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EU Market

Outlook

For Solar Power

2021 - 2025

Leading the

way in green

hydrogen.

smartenergy.net

Green Hydrogen Solar PV Wind Power

EU Market Outlook For Solar Power 2021  2025 3

Foreword

Welcome to our EU Market Outlook for Solar Power 2021-2025,

Despite its numerous success stories, solar PV’s near-term potential is often still underestimated in both public

discourse and policy targets. It is only natural that analysts regularly adapt market deployment numbers to

changing business environments. But when it comes to solar, the direction is usually the same: year-on-year

assumptions about solar market developments must be revised significantly upwards, as reality hugely

outshines expectations. Restrained forecasts were understandable at the outset of solar technology, when its

capacity was not fully grasped many years ago. In the present day, however, setting limited expectations for

solar is unjustifiable: Solar is the world’s lowest cost power technology, the most job intensive power generation

source, and the only true versatile power technology that can be applied from small distributed to large utility-

scale applications.

Solar power is our daily business – as the sector’s European representation in Brussels we are looking very closely

at any developments with the mission ‘to ensure that more energy is generated by solar than any other energy

source by 2030’ in Europe.

Our short-term forecasts for the sector have been often too conservative as well. We also did not predict that

solar would maneuver so safely through the pandemic, growing by nearly 20% in 2020. While we learned from

our experience during the first year of the COVID-19 pandemic to show more optimism for the solar sector in

2021, our forecast was still below the estimated 34% growth rate we are seeing now. With newly installed 25.9

GW, 2021 is not only the best year ever for solar in the European Union, it also broke the decade old installation

record from 2011. In fact, solar would have grown even faster in the EU in 2021, if severe material supply

shortages, logistic issues, and consequent product price hikes had not resulted in project implementation delays

across the member states.

The learning: All stakeholders need to be more realistic about solar!

Member states’ targets for solar in their National Energy Climate Plans (NECPCs) add up to 335 GW by 2030,

but it is already clear that Europe will exceed that level much earlier. The most-likely Medium Scenario of our

new market outlook predicts 328 GW of installed solar capacity to be reached in the EU already in 2025. The

Europe Commission anticipates 479 GW of solar by 2030 in its impact assessment for a 40% renewables share

by 2030, but our modelling of the Medium Scenario shows a much higher solar volume of 672 GW operating in

the EU by that time even without further ambitions.

What the EU needs to succeed on its path towards 1.5°C Paris in the most cost-efficient way, according to

scientists, is to boost solar capacity to a total of 870 GW in 2030. In other words, solar has only nine more years

to grow by about 700 GW more than today. The crucial tool to get there is a renewables target of at least 45%

for 2030 in the updated Renewable Energy Directive. The success of solar means that to be more realistic is to

be more ambitious!

WALBURGA

HEMETSBERGER

Chief Executive Officer

CLAIRE COUET

Policy Director

MICHAEL SCHMELA

Executive Advisor

Thanks to our Sponsor Members:

