Europe is Turning to Solar
Europe is turning to solar energy as a means of reducing dependence on fossil fuels and meeting emissions reduction targets set by the European Union. The use of solar energy in Europe has been growing rapidly in recent years, driven by declining costs and an increase in government support for renewable energy.
In the 27 EU member states, 41.4 GW of new solar PV capacity were added to the grid in 2022, representing a 47% increase from the previous year. By 2030, the EU expects to have installed 750 GWDC of solar PV capacity, up from the 224 GW total capacity in 2022. This is part of Europe’s ambitious target of becoming carbon neutral by 2050.
Achieving this target will require a considerable ramp-up in annual installations, going from about 28 GW in 2021 to around 70 GW per year in the second half of this decade. Currently, Europe’s largest solar market is Germany which installed 7.9 GW of new capacity. It is followed by Spain (7.5 GW), Poland (4.9 GW), Netherlands (4.0 GW), and France (2.7 GW).
Challenges Facing the EU’s Solar Ambitions
Meeting the lofty ambitions of the “EU solar energy strategy” will not be easy. For one, Europe relies heavily on China for its solar PV panels. China has been dominant in the solar power industry, producing nearly 80% of solar panels and 95% of the world’s wafers. In 2021, the world produced 450 GW of photovoltaic modules. Europe produced fewer than nine. There is also the prickly matter of China’s labour issues as it pertains to ESG standards and human rights, something European consumers are wary of.
Another challenge facing the EU’s solar ambitions is the stability of energy prices. The cost of solar energy has dropped significantly in recent years, but it is still not consistently competitive with traditional forms of energy, such as coal and natural gas. This can make it difficult for solar energy to compete on the open market, especially in countries where fossil fuels are cheaper.
Of concern as well is the fact that almost all of the Europe’s solar PV panels come from China, exposing the region to possible supply-chain hiccups for solar PV products. This lack of supply resilience can seriously hamper the growth of solar in the continent.
Europe also has to solve the inconsistent regulatory frameworks across its member states. Each country has its own set of rules and regulations governing the deployment of solar energy, which can make it difficult for companies to operate in multiple countries. This can create barriers to entry for new players and make it difficult for existing companies to expand their operations.
Lastly, the increase in solar capacity needs to be accompanied by an upgrade in the grid infrastructure. The current grid is not designed to handle large amounts of intermittent energy, such as solar, which can cause problems during periods of low solar output. This can make it difficult for utilities to balance supply and demand, which can lead to power outages and other problems.
According to SolarPower Europe’s (SPE) EU Market Outlook for Solar Power 2022-2026 report, there are five key areas that need improvement if Europe is to meet its solar goals.
- Increasing the number of solar installers
- Standardising regulations across the region
- Improving grid stability
- Ramping up European manufacturing
- Streamlining administrative procedures
“The numbers are clear. Solar is offering Europe a lifeline amid energy and climate crises. No other energy source is growing as quickly, or reliably, as solar,” – Walburga Hemetsberger, CEO of SolarPower Europe.
Turning To Solar
Despite these significant challenges, Europe is determined not to fall behind and is committed to achieving its solar ambitions. As such, the EU and its member states have implemented a range of measures, such as feed-in tariffs and subsidies, to support the deployment of solar energy. Additionally, the EU has been investing in research and development to drive down the cost of solar technology and improve grid infrastructure.
There are geopolitical reasons for moving towards solar as well. The Russia-Ukraine conflict has exposed the risk of relying on imports for critical energy and in particular, Russia’s natural gas. The EU uses gas mostly for power generation, residential heating and industry processes, 40% of which used to come from Russia. So far, increased solar and wind production have somewhat alleviated the problems caused by a limited natural gas supply.
It’s therefore in the continent’s interest to pursue solar and other renewables to combat any such shortages. As such, the EU is rallying to create a viable PV manufacturing industry, with its commissioner stating that the EU will do whatever it takes to succeed. Hence last year’s launch of the Solar Photovoltaic Industry Alliance, which was tasked with securing and diversifying the supply of solar PV products.
In addition to these government initiatives, many European solar companies are ramping up production or planning to do so. Some, like ULSOCO, offer consumers an easier and cheaper path to sun power. Consumers can now install micro ground-mounted solar systems to avoid incurring the substantial upfront costs associated with installing a large on-roof solar system. Products such as these help boost the public’s awareness and understanding of solar energy, thus helping to overcome resistance to its deployment.
It also helps that European consumers are willing to pay premium prices for companies that place labour and ESG concerns at the forefront. All in all, it is safe to say that the future of solar energy in Europe looks bright and we will continue to see even more solar installations across the continent in the coming years. These positive trends are helping create a cleaner and more sustainable energy future for the region as well as providing jobs and economic growth.