Sun Shines on Europe's Solar Sector in 2023

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The European Union's (EU's) solar sector has reported another record year of installations, but clouds are gathering over the future of the sector as energy prices fall and interest rates soar.

A record 56 gigawatts (GW) of solar was installed in Europe during 2023, up from 40 GW in 2022, marking the third year of annual growth rates of at least 40%. The total EU solar fleet now amounts to 263 GW, up 27% from the 207 GW in 2022. However, industry body SolarPower Europe has predicted that new installations in 2024 will slow to 11% growth - delivering an estimated 62 GW of new solar capacity. "Unfortunately, today's outstanding solar success story could be over soon," according to the European Market Outlook for Solar Power 2023-2027. "Despite impressive achievements until now, solar is reaching a critical juncture at which the further growth path for the lowest cost, most versatile, and most simply deployable power technology will be decided on. It needs to be crystal clear that the extremely fast growth period of the last three years was exceptional, triggered by extreme energy price spikes and the fear of energy supply outages."

Energy prices are now returning to pre-energy crisis levels, which has removed the urgency to install solar, SolarPower Europe stated. The market is also being impacted by an inflationary environment with high interest rates. A large proportion of 2023's growth stemmed from delayed 2022 installations with the final months of 2023 "much quieter than the start of the year."

Walburga Hemetsberger, chief executive officer of SolarPower Europe, said: "Solar has continued to deliver for Europe in crisis with record-breaking installations. Now as solar hits its own turning point, Europe must deliver for solar. We are not yet installing the average 70-GW annually needed to meet our 2030 solar targets. It's clear policymakers can't afford to be complacent for the rest of the decade."

Industrial Info is tracking more than 3,200 active solar projects throughout Europe worth more than US$121 billion. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the report.

Dries Acke, policy director at SolarPower Europe, said: "Fortunately, it's no longer extreme energy prices which are driving solar growth. That does mean; however, the onus is back on policymakers to ensure good investment conditions for solar. 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."

Germany returned to the number one slot in Europe's solar ranking, installing 14.1 GW in 2023, having been temporarily dethroned by Spain in 2022. Germany also now holds the record for the most solar installed by an EU country in one year, taking over Italy's 12 year record of 9.3 GW in 2012. After Germany came Spain (8.2 GW), Italy (4.8 GW), Poland (4.6 GW), and the Netherlands (4.1 GW), rounding out the top five EU solar markets.

The EU rooftop solar market grew by 54% year-on-year, particularly amongst commercial and industrial customers. However, the market share of utility-scale declined by 6% in 2023 for a number of reasons, including delayed auctions, higher grid fees and an inflationary environment. "Permitting and grid connection issues still make life difficult for solar developers in many regions despite EU-level legislation," said SolarPower Europe. "All combined, this means that new utility-scale solar in Europe reached 19 GW in 2023, compared to 16 GW in 2022. By comparison, rooftop solar grew from 24 GW in 2022 to 37 GW in 2023."

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).