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EUMarketOutlookForSolarPower2021-2025Leadingthewayingreenhydrogen.smartenergy.netGreenHydrogenSolarPVWindPowerEUMarketOutlookForSolarPower2021-20253ForewordWelcometoourEUMarketOutlookforSolarPower2021-2025,Despiteitsnumeroussuccessstories,solarPV’snear-termpotentialisoftenstillunderestimatedinbothpublicdiscourseandpolicytargets.Itisonlynaturalthatanalystsregularlyadaptmarketdeploymentnumberstochangingbusinessenvironments.Butwhenitcomestosolar,thedirectionisusuallythesame:year-on-yearassumptionsaboutsolarmarketdevelopmentsmustberevisedsignificantlyupwards,asrealityhugelyoutshinesexpectations.Restrainedforecastswereunderstandableattheoutsetofsolartechnology,whenitscapacitywasnotfullygraspedmanyyearsago.Inthepresentday,however,settinglimitedexpectationsforsolarisunjustifiable:Solaristheworld’slowestcostpowertechnology,themostjobintensivepowergenerationsource,andtheonlytrueversatilepowertechnologythatcanbeappliedfromsmalldistributedtolargeutility-scaleapplications.Solarpowerisourdailybusiness–asthesector’sEuropeanrepresentationinBrusselswearelookingverycloselyatanydevelopmentswiththemission‘toensurethatmoreenergyisgeneratedbysolarthananyotherenergysourceby2030’inEurope.Ourshort-termforecastsforthesectorhavebeenoftentooconservativeaswell.Wealsodidnotpredictthatsolarwouldmaneuversosafelythroughthepandemic,growingbynearly20%in2020.WhilewelearnedfromourexperienceduringthefirstyearoftheCOVID-19pandemictoshowmoreoptimismforthesolarsectorin2021,ourforecastwasstillbelowtheestimated34%growthrateweareseeingnow.Withnewlyinstalled25.9GW,2021isnotonlythebestyeareverforsolarintheEuropeanUnion,italsobrokethedecadeoldinstallationrecordfrom2011.Infact,solarwouldhavegrownevenfasterintheEUin2021,ifseverematerialsupplyshortages,logisticissues,andconsequentproductpricehikeshadnotresultedinprojectimplementationdelaysacrossthememberstates.Thelearning:Allstakeholdersneedtobemorerealisticaboutsolar!Memberstates’targetsforsolarintheirNationalEnergyClimatePlans(NECPCs)addupto335GWby2030,butitisalreadyclearthatEuropewillexceedthatlevelmuchearlier.Themost-likelyMediumScenarioofournewmarketoutlookpredicts328GWofinstalledsolarcapacitytobereachedintheEUalreadyin2025.TheEuropeCommissionanticipates479GWofsolarby2030initsimpactassessmentfora40%renewablesshareby2030,butourmodellingoftheMediumScenarioshowsamuchhighersolarvolumeof672GWoperatingintheEUbythattimeevenwithoutfurtherambitions.WhattheEUneedstosucceedonitspathtowards1.5°CParisinthemostcost-efficientway,accordingtoscientists,istoboostsolarcapacitytoatotalof870GWin2030.Inotherwords,solarhasonlyninemoreyearstogrowbyabout700GWmorethantoday.Thecrucialtooltogetthereisarenewablestargetofatleast45%for2030intheupdatedRenewableEnergyDirective.Thesuccessofsolarmeansthattobemorerealisticistobemoreambitious!WALBURGAHEMETSBERGERChiefExecutiveOfficerCLAIRECOUETPolicyDirectorMICHAELSCHMELAExecutiveAdvisorThankstoourSponsorMembers:EUMarketOutlookForSolarPower2021-20254Leadauthor:MichaelSchmela,SolarPowerEurope.Projectmanager:RaffaeleRossi,SolarPowerEurope.Marketintelligenceandinternalco-authors:ChristopheLits&RaffaeleRossi,SolarPowerEurope.Externalco-authors::JoséDonoso&AlejandroLabanda,UNEF(ES);PeterMolengraaf,WijnandvanHooff,AmelieVeenstra&NoldJaeger,HollandSolar(NL);PaulinaWojciechowska,PSF,&StanislawM.Pietruszko,PVPoland(PL);MarieBuchet,SER(FR);SteliosPsomas,HELAPCO(EL);ThomasAarestrupJepsen,DSP,&FlemmingKristensen,DPVA(DK).Externalcontributors:PVAustria(AT);APSTE(BG);OIE(HR);SEAPEK(CY);SolárníAsociace(CZ);BaltCapAS(EE);Fortum&Kiwatti(FI);Enerplan(FR);MANAP(HU);ISEA(IR);ItaliaSolare&ElettricitàFutura(IT);SEA(LV);LSEA(LT);ILR(LU);MEEREA(MT);APREN(PT);RPIA(RO);SAPI(SK);ZSFV(SI);SvenskSolenergi(SE).Textediting:BethanyMeban,SolarPowerEurope.Pleaseciteas:SolarPowerEurope(2021):EUMarketOutlookforSolarPower2021-2025.Published:December2021.ISBN:9789464444292Contact:info@solarpowereurope.org.Design:Onehemisphere,Sweden.contact@onehemisphere.seMethodology:SolarPowerEurope’sfive-yearforecastconsistsofLow,MediumandHighScenarios.TheMediumscenarioanticipatesthemostlikelydevelopmentgiventhecurrentstateofplayofthemarket.TheLowScenarioforecastisbasedontheassumptionthatpolicymakershaltsolarsupportandotherissuesarise,includinginterestratehikesandseverefinancialcrisissituations.Conversely,theHighScenarioforecaststhebestoptimalcaseinwhichpolicysupport,financialconditionsandotherfactorsareenhanced.Segmentationisbasedonthefollowingsystemsize:Residential(<10kW);Commercial(<250kW);Industrial(<1000kW);Utility-scale(>1000kW,ground-mounted).SolarPowerEurope’smethodologyincludesonlygrid-connectedsystems.InstalledcapacityisalwaysexpressedinDC,unlessotherwisestated.AllfiguresarebasedonSolarPowerEurope’sbestknowledgeatthetimeofpublication.Disclaimer:ThisreporthasbeenpreparedbySolarPowerEurope.Itisbeingfurnishedtotherecipientsforgeneralinformationonly.Nothinginitshouldbeinterpretedasanofferorrecommendationofanyproducts,servicesorfinancialproducts.Thisreportdoesnotconstitutetechnical,investment,legal,taxoranyotheradvice.Recipientsshouldconsultwiththeirowntechnical,financial,legal,taxorotheradvisorsasneeded.Thisreportisbasedonsourcesbelievedtobeaccurate.However,SolarPowerEuropedoesnotwarranttheaccuracyorcompletenessofanyinformationcontainedinthisreport.SolarPowerEuropeassumesnoobligationtoupdateanyinformationcontainedherein.SolarPowerEuropewillnotbeheldliableforanydirectorindirectdamageincurredbytheuseoftheinformationprovidedandwillnotprovideanyindemnities.Unlessotherwisestated,thecopyrightandotherintellectualpropertyrightsofmarketintelligencedataandresourcesprovidedareownedbySolarPowerEurope.TableofcontentsForeword3Executivesummary5Policyrecommendations61EUsolarmarkets2021101.1.Top10EUsolarmarkets2020inbrief131.2.Prospects2022-2025182EUSolarManufacturing243NECPandEU2030marketoutlook274GW-scalesolarmarkets414.1.Germany434.2.Spain474.3.Netherlands504.4.Poland544.5.France574.6.Greece614.7.Denmark64EUMarketOutlookForSolarPower2021-20255ExecutivesummarySolarpowerintheEuropeUnionhasagaindemonstratedastellarperformancein2021despiteadversemarketconditionsonvariousfronts–fromthecontinuednegativeeffectsofCOVID-19onourdailylives,toPVproductsupplyshortagesandconsequentsolarmodulepricehikes.Asforecasted,demandforsolarpowerintheEuropeanUnionhasgrownsignificantlyin2021.The27memberstatesoftheEuropeanUnionsawaround25.9GWofnewsolarPVcapacityconnectedtotheirgridsin2021,anincreaseof34%overthe19.3GWinstalledtheyearbefore.Thisgrowthmakes2021notonlyanotherrecordyearforsolarintheEU,itwasalsothebestyearinhistory,takingplaceexactlyonedecadeaftertheformerrecordwassetat21.4GWin2011.Thenewrecordnumberis16%higherthanourforecastfor2021inthepreviousEUMarketOutlook,but5%lowerthanindicatedbyourresearchforthelatestGlobalMarketOutlookinmid2021,whenthesupplyshortage-relatedprojectdelayswerealreadyevidentbutnottheextentofitseffectsonsolardeploymentsintheEuropeUnion.Likeinthepreviousyear,GermanyisagainEurope’smajorsolarmarketin2021with5.3GWofnewlyinstalledcapacity,followedbySpain(3.8GW),theNetherlands(3.3GW),Poland(3.2GW)andFrance(2.5GW).In2021,theTop5marketsintheEuropeanUnionhavestayedthesame,andamongtheTop10,thereareonly2newcomersthatarefromnorthernEurope(DenmarkandSweden),replacingtwoestablishedPVmarkets,oneincentralEurope(Belgium),theotherinthesouth(Portugal).In2021,25of27EUmemberstatesdeployedmoresolarthantheyearbefore.TheEU’ssolarpowergenerationfleetincreasedby19%to164.9GW,from139GWin2020,whengrowthwasalsointhetwo-digitlevel,butat16%alittlelower.TheEuropeanUnion’ssolarpowerplantportfolioisstilldominatedbytwocountries–Germany(59.9GW)andItaly(22GW)operatearound50%ofsolarpowergenerationassetstoday,althoughtheshareisdeclining–in2020,itscombinedsharewas55%.AsimpressiveasGermany’snewlyinstalledannualcapacityanditsoperatingpowerfleetattheendof2021is,whenitcomestosolarpowerpercapita,theEU’smostpopulatedmemberstateisnolongerNo.1–thathonournowgoestotheNetherlands.AnalysisofthesolardevelopmentsinthecontextoftheEUmemberstates’solarNationalEnergyClimatePlans(NECPs)showsthattwocountrieshavealreadymettheir2030NECPtargetsin2021,andoverhalfofEUmemberstateswillmeettheir2030targetswithinthescopeofthisoutlookperiod,bytheendof2025.Formostmemberstates,weagainexpectmorepoweradditionsinour4-yearinstallationforecaststhaninlastyear’soutlook.BackedbytheambitiousannouncementfromGermany’snewgovernmenttodoubleitssolar2030targetto200GW,Europe’sleadingmarketwillbecomeevenmorecentraltothecontinent’ssolarsector.Germanyisexpectedtoinstall47.7GWby2025,almostasmuchasweestimateforthethreefollowingsolarmarketstogether–Spain,theNetherlands,andFrance.Thisyear’sEUMarketOutlook’sPVmarketscenarios2022to2025showcontinuous,two-digitannualgrowthratesthatareallslightlyhigherthaninourpreviousedition.TheMediumScenarionowforecasts18-20%growthratescomparedto16-17%levelslastyear,addingaround162.7GW,andreaching327.6GWbytheendof2025.AccordingtoourmodellingoftheMediumScenarioupto2030,thetotalsolarfleetintheEUwillcontinueitsstronggrowthto672GWinthatyear,withtheannualinstallationratereachingover85GW.However,asoutlinedinourpolicyrecommendations(see,p.6),weaskfortheEuropeanCommissionandtheMemberStatesformuchmoreambitionforthesolarsector.By2030,theEUneedstooperate870GWofsolarcapacityacrossitsterritorytoenablethemostcost-efficienttrajectorytowardsclimateneutralityin2050andmeetthe1.5°CParistarget.ThecrucialfoundationforthispathisaEUrenewablestargetofatleast45%for2030.EUMarketOutlookForSolarPower2021-20256PolicyrecommendationsFitforaSolarFutureTheEuropeanUnionismovingaheadtodeliverontheParisAgreement.In2021,theEuropeanCommissionproposedanewregulatoryframeworktotakethecontinenttoa55%reductionofGHGin2030,andachieveclimateneutralityin2050.Withits‘Fitfor55’legislativepackage,theEuropeanCommissionismandatingthecomprehensivedecarbonisationoftheeconomy,deliveringontheEUGreenDeal.Thepackageisafar-reachingsetofnewlegislationandrevampedexistinglegislationissuedintwopartsovertheyear2021.Politicalnegotiationsontheproposedmeasuresareexpectedtobeconcludedbytheendof2022.TheFitfor55packageisonthecuspofdeliveringthenecessarylevelofambitionthatwillcreatetheunprecedentedopportunitytoacceleraterenewables-basedelectrificationforallendusesectors.TheproposalsshouldmaximisethepotentialofatrulyEuropeansolarvaluechain,redevelopingcriticalmanufacturingcapacityofsolarPVcomponentsEurope,whilecreatingover1milliongreenEUjobsby2030.Someofthedriversforthisgrowthincludetheproposed40%renewableenergyusetargetfor2030,whichissettobetranslatedintonationalmeasures.BindingtargetsforgreenhydrogenuseinindustryandtransportwillalsokickstartthecreationofarenewablehydrogenmarketinEurope.Notably,theFitfor55packageissettobecomplementedbyaEuropeanSolarStrategyin2022.ThisreflectsthewidermovetoincentiviseEuropeancountriesandcompaniestostepupambitiononsolarenergyatnationallevelandtotackleremainingbarrierstosolardeployment.Followingthepattern,alreadywecanseethenewGermangovernmentraisingtheirsolartargets.Sowhatisinforthesolarsectorandwhatisstillneededtomaximisetheimpact:1.Climateurgencyneedsbolderambitions.Akeypillartosustaina55%reductionofGHGemissionsin2030istheRenewableEnergyDirective,amendmentshavebeenproposedtoincreasetheoverallrenewableenergytargetfromthecurrent32%to40%ingrossfinalenergydemandby2030.AccordingtoSolarPowerEuropeandLUTmodelling,thisincreasedtargetisstillinsufficienttosettheEUontherighttracktodeliveronthe1.5°Cgoal.By2030weneedtodeploy870GWofsolaracrosstheEUtosetthemostcost-efficienttrajectorytowardsclimateneutralityin2050.Consideringthecurrentmarketgrowthofsolar,whichisexpectedtoreach50GWofannualcapacityadditionsacrosstheEUby2025,ahighertargetiswellwithinreach.SolarPowerEuropetogetherwithleadingscientistsandeightotherenergyandcityassociationsintherenewablesector,haspublishedanopenlettercallingfortheEU’s2030renewableenergytargettobeincreasedtoatleast45%renewablesintheEU’sfinalenergydemand.2.Fasterpermittingtimesandpermittingbestpracticestosupportmoresolarprojects.Increasingsolardeploymentambitionsrequiresgrantingmorepermitsforsolarprojects,anddoingsomoreefficiently.Solarprojectscurrentlyfacesignificantburdensthroughpermittingandland-accessfornewprojects.Permittingproceduresmustbesimplified,standardised,anddigitalised,withauthoritiesensuringappropriatestaffinglevelstotacklebottlenecks.ThealreadyapplicableRenewableEnergyDirectivehasdefinednewrules,butinpractice,itstilltakesbetweenthreetofiveyearstodevelopagroundmountedsolarprojectinEurope,dependingonthecountry.WhilethesectorwelcomestheEuropeanCommission’sproposaltopublishguidanceonpermittingbysummer2022,wemusturgentlypursuecomprehensiveEUMarketOutlookForSolarPower2021-20257implementationofpermittingrulestofacilitatethedevelopmentofprojects.Inparallel,bestpracticefortheimplementationofpermittingrules,orforincreasingpublicacceptanceofprojectsshouldbeidentifiedanddisseminated.3.On-sitesolarcoupledwithstoragetodecarbonisetheEUbuildingstock.Buildingsrepresentabout36%oftheEU’senergyconsumptionandproducearound40%ofthebloc’sgreenhousegas(GHG)emissions.Decarbonisingexistingbuildings,whichrepresentbetween75%and90%ofthebuildingstock,remainsasignificantchallenge.On-sitesolarshouldbemobilisedasakeysolution.Thepotentialofon-sitesolarisyettobefullymaximised–withonly111GWdeployedtoday.TheRecastRenewableEnergyDirective(REDIII)setsausefulindicativebenchmarkonEUbuildingstouseatleast49%ofrenewableenergyby2030.Itmustbecomplementedbytheexplicitexemptionofconstructionpermitsforsolarrooftopsystems,akeybarrierinseveralmemberstates.Inadditiontothis,theimplementationoftheRenovationWavemustfocusonthedeploymentofon-sitesolaranddemand-sideflexibilitysolutions.TherecastEnergyPerformanceofBuildingsDirective(EPBDII)isafurtheropportunitytomainstreamsolarandstorageinallbuildingrenovations.Itshould,ataminimum,ensurethatallbuildingsare‘solar-ready’byrequiringaGHGemissionreductioncomponentinEnergyPerformanceCertificates(EPCs)topromoteintegratedenergyrenovation,andincludeminimumrequirementstodeployon-sitesolarandstorage(MandatoryPerformanceStandards).4.BoostingaRenewableHydrogeneconomyfortheclimatetransitionofhardtoabatesectors.Prioritymustbegiventorenewablehydrogenwhenandwheredirectelectrificationisnotcost-efficientornottechnicallyviable,forexampleforthemaritimesectororaviation.ItwillbeessentialtoimplementtherecastRenewableEnergyDirective(REDIII)proposalfor50%ofthehydrogenintendedforend-useinindustrytobefromrenewableelectricityby2030.Additionally,RenewableFuelsofNon-BiologicalOrigin(RFNBOs)willneedtoaccountfor2.6%oftheenergyusedintransport.AnotherveryimportantsteptakeninthisendeavouristheupdateofthedefinitionofRFNBOs,aswellasofthemethodologytocalculateitsemissionsavings,whichneedtoberobustenoughtoguaranteethattheelectricityusedforitsproductioncomesfromrenewablesources.AsasecondstepintheFit-for-55package,inDecember2021theEuropeanCommissionwillpublishtheHydrogenandGasDecarbonisationpackage.Thosetextsmustintegratethehydrogensectorintothenaturalgaslegislativeframework,andallowforthereplacementoffossilgaseswithhydrogeninacost-effectivemanner.Similarly,itwillbeparamountthatthislegislationfocusesonthescale-upofrenewablehydrogeninthehard-to-abatesectorsbyestablishingafair,openmarketwithstrongcertificationschemes.5.LeveragecorporateprocurementofrenewablestoaccelerateprivatesectorinvestmentstowardsEuropeanGreenDealobjectives.PrivateprocurementofsolarenergymustbemoreactivelypromotedacrossallMemberStates.RecordbreakinglowcostshavemeantthatEuropeanmarketforsolarandhybridsolar-and-windPPAshavereached1.9GWin2021atthetimeofwriting.1However,administrativeandmarketbarriersstillhinderthegrowthofprivateprocurementofrenewableenergyinseveralmemberstates.1RE-Source(2021)https://resource-platform.eu/buyers-toolkit/EUMarketOutlookForSolarPower2021-20258PolicyrecommendationsTheEuropeanCommissionhascorrectlyidentifiedtheissueandhasmadecorporatesourcingakeypriorityfortherevisionoftherenewableenergydirective.Specifically,ithasproposedrequirementsonmemberstatestoactivelypromotetheuptakeofrenewableenergyPowerPurchaseAgreementsintheirmarket,includingthroughde-riskingthemviacreditguarantees.PPArequirementsmustbecomplementedbyguidanceformemberstatesonhowtodevelopframeworkstopromotePPAs,currentlyslatedfor2024.Inadditiontothis,theEuropeanCommissionhasalsointroducedproposalstoensurethatallrenewableenergyproducersareabletoreceiveGuaranteesofOrigin(GOs).Toensurethecorporatesourcingframeworkisfullyfitforpurpose,SolarPowerEuropeisalsoproposingtoimprovethetemporalgranularityandtransparencyofGOs,callingformemberstatestotime-stampGOsatmoreregularintervals,ratherthanannually.6.ProvidethebasisforsolarmanufacturingtoflourishagaininEurope.Anindustrycandevelopsustainablyonlywithacomprehensivevisionofitssupplychain.ThegrowthoftheEUSolarmarket,coupledwiththesustainedEUleadershipinfuturesolarcellstechnologies,opensanopportunitytoreinvestintoasizeablesolarPVmanufacturingcapacity.ThiswillbecriticaltoensureadiversificationofsupplyforEUprojectdevelopers,toincreasethesustainabilityofsupplychains,whilecreatingaddedvalueandhighlyqualifiedjobscontributingtotheEuropeanGreenDeal.Weneedtore-establish20GWofsolarPVmanufacturingintheEUby2025,frompolysilicontomoduleassembly.ThisisthevisionsetbytheEuropeanSolarInitiative(www.europeansolarinitiative.eu),theindustrialalliancelaunchedbySolarPowerEuropeandEITInnoEnergyin2021withthesupportoftheEuropeanCommission.Reachingthatobjectivewillrequireadoptingacoherentstrategy,aimingatde-riskinginvestmentsintonewmanufacturingcapacitieswhileensuringalevel-playingfieldwithglobalproducers.TheupcomingEUSolarStrategy,tobeproposedinsummer2021,andfurtherplannedEUactionstosupporttheresilienceofourcontinent’seconomynextyear,willbeexcellentopportunitiestosetthecoursetowardsthatobjective.7Factoringsustainabilityintobusinessdecisions.ThesolarPVindustryisconstantlylookingatmeanstoimproveitssustainabilityperformanceunderdifferentperspectivesbeyondwhatisrequiredbylaw.SolarPowerEurope’srecentpublicationssuchasSolarSustainabilityBestPracticesBenchmark2andAgrisolarBestPracticeGuidelines3showtheeffortfromthesectortoleadbyexample,takingintoaccountsocialandenvironmentaldimensions,includingbiodiversitypreservation,localacceptance,circularityandsupplychaintransparency.AspartoftheGreenDealsustainableproductpolicyagenda,theEUCommissioniscurrentlypreparingregulatorymeasuresaimedatsupportingthePVsector’ssustainabilitycredentials,notablywiththeEcodesignDirectiveandtheEnergyLabellingRegulation.TheproposedregulatorymeasureswillimprovetheenvironmentalsustainabilityofPVproductsbyincreasingtheirenvironmentalperformanceandenergyyieldandreducingtheoverallenvironmentalfootprintoftheproductsplacedontheEUmarket.Thepolicymeasuresareplannedtobeadoptedatthebeginningof2023.2SolarPowerEurope(2021):SolarSustainabilityBestPracticesBenchmark.3SolarPowerEurope(2021):AgrisolarBestPracticeGuidelines.8EUMarketOutlookForSolarPower2021-202598.Addressgridbottlenecks&theflexibilitypotentialofsolarprosumers.Theavailabilityofsufficientgridcapacitytoconnectnewprojects,inparticularinthelowvoltagegrid,canlimitmoresolardeployment.Tomitigatethisrisk,importantinvestmentsareneededinpowernetworks,estimatedat59billioneurosannuallyby2030accordingtotheEuropeanCommissionLong-TermDecarbonisationStrategy,whichisthreetimestheamountinvestedduringthepreviousdecade.SolarPowerEuropeisputtingforwardbestpracticesingridplanningandgridconnectionpracticesasmemberstatesimplementtheCleanEnergyPackagerules.SolarPowerEuropehasworkedtoreflectthisapproachintheTEN-ERegulation,whichregulatestheuseoftheEUfundingforenergyinfrastructure(CEF-E).Systemoperatorsmustbeincentivisedtodeploysmarttechnologiesoruseflexibilitysourcesthatcanalleviatetheneedforgridreinforcements.Deployingtherightframeworktounlockflexibilityresources,throughstandardsforlocalflexibilitymarketsandanupdatedapproachtonetworktariffsaresolutionstothesechallenges.Solarprosumersalsorepresentanuntappedflexibilitypotentialtocompensateforsupplyanddemandimbalancesorcongestionsinthedistributiongrid.Theycanoptimiselocalsolargenerationbysynchronisingitwithenergyconsumptionpatternsandavoidingtransmissionlosses.Tailoringtheenergysystemofthefuturetothemisthereforekeytosupporttheintegrationofsolar,whilecreatingfuture-proofrightinvestmentconditionsforrooftopsolar.9©IBCsolarSolarpowerintheEuropeUnionhasagaindemonstratedastellarperformancein2021despiteadversemarketconditionsonvariousfronts–fromthecontinuednegativeeffectsofCOVID-19onourdailylivestoPVproductsupplyshortagesandconsequentsolarmodulepricehikes.Unlikein2020,whenelectricitypriceshaddroppedinthefirsthalfoftheyearduetolowereconomicactivitiesduringthefirstEUCOVID-19lockdowns,in2021electricityspotpriceshadjumpedtonewheights,improvingsolarpower’sveryattractivebusinesscase.Now,eveninanortherncountrylikeFinland,solarinvestmentsmakesensealsoinaveryhighinterestrateenvironment(seeFig.1).10FIGURE1PVLEVELISEDCOSTOFELECTRICITY(LCOE)INFIVEEULOCATIONS,2020-2050010203040506070Utility-scale100MWpPVLCOE(EUR/MWh)2020electricityspotpricesAdditionalPVLCOEwith10%nominalWACCH12021electricityspotpricesAdditionalPVLCOEwith7%nominalWACCAdditionalPVLCOEwith4%nominalWACCPVLCOEwith2%nominalWACC202220202022202020222022202220202022202020252025202520252025203020302030203020302040204020402040204020502050205020502050FinlandGermanyFranceItalySpain:Thereferencespotmarketpricefor2021isforJanuary-Juneonly.Wholeyear2021averagewillbeconsiderablyhigher.SOURCE:Vartiainenetal.(2021).©SOLARPOWEREUROPE2021EUMarketOutlookForSolarPower2021-2025EUsolarmarkets20211©AlightEUMarketOutlookForSolarPower2021-202511Asforecasted,demandforsolarpowerintheEuropeanUnionhasgrownsignificantlyin2021.The27memberstatesoftheEuropeanUnionsawaround25.9GWofnewsolarPVcapacityconnectedtotheirgridsin2021,anincreaseof34%overthe19.3GWinstalledtheyearbefore(seeFig.2).Thisgrowthmakes2021notonlyanotherrecordyearforsolarintheEU,itwasalsothebestyearinhistory,takingplaceexactlyonedecadeaftertheformerrecordwassetat21.4GWin2011.WhiletheformerpeakendedthefirstEuropeansolarboomphase,markingthestartofaseveralyear-longmarketslumpinthecontextofasolarenergymarkettransitionphaseawayfromtraditionalfeed-intariffstonewincentivesandmarketmodels,thenewrecordisconsideredonlyanothermilestonetowardsmuchhigherannualinstallationlevelsinthecomingyears.Thenewrecordnumberis16%higherthanourforecastfor2021inthepreviousEUMarketOutlook,but5%lowerthanindicatedbyourresearchforthelatestGlobalMarketOutlookfromJuly2021,whenthesupplyshortage-relatedprojectdelayswerealreadyevidentbutnottheextentofitseffectsonsolardeploymentsintheEuropeUnion(seeBox1,p.12).FIGURE2EU27ANNUALSOLARPVINSTALLEDCAPACITY2000-2021051015202530GW2000200120022003200420052006200720082009201020112012201320142015201620172018201920202021e34%108%56%37%15%25.9GermanyNetherlandsSpainPolandFranceItalyHungaryDenmarkGreeceSwedenRestofEU27©SOLARPOWEREUROPE20211EUsolarmarkets2021/continuedEUMarketOutlookForSolarPower2021-202512Box1:LookingbackandforthWhenwepublishedourpreviousEUMarketOutlookinDecember2020,wedescribedtheEUsolarsectorasresilient,despitetheeffectsoftheCOVID-19pandemic.Contrarytopreviousexpectations,in2020,themarkethadnotdecreased,butevengrownnotablyby15%fromthepreviousyear.Wehadreviseddownwardsourexpectationsfor2020comparedtoourEMO2019butincreasedtheforecastsforallyearsbetween2021and2023.IntheEMO2020,ourMediumScenarioassumed23%growthto22.4GWfor2021and22%growthto27.4GWin2022,beforedemandwasanticipatedtogetbacktolowtwo-digitlevels–with13%in2023and14%in2024,asthenextclimate-relevantEUobjectiveswerefaroff,in2030.Inthisyear’sedition,wesignificantlyuppedourforecastforallyears,thankstoastrongoutlookforsolaracrossEuropeandimprovednationalpolicyconditions,aboveallinGermanythankstoanambitiousnew2030solartarget.OurMediumScenarionowforecasts25.9GWin2021,whichmeans16%higherdemandthanwhatweforecastedlastyear(seegraph,leftpart).Theincreasedforecastfor2022isalsohigh,atover10%,butsomewhatlowerthanintheotheryearsunderscrutiny,asweexpectthecurrentPVpricehiketolastforseveralmoremonths,andhaveanimpactonnextyear’scapacityadditionsaswell.FuelledbyimprovedpolicyframeworksinGermanyandothercountries,andnomalisedpricelevels,weareveryupbeatfor2023and2024,nowprojecting25%and27%higherdeploymentsthaninourEMO2020,whichwouldresultinnewlyinstalledcapacitiesof38.5GWand44.6GW.Asaresultoftheupwardrevisiononannualinstallationforecasts,cumulativecapacityprojectionshavealsogrowninalltheobservedyears(seegraph,rightpart).Ourexpectationfortotalinstalledcapacityin2021is3%pointshigherthaninourEMO2020,whilein2024iseven10%pointshigher,with25GWmorethanweexpectedlastyear.©SOLARPOWEREUROPE2021FIGURE3COMPARISONMEDIUMSCENARIOEMO2021VS2020050100150200250300350GWEMO2020Negativechange-%%PositvechangeEMO20212022Cumulative20232024202520212022Annual202320242025202116%10%25%27%3%4%7%10%EUMarketOutlookForSolarPower2021-202513largerrooftopself-consumptionsystemstoforcethissegmentintoatenderscheme.Inconsequence,theGermanmarketthatgrewbyaround1GWperyearbetween2017-2020,isestimatedtohavegrownbylessthanhalfagigawattor8%in2021.SpainhasmaintainedthesecondrankinEurope,afterinstallinganestimatedcapacityofaround3.8GWin2021,slightlyupfromaround3.5GWinthepreviousyear.Nearly3GWwasrealisedfromPPAbasedsystemsoutofagiganticpipelineunderdevelopmentinSpain.ThismakestheSouthernEuropeancountryprobablytheworld’slargestmarketforsubsidy-freesolar,butitalsodemonstratesthatgridconstraintscanbeamajorburdenforrapiddeploymentoflargesolarvolumes.The2.9GWofsolarpowerplantsallocatedintwoauctionsin2021willbemostlyinstalledin2023.TheSpanishself-consumptionrooftopmarketisonlybeginningtoemerge,asthecountry’sformer‘suntax’hadmadeinvestmentsinthatsegmentimpossible.However,theSpanishRecoveryPlanconsidersPVrooftopsakeymeasurefortheenergytransition,andinJune2021,thegovernmenthasreleased450millionEURtoitsregionsforinvestmentsinself-consumptionsystems.1.1.Top10EUsolarmarkets2020inbriefTheTop5marketsintheEuropeanUnionhavestayedthesame,andamongtheTop10,thereareonly2newcomersthatarefromnorthernEurope(DenmarkandSweden),replacingtwoestablishedPVmarkets,oneincentralEurope(Belgium),theotherinthesouth(Portugal).Likelastyear,GermanyisagainEurope’smajorsolarmarketin2021.Itconnected5.3GW,comparedto4.9GWtheyearbefore.TheEU’slargesteconomyhaslargelyheldtheNo.1positionsincethestartofthiscentury.Afteraconsolidationphasefollowingthefirstfullfeed-intariffbasedEuropeansolarboom,Germany’ssolarsectorhasbeenexperiencingasecondboostasof2018duetoacombinationofself-consumptionwithattractivefeed-inpremiumsformedium-tolarge-scalecommercialsystemsandauctionsforsystemsupto10MW,andatriedandtestedregulatoryschemeontheonethehand;andsolar’ssteadilyimprovingcostcompetitivenessontheother.Theyear2021wascharacterisedbyarevisionoftheFeed-inLaw(EEG)inJanuary,whichhasmadeinvestmentsinresidentialandsmallcommercialsystemsmoreattractiveafteraself-consumptionlevywaseliminatedbutputafinancialburdenonFIGURE4EU27TOP10SOLARPVMARKETS2020-20210123456GW20202021eGermanyNetherlandsSpainPolandFranceItalyHungaryDenmarkGreeceSweden5.33.83.33.22.51.61.20.80,80.74.93.52.92.50.80.50.20.70.60.4©SOLARPOWEREUROPE20211EUsolarmarkets2021/continuedEUMarketOutlookForSolarPower2021-202514ThethirdspotistakenagainbytheNetherlandsafterinstallinganestimated3.2GW,up11%from2.9GWaddedin2020.ThecommercialrooftopmarketremainsthemaindriveroftheDutchsolarmarket.Itssharehasgrownalittleover40%,whilethenet-meteringbackedresidentialsegmenthasseenitsportionslightlyshrinktoaroundonethird,andground-mountedsystemscontinuetocontributearound20%.Aftera110MWprojectwasinstalledin2020,anevenlargersolarparkwith176MWcapacitywasawardedinthecountry’stechnologyneutralSDE++tenderschemeinlate2021.TheDutchsolarmarketcouldhavebeenevenlargerin2021,butthe12GWprojectpipelineisfacingchallengestotimelysecuregridconnectionsandland.Thecountryisincreasinglylookingintomulti-functionalPVapplications,suchasfloatingsolarorsolarcarports.TheNetherlands’maindriversforsolarcontinuetobenet-meteringfortheresidentialandsmallbusinesssegments,whilethecommercial,industrial,andutility-scalemarketsrelyontheSDE++tenderingscheme.AlthoughSDE++wasrecentlyopenedtoCCSandenergysavingprojects,solarstillwonthemajorshareinthefirstroundoftherevisedschemein2021.Polandcontinuestosurprisethesector,increasingitsannualsolaradditionsagain–thistimeby28%to3.1GW,from2.5GWin2020.Thismeans,Polandkeepsthefourthrank.Thecountryisasolar‘newcomer’,installingmorethanaGWin2020forthefirsttime.ThesubstantialincreaseinPVcapacityoverthelastyearshasbeenprimarilyduetoafavourableself-consumptionschemeforprosumers,anet-meteringsystemthatiscomplementedwitharebateschemeforresidentialsystems,andreducedVATandincometaxes.Themicro-generationsegmentiscomplementedbyanannuallyheldRESauctionscheme,wheresolarincreasinglyexcelsalsointhesegmentforsystemsabove1MW.Inthelatestauctionfor1MW+systemsinJune2021,solarwasawarded1.2GWcomparedtoabout0.3GWallocatedtowindprojects.EUMarketOutlookForSolarPower2021-202515FranceremainstheEU’sfifthlargestPVmarket.Itinstalledanestimated2.5MWin2021,whichmarksanewrecordaftermorethandoublingsolargridconnectionsfrom0.8GWin2020.Thiscanbeconsideredabreakthroughafteryearsofinstallationlevelshoveringclosetothe1GWlevel,whenlongadministrativeproceduresandchallenginggridconnectionprocesseshindereddeveloperstospeedupinstallations.InQ3/2021,FrancereachedatotalinstalledPVcapacityof12.3GW,whichleavesnearly8GWtogotomeetits20GWtargetsbyendof2023,andover30GWtoreachitsmaximumgoalof44GWby2028.Toachievethesegoals,permittingprocedureswillneedtobefurthersimplified.SolarPVinFranceisprimarilydrivenbyanextensivetenderingschemeforground-mountandrooftopsystems.In2021,thethresholdforrooftoptendershasbeenincreasedfrom100to500kW,makingmoresystemseligibleforfeed-intariffs.However,theprosumersegmentisverysmalltodayasthevalueofself-consumedpowerisunder-valuedandtherightpolicyframeworksmissing.GreecehasmorethantripledannualPVdeploymenttoanall-timerecordof1.6GWin2021,significantlyupfrom0.5GWconnectedtothegridin2020.ExceedingtheannualGWinstallationlevelforthefirsttimetranslatesintothesixthrankforGreeceamongtheEU’ssolarmarkets.Theboomisdrivenmostlybysmallground-mountedPVprojectsupto500kW,forwhichthegovernmentrecentlyextendedthefeed-inpremiumuntiltheendof2022.Greecenowhasasolarprojectpipelineofupto85GW,andmostbigenergystakeholdersinthecountryarelookingintoinvestinginthedomesticsolarsector.NoneoftheEU’sTop10solarmarketshavegrownasmuchasDenmarkin2021.TheEuropeanUnion’slatestsolarshootingstarboostedannualinstalledcapacity6-foldto1.2GW,fromamere0.2GWin2020.Gigawattscalehasbeenachievedalmostexclusivelythroughground-mountutility-scalePVpowerplantsbuiltwithoutsubsidiesforsupplyingsolarpowertocorporatebuyers.Theresidentialsolarmarket,whichblossomedadecadeagowiththehelpoffinancialincentives,installednegligiblePVvolumesinthelowdouble-digitMWrange,asdidtheC&Isegment.TheotherthreeTop10solarmarketsalsoincreasedtheirdeploymentratesin2021,buteachofthemremainedunderthe1GWannualinstallationthreshold.ACOVID-19recoveryfundsupported110%taxbonustriggeredlargerdemandforresidentialandstorageinstallationsinItaly,butseverepermittingissuesanddisappointingauctionresultsforsolarresultedonlyin0.8GWnewlyinstalledcapacityinoneofEurope’slargestandmostsunnyeconomies.Largeinterestinthesmallground-mountsystemssegment,andresidentialandcommercialrooftopinstallationsupto50kW,haveresultedinanotherverygoodsolaryearforHungary,whichhasincreaseditsyearlysolargrid-connectionsto0.7GWin2021.Thoughnotyetcontributingto2021installations,HungarylaunchedanewsolarsubsidyschemeinDecembertoalleviateenergypoverty;theprogrammeisfinancedfromtheEUJustTransitionFund.ThelatestentrytotheTop10isSweden,wheretaxincentivesandgrantshavecontinuedtofueldemand.WithgrowingactivityinthesolarPPAsegment,installationshaveaugmentedtoanestimatedrecordmarketsizeof0.7GWin2021.TheEuropeanUnion’sTop10solarmarketswereresponsiblefor90%oftotalinstallationsin2021,increasingtheirshareby2%points,from88%in2020.Thisisbasedonnewadditionsof23.2GW,comparedto17.2GWin2020.Thedevelopmentisareversalofthetrendseeninthepreviousedition,whentheTop10group’sinstallationsharedroppedby2%pointsin2020overtheyearbefore.Ontheotherhand,theshareoftheTop5hascontinueditsdownwardtrend,claiming70%ofthemarketincomparisonto78%in2020and79%in2019.WhiletheTop5sharestillseemsinitiallydisproportionallylarge,inrealitythesharereflectspopulationandeconomy–thesefivecountriesrepresentaround57%oftheEuropeanUnion’spopulationandnearlytwothirdofGDP.ItmeansthatdemandforsolarhascontinueditsdiversificationtootherEUmemberstatesin2021,whichcanbealsoseeninthenumberofcountriesinstallingmoresolarthantheyearbefore.In2021,almostallEUmemberstatesdeployedmoresolarthantheyearbefore–withonlytwoexceptions,BelgiumandSlovenia.Thiscomparesto2020,whenannualgrowthwasrecordedin22ofthe27EUcountries,threelessthanin2021.However,analysisofthemembersstates’NationalEnergyClimatePlansshowsthatmostEuropeanpolicymakershaveseverelyunderestimatedtheinterestinsolarfromtheirelectorates.Thefirsttwocountrieshavealreadymettheir2030NECPtargetsin2021andoverhalfoftheEUmemberstateswillmeettheir2030targetsbyendof2025(seeChapter3).1EUsolarmarkets2021/continuedEUMarketOutlookForSolarPower2021-202516In2021,theEU-27memberstates’totalinstalledsolarcapacityrankingsofthemajormarketshasfollowedthetrendobservedforannualadditions.TheEU’ssolarpowergenerationfleetincreasedby19%to164.9GW,from139GWin2020,whengrowthwasalsointhetwo-digitlevel,butat16%alittlelower(seeFig.5).WhenlookingatthedevelopmentsoftheEUmarkets’cumulativePVcapacitiesattheendof2021,afewchangescanbeobservedcomparedtotheyearbefore.GermanyhasremainedthelargestoperatorofsolarpowerplantsintheEuropeanUnionbyfar.Withnewannualadditionsof5.3GWtoaround59.9GWcumulativeinstalledcapacitybytheendof2021,thegulftowardthesecondlargestmarkethasagainwidened.ThePVpowerfleetofItaly,whichinstalledaround0.8GWin2021,nowconsistsof22GW.Asinthepreviousyear,SpainkeepsthethirdrankintheEUin2021,afterreachingatotalof17.9GW.Franceisestimatedtoproducesolarpowerfrom13.2GW,whichmeansitstaysthefourthlargestsolarelectricitygeneratorintheEU.ThecontinuedstrongsolargrowthintheNetherlands,hasbroughtthecountryevenclosertoFrance:at13.1GW,itssolarpowerplantcapacityisnowonlylessthan150MWsmallerthanthatofitsFrenchpeer.WhiletheNetherlandshavecrossedthe10GWthresholdforthefirsttime,allotherTop10marketsremainbelowthatlevel.Polandhasreached7.1GWandsurpassedBelgium,whosesolarpowerparkvolumegrewto6.9GW.GreeceandHungaryhavekepttheirrankingsat4.8and2.9GW,respectively.ThelastseatamongtheTop10isnowtakenbyDenmark,aftertheNorthernEuropeancountryalmostdoubleditsPVfleetcapacityinasingleyeartoacumulativecapacityof2.8GW,whichwasenoughtoreplacePortugal.OtherGW-levelEUsolarfleetsattheendof2021areoperatedinAustria,Bulgaria,CzechRepublic,Portugal,RomaniaandSweden,thesamenumberasinthepreviousyear.FIGURE5EU27CUMULATIVESOLARPVINSTALLEDCAPACITY2000-2021020406080100120140160180GW2000200120022003200420052006200720082009201020112012201320142015201620172018201920202021e19%16%9%16%164.9GermanyNetherlandsSpainPolandFranceItalyHungaryDenmarkGreeceSwedenRestofEU27©SOLARPOWEREUROPE2021EUMarketOutlookForSolarPower2021-202517DespiteitsabsolutesolargrowthandoutstandingpositionintheEU,Germanygaveawaysomeofitsmarketshare,nowreaching36%,whichis3%pointslessthanthe39%itownedin2020.Italy’sEUsharedroppedby2%pointsto13%.Together,theEuropeanUnion’stwolargestoperatorsofsolarpowergenerationassetsclaimatotalshareof50%from81.9GWin2021;that’s5%lessthanthe55%basedon75.8GWin2020.The2021shareoftheTop5cumulativemarketshasalsoslightlydecreasedto77%,from80%in2020,whiletheTop10nowclaimthesame92%share.AsimpressiveasGermany’snewlyinstalledannualcapacityanditsoperatingpowerfleetbytheendof2021is,whenitcomestosolarpowerpercapita,theEU’smostpopulatedmemberstateisnolongertheNo1.ThathonournowgoestotheNetherlands,whichtookoverthefirstrankafterreaching765W/capita,42%upfrom539W/capitain2020.Germany’saverageinstalledsolarpowerperpersonincreasedby10%to715W/capita,whileBelgiumkeptitsthirdrankin2021afterimprovingthismetricto596W/capita,upfrom466W/capitainthepreviousyear.AllotherTop10EUsolarmarkethavepercapitainstalledcapacitiesbelowthe500Wlevel,althoughtheaverageforthelastofthisgroup(thistime,Italy)wasliftedto364W/capita,comparedto283W/capitain2020(then,Spain).Insummary,solarshowsanotherstronggrowthyeardespiteadversarymarketconditionscharacterisedbythevirusandsupplyshortages.TheEuropeanUniongrid-connectedcapacitystoodat25.9GWin2021,34%morethantheyearbeforeand16%higherthanourforecastfromthepreviousEUMarketOutlook(publishedinDec.2020).Thesamepatternholdstrueforthecumulativeinstalledcapacities,increasingby19%to164.9GW.DemandinGermanycontinuestodominatetheEUsolarmarket,bothintermsofannualandtotalsolarinstallationsat5.3GWand59.9GW,respectively,butthereisanewNo.1whenitcomestoametricallowingafaircomparison–installedPVcapacitypercapita.InnootherEUmemberstateeverycitizenhasinstalledinaveragemorepowerthantheNetherlands.SOURCE:UnitedNations(2020).©SOLARPOWEREUROPE2021FIGURE6EU27TOP10COUNTRIESSOLARCAPACITYPERCAPITA2021NetherlandsEstoniaGreeceDenmarkMaltaLuxembourgSpainItalyGermanyBelgium1st7th6th5th4th8th9th10th2nd3rd765Watt/capita412Watt/capita465Watt/capita490Watt/capita491Watt/capita405Watt/capita384Watt/capita364Watt/capita715Watt/capita596Watt/capita1.2.Prospects2022-2025Asanotherverygoodyearforsolarcomestoanend,theEUsolarsectorhasgrownbyanestimated34%to25.9GW,whichmeansanall-timehighfortheEuropeanUnion,beatingthedecadeold21.3GWrecordfrom2011.Thecoming4yearsuntil2025willbecharacterisedbyfurtherstronggrowth,accordingtoourMediumScenario.Whileanalystsanticipateinflatedmodulepriceswillreturnto‘normal’levelsinthesecondhalfof2022,itremainstobeseenwhenexactlythiswillhappen.Inanycase,theelevatedmodulepriceswillhavenegativeimpactsoncertainprojectsin2022,andprobablyevenmorethanin2021whendevelopersandEPCshadstillvolumesonhandthatwereorderedatmuchlowerpricelevels,eveniftheactualquantitiesreceivedwereoftenlessthanexpected.However,at16%annualgrowthrates,2022willturnintoanotherrecordyearforsolarinEuropeandthefirsttimethe30GWthresholdwillbereached.WithpricesbacktonormalandGermany’smassivenewplansforsolartogaintractionin2023andforthefirsttimereachinga10GWannualmarketsize,weanticipatea28%growthrateto38.5GWintheEU.Thoughthegrowthrateswillturnmoremoderateinthefollowingtwoyears–16%in2024and11%in2025–thiswillbeenoughtoresultinannualsolardeploymentvolumesabovethe40GWlevel–44.6GWin2024andat49.7GWin2025,thusnearlytouchingthe50GWlevel.SolarPowerEurope’sgrowthassumptionshavepreviouslybeenmuchhigherthanthetargetsformulatedbyEUmembersstatesintheirNationalEnergyandClimatePlans(NECPs);nowthedifferenceisevenlarger.Ifgrowthassumptionsuntil2025areextrapolatedforthecomingfiveyears,totalinstalledsolarcapacityintheEUbytheendof2030willbeabouttwiceashigh(seeChapter3).Indeed,thedriversforsolarinEuropeareonlygettingstronger,fosteringthefoundationformuchfastergrowthinthecomingyearsthanmanydecisionmakersanticipate:•Despitetherecentsolarproductpricehikes,solar’scostreductioncurveisintact–USinvestmentbankLazard’slatesteditionofitsannualLevelizedCostofEnergyReport2021,releasedinNovember2021,showeda3%year-on-yeardecreasetoanaverageof3.25USDcentsforutility-scalesolar,lowerthanforanyotherpowersource.•Alsoin2021,solarwonconsiderablesharesincost-basedtechnologyneutralenergytendersintheEU,suchasinSpain,Greece,Poland.WinningpricesforsolarinGermany’ssolarspecifictenderscontinuedtobeconstantlylowerthaninthewindeditions.1EUsolarmarkets2021/continuedEUMarketOutlookForSolarPower2021-202518©SOLARPOWEREUROPE2021FIGURE7EU27ANNUALSOLARPVMARKETSCENARIOS2022-2025010203040506070GWHistoricaldataLowScenarioHighScenarioMediumScenario2022202320242025201520162017201820192020202125.916%28%16%11%65.835.722.232.3EUMarketOutlookForSolarPower2021-202519•Thelowcostbasedbusinesscaseforsubsidy-freesolarsystemsisincreasinglyspreadingacrossEurope,wherepolicyframeworkspermit.InDenmarkandSpaincorporatesolarsourcinghasalreadyevolvedintoakeydriverforthestronggrowthofthecountries’solarsectors.•Theversatilityofsolarremainsunparalleled,enablingvariousmulti-purposeapplicationsthatmeetquicklyincreasinginterestnowthatsolariscostcompetitive.ExamplesincluderooftopsolarforcarparksallowingdirectEVcharging,andrelativelynewtechnicalsolutionssuchasfloatingsolarorAgri-PVthatpromiseownersofwater/landareastoenterenergyproductionwhilebenefitingfromfurtheradvantagesassolarpanelsofferingshadingfacilities,whichreducesevaporationinwaterreservoirs.•WithmandatorysolarfornewresidentialbuildingsstartinginMay2022inthefirstGermanstate,BadenWurttemberg,andthecountry’snewgovernmenthavingannouncedtocreatelegislationthatwillrequirenewcommercialbuildingstoincludesolar,finallythebreakthroughforbuilding-integratedphotovoltaicsolutionsisexpectedinEurope.Thiswillsignificantlyhelpinwideningsolar’sfeatureofbeinganadd-onpowersourceinthehousingsectorintoanaestheticbuildingmaterial.•SolarPowerEuropehaslistedseveralpolicyasksinthisEMOaspolicyframeworksarekeytounleashsolar’sbenefitstofullysupporttheEuropeanUnion’sclimategoals(seep.6).Eventhoughtheannualadditionsforthecoming4yearsforecastedintheMediumScenarioseemalreadyveryhigh,thereisarealisticchancethatthemarketgrowsfaster(andiftheEUwantstomeetthe1.5°CParistargetitmust).OurHighScenarioprojects35.7GWalreadyin2022andupto65.8GWnewsolaradditionsin2025.Whilethissoundsveryimprobablefromtoday’sview,solarinEuropehassurprisedusalotjustveryrecently,whennewlyinstalledcapacitiesinyearoneofCOVID-19didn’tdropasallsolaranalystsbelieved,butleapedby19%.OurHighScenarioassumessolarturnsintoabigbeneficiaryoftheGreenDeal,withthe2030EUrenewablestargetliftedto45%,Germany’srecentsolartargetdoublingto200GWby2030creatingapulleffectonothermemberstates,andourpolicyasksbeingswiftlyimplemented.Ontheotherhand,theLowScenarioanticipatesdiminishingdemandin2022toavolumeof22.2GW,andgrowingonlyto32.3GWin2025.ThisscenariowasmodelledonmajorEUmarketsimplementingpoliciesthatwoulddisablecrucialsolarbusinessmodels.ItalsoassumesseveretradeconflictswithimportbansandtheEUfailingtofacilitatesignificantsolarmanufacturingcapacitiesalongthevaluechain.SuchanoutcomeisclosetoimpossiblewhenweconsiderthatevenanunprecedentedpandemichadonlylimitedimpactonsolardemandintheEU.Whenobservingcurrentsolaractivitiesandpolicydiscussions,wheretheclimatecrisisisveryhighonmanydecision-makers’agendas,wecanseethelowsolarambitioninmanymemberstates’NECPsareindeedatopicofconcern(seep.27).Thisyear’sEUMarketOutlook’sPVmarketscenarios2022to2025showcontinuous,two-digitannualgrowthratesthatareallslightlyhigherthaninourpreviousedition(seeFig.8).TheMediumScenarionowforecasts18-20%growthratescomparedto16-17%levelslastyear,addingaround162.7GWtoreach327.6GWbytheendof2025.ThismeanstheEUsolarpowergenerationfleetwilldoublewithinfouryearsfromthe164.9GWinoperationtoday.Italsomeansthatthememberstates’solartargetswithacombinedcapacityof335GWintheir2030NationalEnergyClimatePlans(NECPs)willbereachedfiveyearsearlyinourmostlikelymarketscenario.TheHighScenarioseestheEUreachingatotalsolarcapacityof371.5GWin2025,butevenourLowScenarioassumesadditionsof105.2GWtooperatea270GWsolarcapacitybytheendof2025.1EUsolarmarkets2021/continuedEUMarketOutlookForSolarPower2021-202520©SOLARPOWEREUROPE2021FIGURE8EU27TOTALSOLARPVMARKETSCENARIOS2022-2025050100150200250300350400GWHistoricaldataLowScenarioHighScenarioMediumScenario20222023202420252015201620172018201920202021164.918%20%19%18%371.5203.6183.1270.3EUMarketOutlookForSolarPower2021-202521WeareonceagainmoreupbeatonthesolardevelopmentsintheTop10EUmarketsoverthecomingyears(seeFig.9).Formostofthesecountries,the4-yearinstallationforecastsfrom2022to2025(listedintheorderoftheMediumScenarioassumptions)expectagainmorepoweradditionsthaninlastyear’soutlook.Forlong-timemarketleaderGermanytheassumptionswereraisedsignificantly.Withtheambitioussolarplansofthenewgovernment,wenowexceptthecountrytogrid-connect32GWoverthenextfouryearsevenintheLowScenario,whichisasmuchaswehadanticipatedforthesameperiodinlastedition’sHighScenario.ThemuchmorelikelyMediumScenarioforecaststheinstallationof47.7GW,whichisnearly80%higherthanlastedition’sassumptionandalmostasmuchasweestimateforthethreefollowingsolarmarketstogether–Spain,theNetherlandsandFrance.Drivenbyregularauctions,agiganticPPAprojectdevelopmentpipeline,andaquicklygrowingself-consumptionrooftopsegment,Spainissupposedtoinstall18.9GWby2025,about2GWhigherthanbelievedpreviously.Backedbyitslargerooftopmarketandsolar’ssuccessintheregulartechnologyneutralauctions,theNetherlandsisalsoexpectedtoaddabout2GWmorethanthoughtbefore,whichwouldresultin17GWofnewinstallationsinthenextfouryears.Francehasmorethandoubleditsannualsolarinstallationandexceededthe2GWlevelforthefirsttimein2021,indicatingtheknotcouldbeuntiedandamultiplegigawattmarketthenewnormal,whichwouldbeneededtomeetitssolartargets.OursignificantlyincreasedforecastseesFrancegrid-connecting15.1GWsolaruntil2025.WecontinuetoFIGURE9EU27TOP10SOLARPVMARKETSADDITIONS2022-2025SwedenGreecePortugalItalyDenmarkPolandFranceNetherlandsSpainGermanyGW01020304050605.72.76.43.16.83.711.84.310.05.212.96.018.111.020.111.123.912.757.732.1HighScenarioMediumScenarioLowScenario©SOLARPOWEREUROPE2021seealotofsolargrowthopportunitiesforPoland,withanewlyinstalledcapacityof9.7GWoverthenextfouryears,againpartoftheTop5markets.Buttheforecastissomewhatdifficultwithanupcomingchangefromthelucrativenet-meteringsystemasthemainmarketdriverofPoland’ssolarboomtoanet-billingsystem,andutility-scalesystemsfromanewauctionschemeconsideredasthenewpillarofgrowth.TheEU’snewsolarshootingstarisDenmark.Afterauctionshaveopenedthefieldforground-mountsolarintheNorthernEuropeancountry,provingitscostcompetitivenesswhenoutcompetingwindinrecenttechnologyneutraltenders,astrongtrendtoPPA-basedsystemshasbecomeevident,withannouncementsforseveral100+MWsolarpowerplants.Denmarkisexpectedtoinstall8.9GWby2025.Ontheotherhand,Italyisstillcaughtinthewaitinglinetotapitshugesolarpotentialandbuildonitsfirstsolarboomphaseadecadeago.Wesee7.1GWofnewsolarconnectedtotheItaliangridby2025.TheonlynewcomertothelistingoftheTop10solarmarketsinthenextfouryearsisSweden,whereataxincentiveschemehasfuelledtheresidentialsector,andPPAbasedsystemsaremeetingincreasinginterest.OuranalysisseestheTop10EUsolarmarketsinstall138GWfrom2022until2025inthemostprobableMediumScenario,91.9GWinaLowScenarioand173.0GWintheHighScenario.1EUsolarmarkets2021/continuedEUMarketOutlookForSolarPower2021-202522Country2021Totalcapacity(GW)By2025Totalcapacitymediumscenario(GW)2022-2025Newcapacity(GW)2022-2025Compoundannualgrowthrate(%)PoliticalsupportprospectsGermany59.9107.647.716%Spain17.936.818.920%Netherlands13.130.217.123%France13.228.315.121%Poland7.116.89.724%Denmark2.811.78.943%Italy22.029.17.17%Portugal1.56.65.044%Greece4.89.85.019%Sweden1.86.34.637%Belgium6.910.93.912%Hungary3.06.43.421%Austria2.55.42.921%Ireland0.12.82.7120%Bulgaria1.33.72.430%FIGURE10EU27TOPSOLARPVMARKETSPROSPECTSEUMarketOutlookForSolarPower2021-202523AlreadybrightinthepreviousEMOedition,ourupdated4-yearweatherforecastforthe15largestEUsolarmarketshasbecomeevensunnier(seeFig.11).Now,weseeaverysunnybusinessenvironmentforsolarpowerinallbutoneEUcountryinthecomingyears.OnlyforItaly,wecontinuetoseecloudsonthehorizon.Thatmightseemstrange,asthereispoliticalsupportforsolarinRome.AtaxincentiveschemefundedfromCOVID-19recoveryfundshasincreaseddemandforresidentialsolarandbatterystorage.Butthelarge,sunnySouthernEuropeancountryhasagainremainedasub-GWvolumemarketin2021despiteits51GWby2030NECPgoal.Solarhasfailedrepeatedlyinthetechnologyneutraltenders,andpermittinghasalsokeptthePPAsegmentfromtakingoff.BeyondItaly,thereareanumberofissuesthatneedtobeaddressedacrosstheEuropeanUniontofullyunleashsolar’spotential,asexplainedinthechaptersonpolicyrecommendations(seep.6)andourupdatedNECPassessment(seep.27).However,ingeneraltheoutlookforsolarisonlygettingbrighter.Weanticipatethelargest15EUsolarmarketstogrid-connect152.4GWofnewPVcapacityinthecoming4yearsbasedonourmostprobableMediumScenario,comparedto109.6GWinthe2020publishedEMO4-yearforecast.In2025,theEUsolarmarketisexpectedtoalmostdoublecomparedtotoday–49.7GWvs.25.9GW.Germanywillstilldeploymoresolarthananyothermemberstatebutitssharewillbemuchlargerthanin2021–31%vs.20%.ThegrowthassumptionsforGermanyhavechangedsignificantlyduetoitsnew200GWsolartargetin2030.Inthepreviousedition,wehadassumedthatGermany’ssharewouldbe20%in2024.GermanywillbefollowedbytheNetherlands,Spain,FranceandPoland,thesamegrouppresentingtheTop5in2021butinadifferentorder.AlthoughtheTop3willhaveanevenlargercombinedmarketsharein2025thantoday–51%vs.47%,thisonlyduetoGermany’sbigsolarambition.FortheTop5orTop10,theannualsharesaredecreasingovertime,indicatingafurtherdiversificationofsolardemandtomoreEUmemberstates.©SOLARPOWEREUROPE2021FIGURE11EU27SHARESOFTOP10SOLARMARKETSIN2021AND2025RestofEU;10%RestofEU;16%Sweden;3%Poland;5%Italy;3%Portugal;3%Hungary;3%Romania;3%Denmark;5%Greece;3%Greece;6%Italy;5%France;10%France;9%Poland;12%Denmark;6%Netherlands;13%Netherlands;10%Spain;14%Spain;10%Germany;20%Germany;31%49.7GW25.9GW20212025Inthepastfewmonths,wehavesurveyedtheEuropeanUnion’ssolarPVmanufacturinglandscape.WenotonlyaimedatfindingoutthelatestproductioncapacitiesinthemainsegmentsalongthevaluechainintheEU27memberstatesplusNorway4,wealsowantedtogetacomprehensivepictureofthestatusandplansinsolarmanufacturing.EuropehasavibrantandgrowingR&Dandsolarmanufacturingscene–withactiveandnewcompanieslookingatopportunitiestoinvestinthequicklygrowingsolarsectorasthekeytotheEU’scarbonneutralitygoals.Thecompaniesactiveinsilicon,ingot/wafer,cell,moduleandinvertermanufacturingandofferingcommercialproductsin2021aredisplayedonoursolarmap(seeFig.12).AsourrecentlypublishedEUSolarJobsReport2021shows,inverterproductionoffersthehighestjobintensityinthesolarmanufacturingsegment.Today,invertermanufacturersarealsothebackboneofsolarmanufacturingintheEUwithatleast9stakeholdersemployingnearlyhalfofallmanufacturingjobsandatotalproductioncapacityof60GW.Severalofthesecompaniesarealsointernationalleaders,amongthemSMAfromGermanyandFroniusfromAustria.WhenlookingintotheEuropeanUnion’ssolarmodulevaluechain,thelargestmanufacturerisactiveupstream,inthepolysiliconsegment.WackerChemieistheEU’sonlycompanytooperatepolysiliconproductionfacilitieswithacapacityofaround60metrictonsinGermany,whichtranslatesintoover20GWofcell/moduleproducts.Siliconingots&wafermanufacturing,thenextstepinthesolarvaluechainafterpolysiliconproduction,isbarelyexistingintheEuropeanUnion.OnlyonesmallintegratedmoduleproducerinFrancehasfewingot/wafercapacities,whilemostofEurope’s1.7GWwafercapacityislocatedinNorway,wherelowcosthydroenablesproductionatcompetitivecostandlowcarbonfootprint.TheEUishometoapromisingnext-generationwaferingstart-up,NexWafe,whichhasbeendevelopingaprocessthatproducesmuchlesswastethanthetraditionalingot/waferingprocess.NexWafeisplanningtostartconstructionofapilotlineinGermanyin2022andtargets3GWby2025.TheEU’ssolarcellproductioncapacitystandsatonlyaround0.8GWtoday,butseveralcompaniesareplanningtoexpandorenterthatsegment.InGermany,MeyerBurgerhasopeneda400MWfactoryforhigh-efficiencyheterojunctionsolarcellsin2021,followingonEnel’s200MWlineinItaly,whichwasopenedin2020.Bothcompanieshavealreadyannouncedexpansionplans,MeyerBurgerto7GWby2027andEnelGreenPowerto3GW.EnelistheonlycompanysofarthathaswonagrantforasolarmanufacturingprojectfromtheEUInnovationFund’sfirstroundinNovember2021.A100MWcellfactorywithnextgenerationtechnology,basedonsilicon-perovskitetandemcells,iscurrentlybeingbuiltbyOxfordPVinGermany(butitisnotlistedonthemapasotherprojectsthatareintheplanningstages).EUMarketOutlookForSolarPower2021-202524EUSolarManufacturing2©MeyerBurger4ThoughnotaEUmember,wealsoincludedNorwayinthemapduetoitsimportanceinIngots&Waferssegments.BeyondtheEU-27,thereareanumberofotherexistingandplannedsolarmanufacturingprojectsinEurope.EUMarketOutlookForSolarPower2021-202525Mostsolarcellmanufacturers,includingthecompanieslistedabove,produceforinternaluseastheyalsoassemblesolarmodules.Incontrast,mostoftheEU’smodulemanufacturersdon’tmaketheircells,butcurrentlyimportthemfromAsia.Aspuresolarmodulemanufacturingrequiresthelowestinvestmentcostamongthedifferentstagesofthesolarmodulechain,thissolarmanufacturingsegmenthasbeenseeingthelargestactivity,thoughmostlyfromsmallandlocalcompanies,eachwithcapacitiesinthesub-GWrange.In2021,atleast49modulemanufacturershaveoperatedfactoriesintheEuropeanUnion.Nexttosilicon-to-moduleandinvertermanufacturing,theEuropeanUnionisalsohometoworldleadingplayersinotherpartsofthesolarvaluechain,suchastheBalance-of-System(BOS)field,includingfixedmountingstructuresandsolartrackersaswellasprocessingmaterialsandproductionequipmentforcell/moduleproduction.OneGermanPVmodulemanufacturer,Solarwattisevenproducingstationarysolarbatteryenergystoragesystems.ThecoreofEurope’sin-depthsolartechnologyknowledgeisavastandwell-connectedresearchanddevelopment(R&D)ecosystem.Europe’ssolarmanufacturerscanrelyonspecialisedPVresearchinstitutesinseveralcountries,suchasIMECinBelgium,FraunhoferISE&CST,FZJülichandZSWinGermany,CEA-INESandIPVFinFrance,TNOintheNetherlands,andCSEMinSwitzerland.However,astodaythemajorityofsolarproductsintheEUareimported,themanufacturingsectorisverysmallcomparedtoChina.AstheEuropeansolarmarkethasrecentlyenteredanewgrowthphase,andincreasingfasterthanmostanalystshadbeenforecasting,thereisanewwindowofopportunityforadomesticsolarmanufacturingsector.TosupportthemanyindustrialconsortiathathaveputforwardnewindustrialprojectsandarelookingforfinancingtoestablishorexpandproductioninEurope,SolarPowerEurope,inpartnershipwithEITInnoEnergyandwiththesupportofthepartnersoftheSolarManufacturingAccelerator,haslaunchedtheEuropeanSolarInitiative(ESI;www.europeansolarinitiative.eu).Theinitiativecombinesanindustrialplatformthatgathersandstructurestheindustry,andaninvestmentplatformthataimstode-riskandacceleratenewmanufacturingprojects.Theaimistore-establish20GWPVsilicon-to-modulemanufacturingcapacityinEuropeby2025,enablinglocalPVmanufacturerstocaptureasignificantportionoftheEUmarket,whichisexpectedtodeployaround50GWbythatyear.TheoverallESIambitionistoimproveEuropeanenergysecuritybyinvestinginjobsforatechnologythatalreadyaddsmorepowergenerationcapacitiesthananyotherandwillshoulderthemajorresponsibilityofkeepingEuropeanlightsoninthelongterm.ThisPVManufacturingMapinanongoingproject.Ifyoubelievethatyourcompanyshouldbefeatured,pleasecontactusatinfo@solarpowereurope.org.RevolutionaryencapsulantandbacksheetsolutionslocallyavailableacrossEuropeandAsiaDiscovermoreonBorealisEmpoweringSolar.comQuentys™–thechoiceofchampionsPolyolefinencapsulantfilmsCost-effectivemoduleproductionReducedmoduledegradationAchievemorepoweroutputPolypropylenebacksheetsolutionsUpto40%costreductionWeather-proofExtradurableSolarad_105x148_30_04_2021_high.indd130.04EUMarketOutlookForSolarPower2021-2025262EUSolarManufacturing/continuedFIGURE12EU27ANDNORWAYSOLARMANUFACTURINGMAPFonrocheSMAPowerElectronicsKacoRefuBruk-BetMLsystemSoluxtecSolarDayFimerSolbianEnergeticaKiotoFroniusStecaKostalFillfactoryHeliatekSolarwattNorSunSolitekSoletPVMetsolarDanskSolergiApSAleoSolarHeckertPeimarMeyerBurgerRacellSaloTechOyValeoValeoAtersaOpenRenewableIngeteamExasunNorwegianCrystalSunergSolaicoEclipseAsca2CAApollonSolarRedenSolarVoltecIssolRecomSilliaSystoviAkuoEnergySolvisBisolIntelligentSolarXdiscsSonnenstromfabrikEDFPhotowattS'Tile3SunHanplastEcosoliferWacker01020304050EXES.r.LAxsun<=100MW<=1GW<=10GW>10GW/kt01020304050607080NumberofcompaniesModule8.3Module49Cell0.8Cell4Inverter64.9Inverter9Ingot&Wafer1.7Ingot&Wafer3Polysilicon20.7Polysilicon1Productioncapacity(GW)Productionpercompany©SOLARPOWEREUROPE2021EUMarketOutlookForSolarPower2021-202527Inlastyear’sreport,wecarriedoutanassessmentofEUmemberstates'NationalEnergyandClimatePlans(NECPs),analysingthemeasuresthatarekeyforsolardeployment,suchasthelevelofambitionofsolartargets,thepolicyframeworkforprosumers,actionstoeaseadministrativeprocedures,andsoon.Foreachmemberstate,weincludedinformationontheirnationalsolartarget’slevelofambitionandoutlinedkeychallengestosolardeployment.Forthisyear’sedition,wehavecarriedoutanupdatedreviewofmemberstates’performancetowardstheachievementoftheirsolartargets,basedonthelatestmarketinformationavailableandourmost-likelyscenarioprojections.OurmarketanalysishasshownanimprovedoutlookforsolaracrossEurope,withmanycountrieshavingmoreinstalledcapacitythanpreviouslyanticipated.Accordingtoourmarketdevelopmentprojections,allEUmemberstatesareontracktoreachtheirnationalsolartargetsby2030orearlier(Figure13).Ononehand,thisreflectssolar’sexceptionalperformancewhenitcomestocostcompetitivenessandtechnologicalversatility,whileontheotherhand,itclearlydemonstratesthatthelevelofambitionofnationalsolartargetsneedstoberaisedsignificantly.Forexample,EstoniaandLatviahavereachedtheir2030goalsalreadytoday,whilePoland,IrelandandSwedenwilldosothrough2022.NECPandEU2030marketoutlook3©Engie©SOLARPOWEREUROPE2021FIGURE13TIMELINEOFEXPECTEDNECPSOLARTARGETACHIEVEMENTEstoniaLatviaPolandIrelandSwedenBelgiumMaltaDenmarkGreeceBulgariaCroatiaFinlandGermanyLithuaniaNetherlandsCyprusHungaryRomaniaSpainCzechRepublicLuxembourgPortugalFranceAustriaItalySlovakiaSlovenia2021202220232024202520262027202820292030EUMarketOutlookForSolarPower2021-202528Asamatteroffact,ourMediumScenarioprojectionsindicatethat15ofthememberstateswillhavealreadyreachedtheir2030goalsnolaterthan2025,whiletheremainderwilldosonolaterthan2030(seeFigure14).Inotherwords,solardeploymentunderbusiness-as-usualconditionswillbesufficienttooverachievetargetsinallcountries.Therefore,inordertogiveanadditionalboosttonationalmarkets,NECPsolartargetsneedtoberaised,atminimum,aboveour2030MediumScenarioprojections.FIGURE14EU27SOLARPVCUMULATIVECAPACITYIN2025AND2030COMPAREDTONECPTARGETAustriaBelgiumBulgariaCroatiaCyprusCzechRepublicDenmarkEstoniaFinlandFranceGermanyGreeceHungaryIrelandItalyLatviaLithuaniaLuxembourgMaltaNetherlandsPolandPortugalRomaniaSlovakiaSloveniaSpainSwedenGW020406080100120140160180200Mediumscenariocumulativecapacity2025projectionMediumscenariocumulativecapacity2030projectionNECPsolartarget©SOLARPOWEREUROPE2021EUMarketOutlookForSolarPower2021-202529Againstthisbackground,therevisionoftheNECPsplannedfor2023willbefundamentaltoadjustsolarambitionsothateachmemberstateeffectivelycontributestotheEU’srenewabletransition.AsillustratedinChapter1,theEUannualPVmarketispoisedtogrow92%fromthenearly26GWinstalledin2021toabout50GWin2025.Weanticipatefurtherstronggrowthinthesecondhalfofthedecadeduetoimprovedpolicyconditionsandfurthertechnologycostreductions.InourMediumScenarioprojections,weforeseean85GWannualsolarmarketin2030,increasing72%from2025levelsand230%comparedto2021(Figure15).©SOLARPOWEREUROPE2021FIGURE15EU27ANNUALSOLARPVMARKETSCENARIOS2021-20300102030405060708090GWHistoricaldataLowScenarioHighScenarioMediumScenario202720282029203020212022202320242025202625.930.038.544.649.785.4©FroniusSuchanexpansionintheannualmarketwillbereflectedincumulativeinstalledcapacities.Accordingtoourmodelling,thetotalsolarfleetintheEUwillincreasefrom165GWinstalledtodayto328GWin2025,and672GWin2030(seeFigure16).Theurgentneedtorevisememberstates’NECPsolartargetcanbeobservedinthegraphbelow,wheretheaggregatePVcapacitygoalfromNECPs,at335GW,onlyrepresentshalfofthecapacityinstalledundertheMediumScenarioprojections.ThisanalysisalsohighlightstheimportancetorevisetheEUCommission’sEuropeanGreenDealpolicyscenarios,which,atpresent,failtorecognisesolar’spotential.Withonly479GWofsolarmodelledundertheEUCommissionMIXScenario,thistotalinstalledcapacityfallssignificantlyshort(29%,or193GW)ofourMediumScenarioprojections.FortheEUtoremainontracktodeliverona1.5°CParisAgreementscenario,ambitiononrenewableenergydeploymentmustberaised.AccordingtoSolarPowerEuropeandLUTmodelling,thecost-optimisedtrajectorytowardsclimateneutralityin2050correspondstoa45%REStargetby2030.Toreachthismilestone,itwillbenecessarytoinstall870GWofsolarbythen,whichis29%or198GWhigherthanourmodel’smost-likelyscenarioprojections.Inthefollowingsection,wehaveupdatedouranalysisofeachmemberstate’sperformancetowardstheachievementofitssolartargetasdefinedintheNECP.Inafewcases,whennationalgovernmentshavesetoutahighersolartargetthanwhatindicatedintheNECP,wehaveincludedthisinformationinthecharts.Thishelpsshedsomelightonexpectedmarketdevelopmentsforthosememberstateswhoalreadyraisedtheirsolarambition.However,astheformalrevisionoftheNECPswillonlytakeplacein2023,wehavekeptthecurrenttargetsforallmemberstates.3NECPandEU2030marketoutlook/continuedEUMarketOutlookForSolarPower2021-202530FIGURE16EU27TOTALSOLARPVMARKETSCENARIOS2021–2030AND100%RETRAJECTORYTARGET02004006008001,000GWHistoricaldataLowScenarioHighScenarioNECPsolartargetEUCommissionMIXScenarioMediumScenarioprojection100%REtrajectorytarget2027202820292030202120222023202420252026165195233278328870672479335NOTE:ValuesforEUCommissionMIXScenarioarebasedona1.25DC/ACconversionratioassumption,assuggestedinJaeger-Waldauetal.(2021):TheRoleofPhotovoltaicsintheResponseoftheEuropeanMemberStatestotheEuropeanGreenDeal.©SOLARPOWEREUROPE2021EUMarketOutlookForSolarPower2021-202531NECPAUSTRIA02,0004,0006,0008,00010,00012,00014,000MWAustriaNECPPVtarget2030EUPVaverage203075%NECPPVcapacitytarget2030(9,722MW)Newtarget(13,143MW)PVcumulativecapacity2021(2,471MW)25%SolarPVtarget2030achievementrateSolarPVcapacity2030Watt/capita1,060W/cap758W/capKeymarketandNECPchallenges:•Gridcongestion.GridsarecurrentlyseenasabottlenckforallscalesofPVsize.Atdistributionlevel,thegridneedstobeexpanded,butthereisnoclearplanatthemoment.Atpresent,insomeareas,PVsystemsover30kvAhavetoovercomepowersupplylineswithadditionalcostlycablestogetgridconnection.•Workersavailability.TheAustriansolarPVindustryiscurrentlyfacingaboomindemand,whichthecurrentworkforcecannotfullymeet.Thelocalindustryhasflaggedtheurgentneedofnewskilledworkforce,especiallyatinstallationlevel,toaccommodatefuturegrowth.•Administrativeprocedures.InspiteoftheveryambitiousandcomprehensiveAustriansolarrooftopprogramme,theAustrianNECPlacksaproperevaluationoftheadministrativechallengesandambitioninremedymeasures,inparticularforlarger-scalePV.NECPBELGIUM02,0004,0006,0008,000MWBelgiumNECPPVtarget2030EUPVaverage203014%NECPPVcapacitytarget2030(8,000MW)PVcumulativecapacity2021(6,909MW)86%SolarPVtarget2030achievementrateSolarPVcapacity2030Watt/capita672W/cap758W/capKeymarketandNECPchallenges:•PVtarget.ThesolartargetshouldbemoreambitiousinacountrywithhighpotentiallikeBelgium.Thestudy“Towards100%renewableenergyin2050”showsthatthepotentialinBelgiumonwell-orientedrooftopsandground-mountedPVonmaximum10%oftheterritoryis170GW,comparedtothe8GWtargetintheBelgianNECP.•Administrativeprocedures.ThefragmentationoftheBelgianplanismostapparentwithregardtosolarauctions,wherenooverallauctionplanatfederalleveltargetssolar.WhileWalloniaincludesinformationonauctiondesign,butnodetailsonvolumesandschedules,noinformationisavailablefortheFlemishcounterpart.•Gridintegrationandflexibility.Theplandoesnotassesstheimportanceofmodernisingthedistributiongrid,despitethehighshareofprosumers.Inaddition,theplanhasmixedqualityintheflexibilityframeworks,withthetworegionsattimesfocusingondifferentaspectsandthefederalleveladdinganadditionallayerofcomplexity.Lastly,thetransitionfromnet-meteringschemestoprosumerschemesvaluingdemand-sideflexibility,alreadyadvancedinFlanders,shouldbecloselymonitored.NECPBULGARIA05001,0001,5002,0002,5003,0003,500MWBulgariaNECPPVtarget2030EUPVaverage203059%NECPPVcapacitytarget2030(3,216MW)PVcumulativecapacity2021(1,307MW)41%SolarPVtarget2030achievementrateSolarPVcapacity2030Watt/capita501W/cap758W/capKeymarketandNECPchallenges:•PVtarget.Bulgaria’ssolartargetremainslowasPVwillonlyaccountfor2.6%ofelectricityin2040.YetBulgariabenefitsfromhighirradiationrates,notablyinthesouthofthecountry,andhasanimportantsolarpotential,whichisnotreflectedinthecurrenttarget.•Administrativeprocedures.Theplanmentionsmeasurestosimplifyadministrativeprocedures,butthesemeasuresaresignificantlylackingambition.©SOLARPOWEREUROPE2021:Averagebetweenlowandhightargets.3NECPandEU2030marketoutlook/continuedEUMarketOutlookForSolarPower2021-202532NECPCROATIA0800600400200MWCroatiaNECPPVtarget2030EUPVaverage203074%NECPPVcapacitytarget2030(768MW)PVcumulativecapacity2021(202MW)26%SolarPVtarget2030achievementrateSolarPVcapacity2030Watt/capita198W/cap758W/capKeymarketandNECPchallenges:•PVtarget.Croatiahasshownanimportantwillingnesstosupportsolardevelopment.Yet,althoughtheplanincludesextensiveinformation,includingyear-by-yearinstalledcapacity,thePVcapacitytargetisattheconservativeendofthespectrum,withonly600MWofnewadditionsover10years.•Auctions.TheNECPmentionstheexistenceofanauctionplanoverthenextthree-years.ThepublicationandtheimplementationofsuchaplanwillbecriticaltodrivethegrowthofsolarinCroatia.•Prosumers.Croatiahassetitselfatargetofdevelopmenta300MWcapacityofprosumersby2030,drivenbyataxexemptionofself-consumedelectricityanddirectmarketing,accompaniedwithanambitiousprogrammeforPVinbuildings.Afurtherregulatoryreviewshouldsetaframeworkforactivecustomersandrenewableenergycommunities.NECPCYPRUS01,000800600400200MWCyprusNECPPVtarget2030EUPVaverage203069%NECPPVcapacitytarget2030(804MW)PVcumulativecapacity2021(247MW)31%SolarPVtarget2030achievementrateSolarPVcapacity2030Watt/capita631W/cap758W/capKeymarketandNECPchallenges:•Gridandlandcontraints.AnislandinthemiddleoftheMediterranean,Cyprusstilldoesnothaveaninterconnectionwithmainland.Havingnostoragecapacityorsmartnesstoavoidhighcurtailmentlevels,thepowergridisnotinagoodconditiontowellintegratesolarprojects.•Regulatedmarket.Thecountryisundergoingaprocessofliberalisationoftheenergymarket,movingfromafullyverticallyintegratedsystemtothepossibilityforprivateplayerstoparticipateinmarketdynamics.Afullyfunctioningliberalisedmarketisexpectedbytheendof2022.•Poorfinanciallandscape.Animportantobstacletothedevelopmentoflarge-scalePVprojectsisthepoorsupportfrombankingsectortoPVprojectfinancing,whichposesachallengetoaccessingfinancialsupportandworsensinvestmentconditions.NECPCZECHREPUBLIC04,0003,0002,0001,000MWCzechRep.NECPPVtarget2030EUPVaverage203043%NECPPVcapacitytarget2030(3,975MW)PVcumulativecapacity2021(2,255MW)57%SolarPVtarget2030achievementrateSolarPVcapacity2030Watt/capita370W/cap758W/capKeymarketandNECPchallenges:•PVtarget.TheNECPoutlinesindetail,onayear-by-yearbasis,projectedsolardevelopmentsintheCzechRepublic,givingagoodvisibilitytoinvestors.However,consideringthecountry'ssolarpotential,thePVtargetappearsunderwhelming.Againstthisbackground,thegovermentacknowledgesthatthetargetwillbesurpassedbyalargeextent.•Publicacceptanceforlarge-scalesolar.Inthecountrythereisaperceivedgenerallackofsupportforlarge-scalesolar,duetothefactthatthepastfeed-intariffregimegrantedverygeneroussubsidiestolarge-scalePVprojects.Sincenewutility-scaleprojectshavenotbeenbuiltinthelast10years,newprojectsmightfacepublicacceptanceconcerns.•Workersavailability.ThesuddenincreaseofdemandforsolarintheCzechRepublichasledtoashortageofskilledworkers,especiallyatinstallationlevel.Thiscouldbecomeamajorbottleneckandlimitinparticularthedeploymentofsmallerrooftopinstallations.©SOLARPOWEREUROPE2021EUMarketOutlookForSolarPower2021-202533NECPDENMARK08,0006,0004,0002,000MWDenmarkNECPPVtarget2030EUPVaverage203064%NECPPVcapacitytarget2030(7,842MW)PVcumulativecapacity2021(2,839MW)36%SolarPVtarget2030achievementrateSolarPVcapacity2030Watt/capita1,307W/cap758W/capKeymarketandNECPchallenges:•Uncertainnewtariffregime.Detailsonthenewtariffsthatsolarprojectswillhavetopaytosecuregridconnectionhavenotbeenunveiled.However,itisexpectedthatthisnewregime,whichshouldbeintroducedbyJanuary2023,willchallengethebusinesscaseforprojectslocatedinproductiondominatedareas.•Prosumers.Denmarkhasmadeimportanteffortstohaveabetterunderstandingoftheopportunitiesandbarriersofprosumers.However,theincentivesforprosumersarerelativelylowandself-consumptionislaggingbehindinDenmark.Inaddition,theplandoesnotdetailhowtheCleanEnergyPackageprovisionsoncollectiveself-consumptionwillbeimplemented.•Griddevelopment.Denmarkhasdevelopedavisionforthefutureofitsgrid,alsoaddressinganexpectedgrowthofrenewableenergies.However,somemeasures-includingthenewtariffscheme-maynotsupportthisdevelopmentalthoughthecountrywillseeseveralGWofsolarprojectsthatwillneedgridconnectionwithinthenextfiveyears.NECPESTONIA0100200300400500600MWEstoniaNECPPVtarget2030EUPVaverage2030NECPPVcapacitytarget2030(415MW)PVcumulativecapacity2021(546MW)132%SolarPVtarget2030achievementrateSolarPVcapacity2030Watt/capita324W/cap758W/cap100%KeymarketandNECPchallenges:•PVtarget.DespiteambitiousREStargetsanddetailedtrajectoriesforsolarcapacityandgeneration,thesolarambitionremainsverylow,asthecountryhasalreadyreachedthe2030PVcapacitytargetsetoutintheplan.Thesolartargetshouldbeincreasedfurther.