history. It managed to beat the last record-breaking 21.4 GW in 2011.
(source: SOLARPOWER Europe 2021)
Top European Solar Markets in 2021
Despite supply chain constraints and other market challenges caused by the pandemic, solar power in the EU has gained better performance in 2021 compared to 2020. The electricity prices adversely dropped in the first & second quarters of 2020 due to delayed economic activities caused by global lockdowns. Fortunately, the costs of on-grid power prices started increasing again, which improved the solar power performance again. As of now, solar investments have boomed even in a northern country like Finland.
Below are the graphs of top-performing countries in Europe, in terms of the solar PV market.
Top Solar Market in Europe (2020-2021)
In 2021, Germany remained the top solar PV market among other European countries. It has an expected 5.3 GW solar capacity, which allocates 8% on-the-year increase. Whereas, the Netherlands is the top-performing country in terms of installations per capita is with 765 W/capita, a huge leap of 42% from 2020.
(source: SOLAR POWER Europe 2021
Top Solar Market in Europe (2020-2024)
(source: SOLARPOWER EUROPE 2020)
Based on the report, Germany still remains the solar market leader in 2021 for getting 5.3 GW. It is believed that for the next coming years, it will still remain on its spot in all three scenarios. Not to mention that the growth of solar in Germany is expected to increase since it was backed by the fast ascent of PPA-based systems.
Meanwhile, Spain, which has a huge PPA project development pipeline will be the second leading European country with the most solar capacity although it still experiences grid constraints. The third spot will be given to the Netherlands because of its thriving solar market that is supported by a huge solar incentive scheme.
However, it was depicted that France and Italy, other major markets with major growth plans, may surpass the Netherlands for overcoming their bureaucratic challenges. Poland is also expected to grow significantly for the next coming years, not to mention that it’s already included in the top five markets.
European Solar Capacity Pipeline in 2021, by country
Last August 2021, Europe made a solar power project pipeline of more than 130 gigawatts. Spain led the region by gaining a large portion, with planned additions of over 51.4 gigawatts. It was followed by Greece with some 23.5 GW of solar power capacity pipeline.
(source: Statistica 2022)
Highlights of Europe’s Solar Generation in 2021
- In June and July 2021, Europe’s solar power generation achieve 10% of the total electricity shared, hitting its new high record. The total electricity production was generated by 27 European countries. According to Ember’s data, these countries produced almost 39 terawatt-hours (TWh) of solar power which is way higher than the generated 10.9 TWh in 2018.
- As the deployments of solar panels across the region increased, eight European countries managed to set new records where Spain and Germany, being the top producer of solar power.
- According to Ember data, Germany still remained the top country with the most significant share of solar production in the region. From 11.5 TWh it raised to 13.4 TWh, obtaining 17% of the total electricity production in the country during the summer season in 2021.
- Whereas, for more than four years, Spain maintained the fast-growing country spot in terms of solar power production. In fact, it managed to double its solar capacity production from 3.1 TWh in 2018 to 6.4 TWh in 2021. This huge growth made the 16% of total electricity produced in Spain in 2021.
- The second spot for the largest solar generation growth in the country over the forecasted periods is owned by the Netherlands gaining nearly triple of its solar production from solar PV panels, accounting for 3.2 TWh and upgrading Netherlands’ overall power production share by 10% to 17%.
- Italy is recognized as the third leading solar power producer in 2021. However, unlike the top one and two countries, Italy only showed minimal growth over the same period, achieving nearly 6 TWh, from 5.7 TWh in 2018.
- Germany is still the leading European country in terms of huge growth in the solar energy market in 2021 obtaining a newly solar capacity installed of 5.3 GW, followed by Spain with 3.8 GW, the Netherlands with 3.3 GW, Poland with 3.2 GW and France having 2.5 GW solar capacity. In the 10 leading solar markets, there are only 2 countries, Denmark and Sweden that managed to hop in the list replacing Belgium and Portugal.
- In 2019 and 2020, the supply of solar power in the 27 European countries increased by an average of 14 TWh per year. Based on the report, this growth in solar capacity is expected to continue in 2021. Also, the target capacity should be double to 30 TWh annually to achieve the 2030 climate targets.
European Union Solar Market Prospects
The solar market of the EU experienced adverse market conflicts and issues in 2020 but it surprisingly managed to gain positive growth. This growth positively impacted the solar market in 2021, hitting a record-breaking solar performance.
2021-2024
According to the Medium Scenario report, the positive solar growth trends that have been experienced in 2020 and 2021 will continue to improve. The forecast assumed that in the next four years, the solar market will become stronger, with a new annual additional capacity reaching 27.4 GW in 2022. Although it is expected to experience a minimal drop in growth rates in 2023 and 2024, deployments of solar are expected to gain 30.8 GW in 2023 and 35.1 GW in 2024.
(source: SOLARPOWER Europe 2020)
The solar PV market scenario report divides the next coming 4 years of the Medium Scenario into 2 phases. The first one includes the catch-up phase presenting the construction of those delayed or cancelled solar projects due to the pandemic but were continued upon receiving new solar incentives. This period gets 20% plus growth and will be followed by a more moderate phase in 2023 and 2024 obtaining a 13-14% growth period. The solar demands for these two years will mostly come from energy companies, investors and businesses, as well as residential consumers planning to gradually switch to cleaner energy sources.
Moreover, the report also shows the Low Scenario and the High Scenario, whereas the Low Scenario, modelled on major EU solar markets cutting solar assistance and implementing policies that will possibly cancel key business models, expects a gradual decrease in solar demand in 2021, growing only to 19.8 GW in 2023. Meanwhile, the High Scenario depicted an additional 28.8 GW capacity in 2021 reaching 45 GW new solar installations in 2024.
Also, it was revealed that the leading 10 European solar markets are assumed to install 98.5 GW from 2021 until 2024 in the most probable Medium Scenario, 55.1 GW in the Low Scenario and 130.7 GW in the High Scenario.
2022-2025
(source: SOLARPOWER Europe 2020)
The European Market Outlook’s PV market scenarios for 2022 to 2025 reveal consistent, two-digit annual growth rates (AGR) which are slightly higher than in the previous edition (2021-2024). For the Medium Scenario, it was forecasted that there will be 18-20% growth rates higher than the 16-17% growth rates last year. This growth will be gained by adding around 162.7 GW, reaching 327.6 GW by the end of 2025.
It only means that the solar power growth rate in Europe will double within that four years from its current capacity of 164.9 GW. In addition, it is also expected that the member states’ solar targets with a combined 335 GW capacity in their 2030 National Energy Climate Plans (NECPs) will be obtained five years early in most likely market scenarios. Furthermore, the High Scenario depicts that the EU will reach a total solar capacity of 371.5 GW in 2025. On the other hand, the Low Scenario assumes that there will be an additional 105.2 GW capacity to be added to reach a 270 GW solar capacity target by the end of 2025.
With all these targets, SolarPower Europe still looks forward to European Commission and all European states to propose more ambitious capacity targets for the solar industry. According to the forecast, by the end of 2030, Europe is expected to generate a solar capacity of nearly 870 GW across the region. It is believed that by the end of 2050, the country’s ultimate goal concerning climate neutrality will be achieved as well as the 1.5°C temperature target in Paris. The crucial foundation for this path is an EU renewables target of at least 45% for 2030.
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