•Administrativeprocedures.Estoniahascreatedamanualofproceedingsforprojectdevelopersandhastakenstepstoidentify,withlocalauthorities,suitableareasforthedevelopmentofsolarprojects,whichisasignificantbestpractice.AspartoftheimplementationoftheREDII,measurestofurthersimplifyadministrativeproceduresandintroducingaone-contact-pointsystemshouldfurtherfacilitatethedeploymentofnewsolarprojects.•Prosumers.ThedevelopmentofsolarprosumersisaclearobjectiveoftheEstonianenergypolicyandtheplanincludesanestimatedpotentialfornewandrenovatedbuildings.Thecountryalreadyproposesfinancingsupportforprosumers,butthedevelopmentofsupportframeworksforindividualandcollectiveself-consumerswillbecriticaltodevelopthemarket.NECPFINLAND01,2001,000800600400200MWFinlandNECPPVtarget2030EUPVaverage203067%NECPPVcapacitytarget2030(1,158MW)PVcumulativecapacity2021(387MW)33%SolarPVtarget2030achievementrateSolarPVcapacity2030Watt/capita207W/cap758W/capKeymarketandNECPchallenges:•PVtarget.TheFinnishsolartargetresultsintojustabout900MWofsolarinstalledovertenyears,muchbelowitspotential.Theambitionshouldberaised,includingthroughthesettingofsolarauctions.•Administrativeprocedures.Theplandoesnotcontaininformationoncurrentorfuturemeasurestakentosimplifyadministrativeprocedures.TheimplementationoftheREDIIinthatregard,inparticularforprosumers,willbeimportantforfacilitatingthedevelopmentofnewprojects.•Prosumers.TheFinnishgovernmenthascommissionedastudyonself-consumptionanditsbarriers.OnthatbasisandaspartoftheimplementationoftheREDII,thegovernmentshouldintroduceorimprovethesupportframeworkforsolarPVprosumers.©SOLARPOWEREUROPE20213NECPandEU2030marketoutlook/continuedEUMarketOutlookForSolarPower2021-202534NECPFRANCE040,00030,00020,00010,000MWFranceNECPPVtarget2030EUPVaverage203067%NECPPVcapacitytarget2030(40,000MW)PVcumulativecapacity2021(13,235MW)33%SolarPVtarget2030achievementrateSolarPVcapacity2030Watt/capita600W/cap758W/capKeymarketandNECPchallenges:•Administrativeprocedures.SolarprojectdevelopersinFrancearefacingtightregulation,challenginggridconnectionprocessesandlongadministrativeprocedures,whichneedtobeclarifiedandsimplified.Administrativedeadlinesshouldalsobeshortened.•Accesstoland.Severalbureaucratichurdlesareduetothedifficultyinaccessinglandforground-mountedPVprojects,inparticularagriculturalland.Aplanneedstobedevelopedwithregardtotheuseoflandforsolarprojectstakingintoaccounttherealimpactonsoilsandbiodiversity.Atthesametime,innovativePVsolutionswithlowissuesinlandavailability-suchasagri-PVandfloatingsolar,applicationsinwhichFranceisapioneer-shouldbefurtherencouraged.•Prosumers.Self-consumptioninFranceremainsasmallmarketcomparedtothecountry'spotential.Supportmechanismsforself-consumptionprojectsneedtobeadaptedsoastoenhancethevalueofallelectricityproduced,self-consumed,andinjectedintothegrid.NECPGERMANY0200,000150,000100,00050,000MWGermanyNECPPVtarget2030EUPVaverage39%NECPPVcapacitytarget2030(98,000MW)PVcumulativecapacity2021(59,910MW)61%SolarPVtarget2030achievementrateSolarPVcapacity2030Watt/capita1,179W/cap758W/capNewtarget(200,000MW)KeymarketandNECPchallenges:•Auctions.Sincethelastchangeintheauctionscheme,introducedinMarch2021,mid-sizedPVrooftopsystemsbetween300-750kWcanchoosebetweenalow-remunerationfeed-intarifforcontractsfordifferencethroughtenders.Thishasresultedinasharpdecreaseofinstalledcapacityinthissegment,whichhasbeenamajorcontributortosolarinGermany.Initscoalitionagreement,thenewgovernmentannouncedthatthisissuewillbelookedinto.•Prosumers.Thecurrentsupportschemeforself-consumptionneedstoberevisedinordertomeetthenew200GWtargetby2030.Prosumerfeed-inratesareautomaticallyadjusteddependingonreachingcertaininstallationthresholds.Thissystemneedstobeupdatedinlightofthenewsolarambition,inordertomakethefeed-inrateseconomicallyattractiveforself-consumers.•Flexibilityandstorage.Solarandstorageprosumersfacesignificantredtapeandhavetoacquireacostlymeteringsystemwhenbecomingactiveconsumersandprovidingflexibilityservices.NECPGREECE08,0006,0004,0002,000MWGreeceNECPPVtarget2030EUPVaverage203056%NECPPVcapacitytarget2030(7,660MW)PVcumulativecapacity2021(4,850MW)63%SolarPVtarget2030achievementrateSolarPVcapacity2030Watt/capita772W/cap758W/capKeymarketandNECPchallenges:•PVtarget.Withthecurrentandexpectedmarketdevelopments,itisprojectedthattheNECPtargetof7.7GWofsolarwillbereachedalreadyin2024.ThegovernmentisgoingtoreviseitsnationaltargettobetterreflectincreasedEUclimategoals.AnambitioussolarPVtargetwillbekeytosupportthecountry'smarketexpansion.•Griddevelopment.Atpresent,gridcongestionatmediumandhighvoltagelevelsareinducingsolardeveloperstoconnectatultra-highvoltagelevel,whichisanexpensiveoptioncomparedtothealternatives.Gridexpansionandreinforcementwillbeinstrumentaltoallowfurthersolardeployment.•Prosumers.Whilelarge-scalesolarisexpandindrapidlyacrossthecountry,theresidentialmarketisdevelopingveryslowlyandstrugglestogainpace.Policyactionshouldbetakentosupporttheexpansionofsmall-scalesolar.©SOLARPOWEREUROPE2021:Averagebetweenlowandhightargetsfor2028,roundedupto40GW.EUMarketOutlookForSolarPower2021-202535NECPHUNGARY01,0002,0003,0004,0005,0006,0007,000MWHungaryNECPPVtarget2030EUPVaverage203054%NECPPVcapacitytarget2030(6,500MW)PVcumulativecapacity2021(2,989MW)46%SolarPVtarget2030achievementrateSolarPVcapacity2030Watt/capita696W/cap758W/capKeymarketandNECPchallenges:•Prosumers.Theplanproposesaspecifictargetforthedevelopmentofprosumersaswellasacomprehensivesetofenablingmeasures.However,itdoesnotprovidealotofdetailsontheprecisesupportschemesforprosumers,andinparticularforresidentialprosumersforwhomthenet-meteringschemewillhavetobephasedoutin2024.•Administrativeprocedures.Theplanshoulddeveloptheamountofinformationexistingonadministrativemeasures,andinparticularidentifytheone-contact-pointsystemforeseenintheREDII.•Griddevelopment.Whileutility-scalePVdevelopersfaceincreasingdifficultiestofindgridconnectionagreements,theplandoesnotcontainanymeasurerelatedtogridinvestment,inparticulardistributiongrid,andgridmodernisationthroughthedeploymentofsmartgridtechnologies.NECPIRELAND0500400300200100MWIrelandNECPPVtarget2030EUPVaverage203072%NECPPVcapacitytarget2030(431MW)PVcumulativecapacity2021(121MW)28%SolarPVtarget2030achievementrateSolarPVcapacity2030Watt/capita82W/cap758W/capKeymarketandNECPchallenges:•PVtarget.Counterintuitively,Ireland’sadditionalmeasuresscenarioassumesamuchlowerPVdeploymentthantheexistingmeasuresscenario,witha431MWtargetin2030.Withonly380MWaddedthrough2030,thecountry’sexpectedsolarcapacitypercapitaisamongthelowestintheEU.•Administrativeprocedures.Theplanmentionsthatmeasuresarebeingestablishedbutdoesnotdiscussthesemeasuresindetail.Furthermeasuresshouldbeputinplacetoeasetheadministrativeburden,whichcancreateheavybarrierstoinvestmentsinrenewableprojects.Furthermore,theneedforstandardisedlocaladministrativerequirementsandfees,whichcurrentlydifferwidelydependingonlocalauthorities,shouldbeaddressed.NECPITALY080,00060,00040,00020,000MWItalyNECPPVtarget2030EUPVaverage203057%NECPPVcapacitytarget2030(51,000MW)PVcumulativecapacity2021(22,023MW)43%SolarPVtarget2030achievementrateSolarPVcapacity2030Watt/capita864W/cap758W/capNewtarget(71,200MW)KeymarketandNECPchallenges:•Permittingprocedures.Stringentpermittingrestrictionposeamajorchallengetothecountry'ssolarambitions,generatinguptosixyearsofdelaytoprojectdevelopment.Thegovernmenttriedtoaddressthepermittingissuethroughasimplificationdecree,whosefirstresultswillbeseeninabouttwoyears.•Accesstoland.Underthecurrentauctionscheme,solarPVprojectsdonothavepermissiontobebuiltonagriculturalland.Asaresult,auctionshavebeenlargelyundersubscribedsofar.CooperationwithregionswillbeessentialtoidentifysuitablelandforsolarPVprojects.•Griddevelopment.TheItalianplancontainsdetailedinformationontheupcomingchallenges,includingaquantificationoftherequiredinvestments,butdoesnotgiveaclearvisiononmeasuresthatwillbetaken.Monitoringtheimplementationoftheproposedregulatorychangeswillbecritical.©SOLARPOWEREUROPE20213NECPandEU2030marketoutlook/continuedEUMarketOutlookForSolarPower2021-202536NECPLATVIA020161284MWLatviaNECPPVtarget2030EUPVaverage20300%NECPPVcapacitytarget2030(N/A)PVcumulativecapacity2021(19MW)100%SolarPVtarget2030achievementrateSolarPVcapacity2030Watt/capita6W/cap758W/capKeymarketandNECPchallenges:•PVtarget.TheLatvianNECPhassetanambitioustargetforthedevelopmentofrenewables.Yet,thereisnoplannortargetorauctionsfortheinstallationofsolar.Thisdoesnotgiveinvestorsenoughvisibilityfortheirinvestments.•Prosumers.Aspecificplanshouldbesettoencourageprosumers,basedonsupportschemes,taxexemptions,andthedevelopmentofcollectiveself-consumption.•Administrativeprocedures.TheplandoesnotassesspossibledifficultiesthatcouldbeencounteredbyPVprojectdevelopers,nordoesitproposeremedymeasuresormeasurestoimplementtheCleanEnergyPackage.NECPLITHUANIA01,000800600400200MWEUPVaverage203074%NECPPVcapacitytarget2030(839MW)PVcumulativecapacity2021(220MW)26%SolarPVtarget2030achievementrateSolarPVcapacity2030Watt/capita758W/capLithuaniaNECPPVtarget2030338W/capNewtarget(1,000MW)KeymarketandNECPchallenges:•PVtarget.In2021,thecountryadoptedanewsolarPVtargetof1GWinstalledby2025.ThispositivedevelopmentshouldleadtoasignificantupwardrevisionoftheNECPtarget,givingclearvisibilityonthesolarambitiontowards2030.•Prosumers.Lithuaniahasdevelopedacompletevisionforthedevelopmentofsolarprosumer,withclearobjectivesandacomprehensivesetofmeasurestosupporttheirdevelopment.Itiscrucial,however,thatthisplanisfollowedupandimplementedsmoothlytofosterdistributedPVdeployment.•PPAs.WhiletheplanincludesextensiveinformationondifferentmeasuressupportingPVdeployment,aframeworkforPowerPurchaseAgreementsstillneedstobedeveloped.tobereachedby2025.NECPLUXEMBOURGEUPVaverage2030SolarPVtarget2030achievementrateSolarPVcapacity2030Watt/capita758W/capLuxembourgNECPPVtarget20301,580W/cap77%NECPPVcapacitytarget2020(1,090MW)PVcumulativecapacity2021(253MW)23%05004006008001,0001,200MWKeymarketandNECPchallenges:•Auctions.TheNECPindicatesthatthenewmultiannualplanfortenderswillbepublished,withtenderedvolumessubsequentlyincreasedeachyear.However,detailsofthevolumeanddesignsarenotincluded.•Prosumers.Theplanshowsverygoodprovisionsforsolarprosumersandisdevelopingseveralinterestingincentives.Inparticular,theproposedmeasureswilltacklethedifferentbarrierstoself-consumption,frompublicincentives,toawarenessraisingandfinancing.Theself-consumptionschemesneedtonowbefullyimplementedinthenationallaw.•Administrativeprocedures.Theplancontainsinterestingmeasurestosimplifytheadministrativeprocedureslinkedtothesupportschemesandthefinancingschemesforprosumers.Thishoweverneedstobecompletedbytheset-upofaclear“one-contact-point”,whichshouldsimplifythedevelopmentofsolarprojects.©SOLARPOWEREUROPE2021EUMarketOutlookForSolarPower2021-202537NECPMALTAEUPVaverage2030SolarPVtarget2030achievementrateSolarPVcapacity2030Watt/capita758W/capMaltaNECPPVtarget2030592W/cap18%NECPPVcapacitytarget2020(266MW)PVcumulativecapacity2021(217MW)82%050100150200250300MWKeymarketandNECPchallenges:•PVtarget.Thetrajectoryofsolarcapacityremainslowduetoseveralfactorssuchasphysicalandspatiallimitations,resourceavailability,costoflandandotherissues.Asaresult,only78MWareplannedtobeinstalledoverthenexttenyears.Inaddition,noinformationonauctionsisavailable.•Prosumers.Theplanproposesmeasurestoincentivisethedevelopmentofself-consumption.Yet,itdoesnotincludeaproposaltotransposetheCleanEnergyPackagewithregardtocollectiveself-consumption.Inaddition,theNECPcouldgiveincreasedvisibilitytodevelopingprosumerschemesbyquantifyingthepotentialorsettingatargetforthedevelopmentofprosumers.•Administrativeprocedures.Whilespecificprovisionstofacilitatetheadministrativeproceedingsforself-consumptionanddistributedrenewablesareincluded,anditismentionedthatthecountryispreparingtheimplementationoftheCleanEnergyPackage,theplanshouldcontainmoredetailedmeasuresorproceduressetuptoimplementCEPprovisions,andatleastabetterassessmentofthesituation.NECPTHENETHERLANDS030,00025,00020,00015,00010,0005,000MWNetherlandsNECPPVtarget2030EUPVaverage203051%NECPPVcapacitytarget2030(27,000MW)PVcumulativecapacity2021(13,109MW)49%SolarPVtarget2030achievementrateSolarPVcapacity2030Watt/capita1,547W/cap758W/capKeymarketandNECPchallenges:•Gridavailability.LimitedcapacityoftheDutchpowergridcouldposeasignificantchallengetosolardeploymentinthecountry.Lackofgridcapacityatthemiddleandhighvoltagelevelisexpectedtoleadtolongdelaysandpossiblyprojectnon-realisation.•Landavailability.Thelarge-scalesectorisexposedtothechallengeofsecuringsuitablelandforsolardeployment.Landavailabilityissuesoftencometogetherwithpublicacceptanceconcernsinrelationtotheuseofagriculturallandforsolarprojects.Theindustryisaimingtotackletheseissuesbyensuringaquotaoflocalparticipationinrenewableenergyprojectsandbydevelopingabiodiversitylabelforlarge-scaleprojects.NECPPOLAND08,0007,0006,0005,0004,0003,0002,0001,000MWPolandNECPPVtarget2030EUPVaverage20303%NECPPVcapacitytarget2030(7,300MW)PVcumulativecapacity2021(7,112MW)97%SolarPVtarget2030achievementrateSolarPVcapacity2030Watt/capita198W/cap758W/capKeymarketandNECPchallenges:•Gridavailability.Onemajorchallengeforthesolarsectoristhelackofgridconnectionpointsfornewprojects.Thisexacerbatesthedelayonprojectcompletion,whichisalreadyexperiencingtroublederivedfromthecurrentsupplychaindisruptionsandpricehikes.•PVtarget.Withthecurrent7.3GWtargetintrajectorytobereachednolaterthan2022,itbecomesapparentthatthePolishgovernmentneedstosignificantlyraisethetargetintheNECPrevisionplannedin2023.•PPAs.PolandhasanimportantpotentialforPPAs,withtodate4projectsof141MWconcluded.Yet,theplandoesnotaddresstheexistingbarrierstoPPAs,suchastheregulatoryrequirementsfordirectenergysupplyortheEU-ETScostsexemptionforenergyintensivesusingPPAs.©SOLARPOWEREUROPE20213NECPandEU2030marketoutlook/continuedEUMarketOutlookForSolarPower2021-202538NECPPORTUGAL02,5005,0007,50010,000MWPortugalNECPPVtarget2030EUPVaverage203083%NECPPVcapacitytarget2030(9,000MW)PVcumulativecapacity2021(1,513MW)17%SolarPVtarget2030achievementrateSolarPVcapacity2030Watt/capita908W/cap758W/capKeymarketandNECPchallenges:•Permittingprocedures.Atlarge-scalelevel,permittingremainsachallengeforsolardevelopers.Theprocedurerequirestocarryoutaverydemandingenvironmentalimpactassessmentstudy.Moreover,longdelaysinofficialentitiesresponses,aswellasaskingadditionalelementsbeforebuildingpermitcreatesmoreuncertainty.Toaddressthis,permittingguidelinesdraftedjointlybythegovernmentandthesolarsectorareunderpreparation.Theself-consumptionalsofacesdelaysonregistrationprocedure,namelylongdelaysinonsiteinspectionshaveobligedtheadministrationtogiveprovisionalcertificatesforprojectstogoaheadwiththeirgridconnectionprocedures.•Prosumers.Whilethelarge-scalesegmentwilldrivePVinstallationsinthecountry,self-consumptionremainsalimitedmarketinPortugal.Currentlythereisnosupportschemeforprosumers,whofeedtheirexcesselectricityintothegridatmarketprices.•Auctions.ThesolarmarketinPortugalhassignificantlydeveloped,drivenbysuccessfulauctionsin2020.However,theplandoesnotdetailtheauctionscheduleinthecomingyears,northevolumes.NoinformationaboutthetypeandvolumesexpectedforJanuary2022hasbeendisclosedatthetimeofwriting.NECPROMANIA06,0005,0004,0003,0002,0001,000MWRomaniaNECPPVtarget2030EUPVaverage203071%NECPPVcapacitytarget2030(5,100MW)PVcumulativecapacity2021(1,458MW)29%SolarPVtarget2030achievementrateSolarPVcapacity2030Watt/capita279W/cap758W/capKeymarketandNECPchallenges:•PVtarget.Thetargetanticipatesa3.7GWgrowthover10years,whichismorethandoublethecumulativeinstalledcapacityinthecountry.However,thesetargetsdonotfullyreflectthepotentialforSolardevelopmentinRomania,whichisoneofthehighestinEurope.Accordingtothecurrenttarget,in2030thecountrywouldhavealimitedsolarpenetrationcomparedtoitsmoreambitiouspeers.•Auctions.ThesupportforRESthroughauctionsisonlymentionedimplicitly,whereasdetailsonvolumes,schedulesanddesignforrenewableandsolartendersareabsent.•Prosumers.PositiveelementsareincludedinthefinalRomanianplanforprosumersupportschemes.Atthesametime,theplanshouldbemoreambitiousonprosumerdevelopment.NECPSLOVAKIA01,2001,000800600400200MWSlovakiaNECPPVtarget2030EUPVaverage203055%NECPPVcapacitytarget2030(1,200MW)PVcumulativecapacity2021(543MW)45%SolarPVtarget2030achievementrateSolarPVcapacity2030Watt/capita222W/cap758W/capKeymarketandNECPchallenges:•PVtarget.BoththeoverallambitionforRESdeploymentandthesolarPVcontributionremainlow.Theplancouldbeupdatedwithmoreaccurateinformation,asthegoalsandtrajectoriesareinadequateandrelyonoutdateddata.ThoughthePVtargethasincreasedsignificantlycomparedtothepreviousNECPdraft,with648MWofnewcapacityinstalledthrough2030,solarambitionremainslimited.•Auctions.TheplanoutlinesgeneralinformationaboutRESauctions,butnotspecificallyforsolar.Moreover,theindicatedcapacityofauctionschemesappearslow.•Prosumers.TheSlovakianplandoesassesstheprosumercapacityinthecountry.However,itdoesnotgivedetailsonthesupportschemesthatwillbedevelopedtoincentiviseself-consumption,includingcollectiveself-consumption.©SOLARPOWEREUROPE2021EUMarketOutlookForSolarPower2021-202539NECPSLOVENIA01,7501,5001,2501,000750500250MWSloveniaNECPPVtarget2030EUPVaverage203075%NECPPVcapacitytarget2030(1,650MW)PVcumulativecapacity2021(407MW)25%SolarPVtarget2030achievementrateSolarPVcapacity2030Watt/capita803W/cap758W/capKeymarketandNECPchallenges:•Auctions.TheNECPdoesnotincludeinformationonauctiondesign,volumeandschedule.ThisposesasignificantchallengetoPVprojectdevelopmentinthemediumterm.•Prosumers.Objectivessetoutintheplanincludeimprovingtheroleofactiveconsumersandprovidingfinancialsupportforprosumers.However,itisimportantthattheseobjectivesareenshrinedintolawandaccompaniedbydevelopedregulatoryframeworks,suchascollectiveself-consumption.Inaddition,thereareconcernsaboutthelong-termstabilityoftheregulatoryframeworkwhichareharmingtheinvestmentenvironment.•Administrativeprocedures.Theplancontainsinterestingproposalstosimplifyadministrativeprocedures,whoseimplementationshouldbecloselymonitored.However,thelistofmeasuresshouldbecompleted.Theadministrativeproceduresarestillveryextensive,comprehensive,anddifficulttounderstand.Inaddition,thereisnospecificcontactpointforthepermitgrantingprocedure,whichcouldsignificantlyeaseprocesses.NECPSPAIN040,00030,00020,00010,000MWSpainNECPPVtarget2030EUPVaverage203054%NECPPVcapacitytarget2030(39,181MW)PVcumulativecapacity2021(17,936MW)46%SolarPVtarget2030achievementrateSolarPVcapacity2030Watt/capita848W/cap758W/capKeymarketandNECPchallenges:•Permittingprocedures.Thelargeamountofsolarprojectsunderdevelopmentinthecountryarefacingtightpermittingchallenges.Regulationpassedin2020imposesstrictdeadlinestotheprojectsunderdevelopment,puttingpressureonbothdevelopersandtheadministrativeauthoritiestocompletetheproceduresintime.•Socialacceptance.Intheareaswherenumerousprojectsareunderdevelopment,anot-in-my-backyardattitudeisgrowingamonglocalcommunities.Thesolarindustryaimstoaddressthischallengebyintegratingshared-valueprinciplesinthedesignofprojectsandthroughstrongercommunicationeffortsonthesocio-environmentalbenefitsoflarge-scalesolarparksforlocalcommunities.•Prosumers.Self-consumptionsystemsfacelengthypermittingtimes,bothattheadministrationandatthenetworklevel,duetonon-homogeneousprocessesacrossmunicipalities,andthereducedexemptionsofnetworkaccesspermitsforrooftopPV.Inaddition,ittakesaround6monthstofinalisetheprocedurethatremuneratesexcessiveproductionofelectricity,aperiodinwhichconsumersdonotreceiveanyincome.NECPSWEDEN02,5002,0001,5001,000500MWSwedenNECPPVtarget2030EUPVaverage203019%NECPPVcapacitytarget2030(2,212MW)PVcumulativecapacity2021(1,782MW)81%SolarPVtarget2030achievementrateSolarPVcapacity2030Watt/capita208W/cap758W/capKeymarketandNECPchallenges:•PVtarget.Theplanshowsrelativelylowambitionforsolarenergybefore2030with430MWofnewlyinstalledsolarcapacityandaresultinglowvalueofPVpenetrationby2030.However,ahigherambitionofsolarcapacityisshownpost-2030withmorethan7GWinstalledcapacity.•Auctions.Theplandoesnotincludeanyinformationonthefutureauctionschedule,volumeanddesign.Providingmorevisibilitytoinvestorsherewillbecritical.ThegovernmenthasnotannouncedanytendersincethepublicationoftheNECP.•Permittingprocedures.Permittingforlarge-scaleprojectsfaceshurdleswhenitcomestoauthorisationatregionallevel.Whilethenationalgovernmentandlocalmunicipalitiesaresupportingprojectdevelopment,thelimitationcomesprimarilyfromLänsstyrelsen,theregionalbranchofnationalauthorities.©SOLARPOWEREUROPE202141In2021,sevenEUsolarmarketsinstalledmorethan1GWofsolar–Germany,Spain,theNetherlands,Poland,France,GreeceandDenmark(seeFigure17).ThenumberofGW-scalemarketshasincreasedbytwocomparedtothefivefromlastyear.Whilethetopfourmarkets–Germany,Spain,theNetherlandsandPoland–haveremainedstable,threenewentrantshavefilledtheremainingslots.France,rankedfifth,comfortablysurpassed2GWofannualinstallations,afteralacklusterperformancein2020.AtpositionsixwefindGreece,whoinstalledmorethan1GWforthefirsttimesince2013.ButthebiggestsurpriseinthislistisDenmark,whichjoinstheGWclubforthefirsttimeever.Thecountryishavingastellarperformancein2021with1.2GWofexpectedannualadditions,whichismorethantwicethecapacityinstalledin2012,thebestyearsofar.For2022,weexpectthegrouptobroadenfurther,withItalyreachingtheGWscaleafteralongwhile.GW-scalesolarmarkets450MW,Romeral,Cuenca,Spain.©Iberdrola1.GERMANYSolarPowerEurope2.SPAINUniónEspañolaFotovoltaica(UNEF)3.THENETHERLANDSHollandSolar4.POLANDPSF&PVPoland5.FRANCESyndicatdesÉnergiesRenouvelables(SER)6.GREECEHELAPCO7.DENMARKDanishSolarPower&theDanishPVAssociation©SOLARPOWEREUROPE2021FIGURE17EU27GW-SCALESOLARMARKETS2020-2022Poland;13%Belgium;6%Poland;12%France;9%Greece;6%Denmark;5%RestofEU27;23%RestofEU27;20%RestofEU27;17%Netherlands;15%Spain;15%Spain;18%Netherlands;13%Netherlands;12%Germany;25%Germany;20%Germany;27%5GWmarkets20207GWmarkets20218GWmarkets2022Spain;15%Poland;6%France;10%Denmark;6%Greece;4%Italy;3%EUMarketOutlookForSolarPower2021-202542TheexpansionofsolartechnologyindifferentgeographiesacrosstheEUwillcontinueoverthenextyears,ascountriesidentifysolarasthemostversatileandcost-competitivesolutiontotheirclimateandenergyneeds.In2023,weexpecttoreach11GWmarketsacrosstheEuropeanUnion,whichwillbecome12by2025(Figure18).Forthischapter,wehaveinvitednationalsolar/renewablesassociationsfromourmembersrepresentingthisyear’sEUGWsolarmarketstoprovidetheirlocalexpertviewsontheirhomecountries(which,however,sometimesdifferfromourestimatesthatarebasedonseveralsources).Forthosecountriesforwhichwedidnotreceivecontributionsfromnationalassociations,wehavewrittentheoverviewsbasedonourSolarPowerEuroperesearch.©SOLARPOWEREUROPE2021FIGURE18NUMBEROFSOLARGWMARKETSINTHEEU2720217markets20228markets202311markets202411markets202512markets©Alight4GW-scalesolarmarkets/continuedEUMarketOutlookForSolarPower2021-202543SolarPVTargetsinGermanyInitsagreementpublishedlastmonth,thenewGermancoalitionformedbytheSocialDemocrats(SPD),GreensandLiberals(FDP)havehighlightedthecrucialimportanceofsolarintheenergytransition.WhiletheRenewableEnergyAct2021(EEG2021)seta100GWtotalinstalledsolarPVcapacitytargetby2030,thenewgovernmentcoalitionagreementseesadoublingofthetargetto200by2030.Withaninstalledcapacityof60GWattheendof2021,Germanyiscommittedtoinstall140GWwithin9years,whichmeanstoalmostquadrupleitstotalPVfleetduringthisdecade.Thenewagreementalsoconfirmsthephaseoutofnuclearasplanned,withthefinalreactorstobeswitchedoffin2022.Moreover,thecoalitionstrivestomoveforwardthecoalphaseoutfrom2038to2030.InJune2021,thenewClimateProtectionActsetabindingpathtoclimateneutralityandmovedtheyearofachievementto2045insteadof2050.TheinterimGHGemissionreductiontargetfor2030isalsoraisedto65%.Thenewcoalitioniscommittedtomeeting80%ofitselectricityfromrenewablesourcesby2030,upfrom1.GermanyTowardsA15GWAnnualMarketSoonOverviewofSolarPVDevelopmentsOverthefirst10monthsof2021,4.4GWwasinstalledinGermany,comparedto3.9GWinthesameperiodlastyear.Withanaverageof446MWinstalledpermonth,themarketisassumedtoinstall5.3GWbytheendof2021,an8%growthcomparedto2020,when4.9GWwasadded.Thatisaslowdowncomparedtothe26%growthratebetween2019and2020.Nonetheless,Germanyholdsontoitsrolesasboththecontinent’slargestsolarmarketinEuropeandthelargestoperatorofsolarPV.WithanewgovernmentcoalitioninplaceandtheGreenPartytakingresponsibilityfortheEnvironmentMinistry,theAgricultureMinistry,andthenewlycreatedEconomic&ClimateMinistry,theoutlookforsolarinGermanylooksevenmorepromising.Weexpect7.9GWadditionsfor2022and10GWin2023,whenthemarketwillexceedthisthresholdforthefirsttime.©SOLARPOWEREUROPE2021FIGUREGW1GERMANYANNUALSOLARPVMARKETSCENARIOS2022-202502,0004,0006,0008,00010,00012,00014,00016,00018,00020,000MWHistoricaldataLowScenarioHighScenarioMediumScenario20222023202420252016201720182019202020214,88045%13%16%50%10%5,8434,96110,10119,5904GW-scalesolarmarkets/continuedEUMarketOutlookForSolarPower2021-202544the65%targetundertheformergovernment.TheformergovernmentdidalreadyintroduceanationalEmissionTradingSystem(ETS)forheatingandtransportfuelsinJanuary2021,whichexpandstheEU-wideETSthatcurrentlydoesnotcoverthefuelsusedintheheatingandtransportsectors.AtransitionphasehasstartedwithafixedandratherlowCO2priceof25EUR,increasingeachyearupto55EURin2025,andwillbefollowedbyanauctionsystemwithminimumandmaximumpricesstartingin2026.However,thenewcoalitionhasagreedtomakesurethattheCO2price,whichiscurrentlyaround60EUR,willnotfallbelowthatlevelanymoreforlongerperiods,andifneededimplementnationalmeasuresforthispurpose.DriversforSolarGrowthWithinthecontextoflarge-scaleauctions,Germanyhashadthreetypesoftendersthatinvolvesolar:atechnology-specifictenderforground-mountedprojectsabove750kW(inMarchandDecember2021)andmixedwindandsolartenders.Thetechnologyspecifictenderstookplacethreetimesayearwithavolumeof2x150MW,1x175MW,and2x500MW;thelatestonestartedinNovember2021withacapacityof509.52MWThetechnology-neutraltendersawardedin2020repeatedthepatternofthepreviousyear,withsolarwinningalltheauctionedcapacity.Tosupporttheachievementofitsrenewableenergytargets,in2018,thepreviousgovernmentcoalitionagreedtoorganiseextratendersover3years,accountingforatotalsolarcapacityof4GW(2019:1GW;2020:1.4GW;2021:1.6GW),inadditiontotheregulartenders.Ontopofthesethreetendertypes,inMarch2021thesecondtechnology-neutralinnovationtendertookplace,wheresolar&storageprojectswereawardedallthe258MWtenderedcapacity.InthepreviousroundinSeptember2020,nearlyallthe650MWcapacitywasawardedtosolarprojects,withmorethanhalfofthiscapacityincludingbatterystorage.Inaddition,thefirstrooftoptenderforsolarsystemswithacapacityabove300kWheldinFebruary2021wasoversubscribed.Atotalof213MWbidswereacceptedfor150MWinitiallytendered.ThesecondtenderforrooftopstartedonDecember1,2021.Finally,Germany’sFederalNetworkAgencylauncheda50MWinnovativesolartenderforfloatingsolar,carportsandagri-PVinOctober2021withabiddingdeadlinesetforApril2022.WiththeClimateProtectionAct,theformergovernmentagreedtogiveashort-termboosttorenewabledeploymentthroughhighertendervolumesfor2022.AuctionedsolarPVcapacitywillgrowfrom1.9GWto6GW,withtheextracapacityequallydividedbetweenutility-scaleandrooftopsystems.Startingfrom2023,tendersforsolarareplannedtostayaround2GWperyear.However,followingthenewcoalitionagreement,wecanexpecttoseethisnumbertoberevisedupwardinthecomingmonths.Theself-consumptionregimeunderwentprofoundchangeswiththeapprovalofthenewEEGlawinJanuary2021.Onthenegativeside,asofthisyear,onlyPVsystemswithacapacitybelow300kWwillfullybenefitfromtheself-consumptionscheme.Installationsbetween300–750kWcanonlysellupto50%tothegridforafeed-inmarketpremium.Alternatively,operatorsofthissystemrangecannowparticipateintenders.Asaresult,manysystemsbetween300-750kWwereinstalledinMarch2021asthetransitionperiodintheEEGexpiredinApril.Inthefollowingmonths,adecreaseinprojectsabovethe300kWthresholdwasobserved,confirmingthenegativeimpactofthenewlawonthesegment.5.35MW,Martnitz,Germany.©IBCSolarEUMarketOutlookForSolarPower2021-202545buildingswithausableareaofatleast50squaremetersasof2023.ThefirststatetostartwithmandatorysolarinstallationsonresidentialbuildingswillbeBaden-WurttemberginMay2022.TheEEGrevisionalsobroughtpositivechangesforcommunitysolarsystems,asegmentthathaslaggedbehindexpectationsforyears.Amongothers,operatorsdonothavetosupplypowerdirectlytothetenant,butalsoviathirdparties,likeutilities,whichisexpectedtomaketheschememoreuseful.AsshowninSolarPowerEurope’srecentEuropeanMarketOutlookforResidentialBatteryStorage2021–2025,GermanycontinuestobethekeyEuropeanmarketforhomebatteries,with121,000unitsexpectedfor2021,whichisequivalenttoastoragecapacityofalmost950MWh.ThelatestamendmentstotheEnergyIndustryActinJune2021includedaremovalofdoublechargesandleviestobatterysystems,enablingbetterutilizationofbatteries’flexibilitypotentialintheenergysystem.Forthenext5years,GermanyisexpectedtoremainEurope’sbiggestmarketbyfarforresidentialbatteriesthankstoaverystrongsolarmarketandveryhighretailpowerprices,aswellashighdemandforEVsandaquicklyincreasingnumberofsolarsystemsdroppingoutofthe20-yearlongFITscheme.Onthepositiveside,thenewlyformedcoalitionreachedanagreementtoabolishtherenewableenergysurcharge(theso-calledEEGsurcharge)asofJanuary2023.ThiscomesafterthecountryhaddecidedinOctober2021toslashthislevyby43%,from6.5downto3.7eurocentperkW.StartingfromJanuary2023,operatorsofsmallcommercialsystemsfrom10–30kWnolongerhavetopaytheFITsurchargefortheirself-consumedsolarpower.ThenewEEGlawraisedthethresholdforwhichrooftopsystemsarefullyexemptedfromtheEEGlevyforself-consumption,from10kWand10MWh/yearto30kWand30MWh/year.Thiswillinducethedeploymentofsmallcommercialsystems.Inthefuture,thegovernmentwillbecountingonthefederalbudgetandrevenuesfromEmissionTradingSystemstooffsetthefinanciallossoftheEEGsurchargetodeveloprenewables.Whilethenewgovernmentwantstomakesolarinstallationsmandatoryonallnewcommercialbuildings,itwantstoestablishsolarasacommonfeatureforresidentialhomes.ThisbuildsondecisionsofseveralGermanstatestorequiresolarinstallationsfornewbuildings.FollowingHamburg,Bremen,andBaden-Wurttemberg,BerlindecidedinJune2021tomakerooftopPVobligatoryonallnewandrenovated©IBCSolarEUMarketOutlookForSolarPower2021-2025464GW-scalesolarmarkets/continuedNexttocapacitygeneratedbytheself-consumptionregimeandauctions,PPA-basedprojectsarethethirdpillarofsolardevelopmentinGermany.Thelarge-scalemerchantsolarisanemergingtrendintheGermanmarket.EnBWinauguratedthecountry’largestPVsystem,a187MWsubsidy-freesolarparkisthelargestPVplantinNovember2021.Asutilities,largeinvestmentfunds,andprivateinvestorsareveryactiveinthissegment,weanticipatethePPAmarkettogrowstronglyinthecomingyears.ChallengesThenewgovernmentneedstorevisethecurrentFIT/FIPscheme.Thepopularityofsolarhasbeenresultinginquicklydroppingfeed-inratesinrecenttimes,whichareautomaticallyadjustedoncecertaininstallationthresholdsaremet.Asthesethresholdsarebasedonconservativegrowthassumptions,solarisnowabouttoreachlevelsthatmakeinvestmentforhouseholdsunattractiveattimeslabourandsolarsystempriceshavesignificantlyincreased.Anotherchallengeistheauctionschemeforsystemsbetween300–750kWintroducedinMarch2021.Theappetiteformid-sizedrooftopsystems,whichhavebeenamajorcontributortosolardeploymentinGermanyinrecentyears,isalreadydecreasing.However,thenewgovernment’scoalitionagreementdoescommittoreviewingthisissue.Thekeytaskwillbetogetallthejigsawpiecestogether–incentiviseinvestorsforrooftopandpowerplantsegments,smoothenpermitting,educateenoughinstallers,andcreatelocalacceptancefor140GWtobeinstalledinthenext9years.Authors:RaffaeleRossi,ChristopheLits&MichaelSchmela,SolarPowerEurope.©WACKEREUMarketOutlookForSolarPower2021-2025472.SpainThechallengesofourambitionSolarpowerisenteringintoamaturityphaseinSpain.Duringthelastthreeyears,around9GWhavebeeninstalled,triplingtheexistingcapacityattheendof2018.TheleadershipofSpainintherenewablePPAmarket,thetwoauctionscarriedoutin2021,andthegrowthofrooftopPV,havesetthefoundationformaintainingthepaceofthesolarmarketincomingyears.However,bothpolicymakersandtheindustryhavetobearinmindthatthemaintenanceofaGW-sizeindustrywillrequirecarefulattention.DriversforsolargrowthFollowingaprocessthatlastedafewyears,theSpanishParliamentapprovedintheClimateChangeActinMay2021,fixingadualtargetforrenewablesin2030:a42%shareinfinalenergyconsumptionanda74%shareinelectricitygeneration.Thelawalsoincludesaclausetoreview(onlyupwards)thetargetsin2023.Inordertomeetthesetargets,theSpanishNationalClimateandEnergyPlan(NECP),alsoapprovedin2021,foreseesasolarPVcapacityashighas39.2GWin2030–anincreaseofnearlythreetimesfromaround13.6GWnow.Inadditiontothevisibilitygivenbytheenergypolicy,themaindriverforsolargrowthinSpainisitscompetitiveness,inbothground-mountedplantsandself-consumption.Inground-mountedplants,theeconomiccompetitivenessofthetechnology(favouredbyeconomiesofscale),theterrainandsolarresourceavailability,andtheregulatorystabilityofrecentyearshavefosteredasupportiveecosystemthathasattractedtheinterestofdifferentactors:nationalutilities,Europeanutilities,companiesfromtheoil&gassector,IPPs,solardevelopers,investmentfunds,etc.Thissituationisacknowledgedbyinternationalobservers,suchasmarketresearchfirmIHSMarkit,whichconsidersSpainasthefifthmostinterestingmarketintheworldtoinvestinrenewables.Asaresultofthisecosystem,aconsiderablenumberofdevelopersandIPPshavedeployedGW-sizeportfoliosthathavebeensoldtonewcomersalsopursuingbrownfielddevelopment.Significantactivityinmergersandacquisitions(M&A)ismakingSpainoneofthelargestsectorsinEuropefortransactionsinrenewables.InadditiontoM&Aoperations,severalcompaniesareconsideringgoingpublic,whichspeaksaboutthegoodhealthandprospectsofSpanishsolarcompanies.ThepillarfortheimpressivedevelopmentoflastyearshavebeenPPAs.Alllarge-scalesolarcapacity50MW,Azaila,Teruel,Spain.©Iberdrola4GW-scalesolarmarkets/continuedEUMarketOutlookForSolarPower2021-202548commissionedduring2020(2.9GW)and2021(1.9GWuptoQ3)hasbeendevelopedwithoutanytypeofpublicaidorregulatoryscheme,thatis,allbymeansofPPAsormerchantprojects.AccordingtotheRenewableEnergyCountryAttractivenessIndexfromEY,Spainranksworld’sfirstintheassociatednewPPACorporateindex.SpainisalsotheleadingPPAmarketinEurope,accordingtoRE-Source.ThePVrooftopmarketisnotasmatureasground-mountedsolar.Thecurrentframeworkwasachievedonlyin2020withtheremovaloftheSuntaxonself-consumption,allowingautomaticsurplusremunerationandcollectiveandthrough-the-networkfacilities.Bothcompaniesandtheend-consumermarkethavebeengraduallygainingpacesincethen.Installedpowerhasbeenconsistentlyincreasingduringlastyears(715MWin2020,+30%comparedto2019),butSpainisstillfarbelowthetopEuropeanself-consumptionmarketsandthepotentialofitssolarresource.Onthepolicyside,themaindrivertobeexpectedintheshorttermistheNationalSelf-ConsumptionStrategy,whosenearapprovalwasannouncedbythegovernment,whichwillincludemeasurestofosterthissegment.Inadditiontopolicy,ithastoberemarkedthatSpanishnationalRecoveryPlanconsidersPVrooftopasoneofthemainmeasuresrelatedtoenergytransition.Infact,thegovernmentapprovedinJune2021RoyalDecree477/2021,authorisingthetransferof450millionEURtoSpain’sautonomouscommunitiesaimedatgivinginvestmentgrantstoself-consumptioninthefollowingsegments:•Industryandagriculture:150millionEUR•Commercial:100millionEUR•Residential,PublicAdministrationsandTertiarySector:200millionEURAutonomouscommunitiesnowhavetopasstheirownregulationtoopentheprocessforrequestingtheaids.Theprogramwillsupportprojectsuntiltheendofthefunds,orupto2023.Ifallthefundsareassigned–whichisconsideredcertain–thegovernmentcandoubletheinitialassignmentoffunds,transferringanother450millionEURtotheregions.AnotherdrivingforceforPVrooftopisgivenbythehighwholesaleelectricitypricesweareseeinginQ42021,whichservesasawake-upcallformany,particularlyindustrialandcommercialplayers.SOURCE:UNEF.©SOLARPOWEREUROPE2021FIGUREGW2SPAINANNUALSOLARPVMARKETSCENARIOS2021-2025,BYUNEF01,0002,0003,0004,0005,000AnnualPVcapacity(MWDC)CommercialResidentialIndustrialUtility-scale202320242025202120224,0003,5004,9003,8003,800EUMarketOutlookForSolarPower2021-202549Intermsofoutlook,expectationsareverypositive,withsomeremainingquestionsmarksthatneedtobefollowedcloselytoevaluatetheirimpact.Intheground-mountedsegment,assaid,theinstalledcapacitywasalreadyabove1.9GWbyQ32021,afigurethatwillreacharound3GWattheendoftheyear,accordingtoourestimates.For2022,themarketwillstillberelyinguponPPAsandweconsideritwilldevelopsimilarlyto2021.Thetwoauctionscarriedoutin2021(JanuaryandOctober)allocating2.9GWofnewsolarPVcapacitywillincreasethefiguresofdeploymentin2023.InthePVrooftopsegment,in2021itisexpectedthatthemarketwillcontinueitsgradualexpansion.Theimpactofnationalrecoveryplanfunds,thatcouldmakethemarketboom,willbeseenfrom2022onwards.ChallengesRegardingthechallenges,andtreatingfirstground-mountedplants,itisobviousthatthehigherthevolumeofprojectsunderdevelopment,thelargertheburdenoncompanies,theauthorities,localcommunitiesandotherstakeholders.ThisgeneraleffectisincreasedbytheRoyalDecree-law23/2020,whichimposesstrictdeadlinesontheplantsunderdevelopment:allprojectswithnetworkaccesspermitsinforcewhentheDecreewasapprovedhavetoobtaintheirenvironmentalauthorisationnolaterthanApril2022.Thisdeadlineobligescompaniestoadvancefastontheirpermittingproceduresandputsstrongpressureontheadministrativeauthorities,whoarestrugglingtoprocessthevolumeoffiles.Onthelocalcommunities’side,thesheervolumeofprojectsgoingthroughlocalpermitting(amountingtotwotothreetimestheNECPtargets),hasstartedtogenerateaNIMBY5effectinrecentmonths.Certainlocalassociationsareopposingutility-scalerenewableplants,requiringasignificantcommunicationeffortfromthecompaniesandUNEFaboutthebenefitsandtherealimpactsofsolarpoweronlanduseandbiodiversity,mitigatingtheriskofnegativemisunderstandingsspreading.ForrooftopPVthemainchallengeisthelengthofpermittingtimes,bothattheadministrationandatthenetworklevel,duetonon-homogeneousprocessesacrossmunicipalities,andthereducedexemptionsofnetworkaccesspermitsforrooftopPV.Inaddition,thesupportprogramstemmingfromthenationalrecoveryplanisslowingdecisionmakingbyclients,whoarenowwaitingforthefundstobeavailableintheirregion.ConclusionsThehightargetsofSpanishNECPandthesuccessofthenationalsolarpowermarketcallsforexcellencefromallparties:companies,administrationandpolicymakers.Inotherwords,ourambitionhastoovercomeourchallengestomaintainthesupportivesolarecosystemthatputSpainintheworld’stop10largestmarkets.Onthepolicyside,itiskeytoensureregulatorystabilityandtoeliminatetheremainingbarriersbystreamliningadministrativeproceduresandnetworkaccess,especiallyforsmallerPVplantsandself-consumptionprojects.Onthesectorside,companiesneedtorespondtothegrowingNIMBYeffect,presentingprojectswiththehigheststandardsintermsofenvironmentalsustainability,positivesocialimpactsandtransparency.Authors:JoséDonoso,DirectorGeneral;AlejandroLabanda,HeadofRegulationandStudies,UniónEspañolaFotovoltaica(UNEF).5NIMBY-NotInMyBackYard.4GW-scalesolarmarkets/continuedEUMarketOutlookForSolarPower2021-2025503.TheNetherlands12GWprojectpipeline,solarmustnowcompeteintenderswithCCSDespitetheCOVID-19crisis,themarketintheNetherlandslookssunnywithcapacityadditionsofalmost3GWin2020andaprojectpipelineof12GWwithSDE++subsidy-awardedprojects.Thispipelineincludesbothrooftopcommercialandground-mountedprojects,withrooftopcomprisingthelion’sshare.Themainchallengenowistoensurethattheseprojectsarebuilt.Currentlyaround70%ofsolarprojectsreachcompletion,includingatimelygridconnection.ManyfavourableprojectdevelopmentareasintheNetherlandsarenowexperiencinggridcongestion,whichmeansnonewprojectscanbeconnectedtothegrid.Despitethischallenge,itisexpectedthattheDutchsolarenergymarketwillcontinuetogrowagaintopass3GWin2021and4GWin2023(seeFig.GW3).Manysystem-sizerecordsin2020In2020,thebiggestmarketsegmentintheNetherlandswasthecommercialrooftopmarketwithashareofmorethan40%(approx.1.2GW)ofthetotalmarket.Theresidentialmarkethadashareofalmost40%(approx.1GW)whilethemarketforground-mountedandfloatingsolarPVaccountedformorethan20%(approx.0.6GW).Whileitsrelativemarketsharedecreased,theresidentialmarketkeptgrowingsteadyinabsoluteterms.Thispartofthemarketisexpectedtostabiliseatalevelofabout1.0-1.2GWperyear.ResidentialsolarisanimportantmarketsegmentFIGUREGW3NETHERLANDSSOLARPVMARKETSCENARIOS2022-2025,BYHOLLANDSOLAR012345GWHistoricalresidentialHistorical(all)HistoricalcommercialHistoricalutility-scaleForecastresidentialForecastcommercialForecastutility-scale2022202320242025201520142013201620172018201920202021SOURCE:HollandSolar.©SOLARPOWEREUROPE2021EUMarketOutlookForSolarPower2021-202551relevantNGOs,keyrequirementsforparticipationarehighlightedandthecodeofconductisdemonstratingitsimpact.Notallprojectsaredeliveredwithouthiccupsfromlocalresidents,butincludinglocalcompaniesandresidentsindevelopmentprocessesshowsthatawin-winsituationcanbeachieved.ProjectdevelopersintheNetherlandsdoneedsupportivelocalgovernmentsthatensurealevel-playingfieldfordiscussionsbetweenthedeveloperandlocalresidents.SmoothingthiselementofdevelopinggroundmountedsolarparksisoneofHollandSolar’spriorities.BiodiversitylabelandresearchleadtodoublelanduseConcernsfrommunicipalitiesandenvironmentalNGOshaveledtheDutchsolarsectortosetupalarge-scaleresearchprojecttodevelopwaystomaximiseexistingbiodiversityinandaroundground-mountedsolarparks.Theprojectwillallowdevelopersoftheseparkstorequestabiodiversitylabelfromanindependentcertificationinstitutiontoprovetheircontributionstonatureinadditiontoproducinggreenelectricity.ThelabelwillbebasedonindependentscientificresearchdonebytheWageningenUniversity,arenownedinstitutionfornatureandbiodiversityresearch.Withthisnewlabel,thesectorhasmanagedtosolidifyitslicencetooperateintheNetherlandswhenitcomestoground-mountedsolarparks.ReducingperceivedrisksoffireforrooftopsolarInthepastfewyearsinsurancecompaniesintheNetherlandshavebecomeincreasinglyvocalabouttheallegedincreasedrisksoffirecausedbyrooftopsolarinstallations.Thediscussionincitedbytheinsurancecompanieshascausedthemarketforlargescalerooftopsolartoslowdown.InNovember2021,anindependentstudyinitiatedbytheDutchgovernmentprovedthatrisksoffirearelimited.Inaddition,thesectormetwiththenationalfirebrigade,insurancecompanies,andrepresentativesoftheinsulationindustrytocreateanewcodeofconductforlargescalesolarroofs.Thisnewcodeofconductsatisfiesrequirementsfrominsurancecompaniesandensuresthatbuildingownerscanbeconfidenttheircommercialsolarinstallationsarefire-safe.Thecodeofconductcanbefoundhere.fortheNetherlands,especiallyincreatingawarenessandsupportfortheenergytransitionamongcitizens,leadingtogreateracceptanceofthespatialconsequencesthatcomewithintroducingground-mountsolarpowerplantsandwindenergyintotheenergymix.InOctober2021,a176MWsolarparkwasgrantedsubsidyintheSDE++.Oncerealised,thiswillbecomethelargestsolarparkintheNetherlands.Anincreasingnumberoffloatingsolarprojectswerealsocompletedin2021,thelargestofthemistheSellingerplasproject,withmorethan72.000solarpanels–thelargestinEurope.Thisisinlinewithanincreasinginterestinmultifunctionaluseofspace,likesolarcarports.InMay2021,a35MWsolarpanelcarportwasconstructedonafestivalsiteinDronten.Dutchpolicy/REtargetsTheNetherlandshasanimpressivesolarpipelineofover12GW.Withthispipeline,andthesuccessfulcompletionofseveralwindprojects,itislikelythatthe2030NationalClimateAgreementtargetof35TWh/yrrenewableenergyproductiononlandwillbemet.However,theDutchNationalClimateAgreementwasagreeduponin2019anddoesnotyetconsiderthehighertargetsrelatedtoEU’snewambitionof55%GHGemissionsreductionby2030.Ontopofthat,thetargetdoesnotincludeaforecastfortheincreaseindemandforrenewableelectricityfortheindustry,builtenvironmentandmobility.Thesectorisnowdiscussingwhatthenewnationalambitionsforrenewableenergyproductiononlandoughttobe.NewrenewableenergyproductiontargetswillbeneededforthesectortobeabletoparticipateintheyearlytenderschemeSDE++after2023.LocalparticipationhasamoreprominentroleinRegionalEnergyStrategies(RES)AsestablishedintheNationalClimateAgreement,therenewableenergysectorisstrivingfor50%localparticipationinrenewableenergyprojects.Asthepipelinemovesup,moreandmoreprojectshaveasignificantcomponentoflocalparticipationintermsoffinance(e.g.,localownership),andspatialimpact.InthecodeofconductwrittenbyHollandSolarand4GW-scalesolarmarkets/continuedEUMarketOutlookForSolarPower2021-202552DriversforsolargrowthTheDutchresidentialsolarmarketisdrivenbynet-metering.Thereisnolimitationorchargefornet-delivery.AproposalsupportedbytheDutchsolarsectortograduallyphaseoutthenet-meteringscheme,witha9%decreaseeveryyearupuntil2031hasnot(yet)madeitthroughparliament.Duetoapoliticaldeadlock,andthelimitedpowersoftheinterimgovernmentinplacesinceMarch2021,–thecurrentgovernmentisholdingoffonputtingthisproposaltoavote.Thisdegressivepathisbasedonaseven-yearpaybacktimefortheprosumer,assuming30%self-consumptionandanoptimalsituation.InthelightofthenewFitfor55discussionsinBrussels,inparticulartheproposedchangestotheEnergyTaxationDirective,thecurrentDutchproposalwouldbecomeoutdated.Therefore,thesectorintendstodevelopaproposalinwhichaseven-yearpaybacktimecanbeachieved,whilethenet-meteringschemeisalsograduallyandclearlyreducedovertheyearsinordertoincentivisemoreflexibilityinthesystem.Nonetheless,withmorethan1.5millionhouseholds(aboutonefifthofallDutchhouseholds)havingsolarpanels,thissegmentisandwillcontinuetobeanimportantdriverforcontinuousgrowthintheDutchSolarsector.Thecommercialandutility-scalemarketintheNetherlandsisdrivenbytheSDE++tenderingscheme,wheresolarenergyprojectscompetewithotherrenewableenergyprojectsandotherCO2reducingtechnologiessuchasCCS.Inthistenderingschemedifferentmaximumcapacitiesareonoffer,dependingontechnology(wind,biomass,solar),size,andapplication(ground-mounted,rooftop,floating).TherankingintheschemeisbasedonEuroperktofCO2avoided.ThemaximumSDE++contributiondecreaseseveryyear,sowithincreasingmodulepricesandincreasinglogisticcoststhereisachancethat,forthe2022round,thisdecreasingsubsidylevelwillneedtobemitigated.Inthe2020roundinOctober,atotalof3.6GWsolarprojectsweregrantedsubsidy.Abouthalfofthatisground-mountedandtheotherhalfislargerooftopsolar.Theexpectationisthatsolarenergyprojectscanbedeveloped,withoutanyincentives,basedonPPAcontractsby2025atthelatest.Utility-scalesolarisestimatedtoreachgrid-parityaround2023,dependingonthedevelopmentofelectricityprices.41.4MW,Sellingen,theNetherlands.©GroenLevenEUMarketOutlookForSolarPower2021-202553ChallengesOneofthemainchallengesforthesolarenergysectorintheNetherlandsistotimelysecuregridconnections.Forthecomingyearsthesectorisexpectedtofaceseriousdelaysandpossiblyprojectnon-realisationcausedbyalackofgridcapacityonthehigherandmiddlevoltagelevels.Additionalreservecapacitywillbeputintogeneralusebythegridoperatorsin2022.Legallimitationstocablepooling,whichcombinessolarandwindprojectsinco-locationwithbatteries,alsohavetoberesolvedurgently.Thesectoriscontributingtothisdiscussionbymaximisingthegridconnectionperinstallationto70%ofthemaximumcapacity.Fortheyears2022-2025,batteryandflexibilitysolutionsprovidedbythemarketwillrequiremoreincentivesfromgridoperatorsandtheDutchgovernment.Anotherchallengethesectorfacesistheavailabilityofland,especiallyforutility-scaleprojects,aswellassocialacceptancewhenitcomestousingagriculturallandforsolarenergyprojects.Withthecurrentpoliticaldeadlock,thesectorisanxiouslywaitingforthepositionofthenewgovernmentontherighttocontinueusingagriculturallandfortheproductionofsolarenergy.Authors:PeterMolengraaf,President;WijnandvanHooff,GeneralManager;AmelieVeenstra,PolicyDirector;NoldJaeger,PublicAffairs,HollandSolar.BEFORETHEREISASOLARPANEL–THEREISWACKERCREATINGTOMORROW’SSOLUTIONS•LowCarbonFootprint•HighEfficiencyandDurability•MadeinEuropeWackerChemieAG,Hanns-Seidel-Platz4,81737Munich,Germany,Phone:+49896279-0,www.wacker.com/contact,www.wacker.com/solarFollowuson:4GW-scalesolarmarkets/continuedEUMarketOutlookForSolarPower2021-202554from,thegrid.In2021,prosumersproducingenergyinupto10kWinstallations,couldfeedoneunitofenergyintothegrid,andreceive0.8unitsofenergyforfree.Forlargerinstallationsabove10kWthisratiois1to0.7.Moreover,prosumersdonotpaythedistributionfeesforusingthegrid.Anadditionalsupportformicro-installationscamealsofromdedicatedgovernmentalprogramssuchastherebatescheme“MyElectricity”,whichprovidesamaximum5.000PLN(1.089EUR)forhomesystemssizedbetween2-10kW,withthepossibilitytodeductpartofthecostfromincometax.Thelargegrowthinthenumberofmicro-installationsinPolandprovedtobechallengingfordistributionnetworksandisleadingtochangesinthepolicyframework.On1stApril2022,thenet-meteringsystemwillbereplacedbyanewnet-billingsystem,wherebytheamountofelectricityintroducedandtakenfromthegridwillbebalancedinanhourlysettlementusingameteringsystem.Underthenewscheme,prosumerswillberewardedforsurplusenergyfedintothegridatthewholesaleprice,andtheywillpayfortheconsumedenergyjustlikeotherelectricityconsumers.Thenewsystemisasignificantstepbackforprosumersandwillextendthetimeofreturnoninvestmentorevenmakeitimpossible,dependingonenergypricesandinstallationcosts.Thisisthereasonwhyhouseholdsinterestedingeneratingenergyfortheirownusewillwanttoinstalltheirsystemsbeforethenewprosumerbillingsystemislaunched.Weanticipatethatthischangewilldrasticallyreducethemarketforsmallrooftopsystems.However,evenifthedeploymentofmicro-installationsslows,weexpectastrongdevelopmentofanotherPVsegment:large-scalesolarprojects.Thegrowthofthissegmentwillbeprimarilydrivenbynationaltenders.AuctionsarecarriedoutatleastonceayearbytheEnergyRegulatoryOffice(URE),whereprojectsbelow1MWandabove1MWareplacedindifferentbaskets.Thefirsttechnologyneutralauctionforprojectsabove1MWheldinNovember2018wasdominatedbywindenergy,butthesituationalreadystartedtochangebythefollowingauctioninDecember2019,whenPVprojectsequalledthecapacityawardedtowindfarms.ThelastauctioninJune2021showedagreatsolarperformance,withmorethan1.2GWofawardedPVprojectscomparedtoabout0.3GWallocatedtowindprojects.ThereferencepriceforPVwas320PLN/MWh(69.7EUR/MWh),andthemaximumpriceatwhichthe4.PolandFomsmalltowardslarge-scalesolarInPoland,wehavebeenobservingthedynamicdevelopmentofphotovoltaicsforovertwoyears.AllplansandforecastsforthedevelopmentofthissectorinPolandareunderestimated.AttheendofSeptember2021,therewere6.3GWofPVinstalledcapacity.Itisestimatedthatthistotalcapacitywillsurpass7GWbytheendof2021.MostofthiscapacitywillbeconstitutedbysmallPVsystemsbelow50kW(micro-installations),whichareexpectedtogrowtoover1millionunitsbytheendoftheyear(seeFigureGW4).ThissubstantialincreaseinPVcapacityhasbeenprimarilyduetoafavourableself-consumptionschemeforprosumers,anet-meteringsystemthatusesadiscountmechanismtobalanceoutacrosstheannualenergythatwasdeliveredto,andpurchasedSOURCE:PSEandARE.©SOLARPOWEREUROPE2021FIGUREGW4POLANDSOLARPVCUMULATIVECAPACITY2017-202102,0001,0004,0003,0006,0005,0008,0007,000Cumulativecapacity(MW)>50kW<50kW20182017201920202021e2584881,4693,8977,100EUMarketOutlookForSolarPower2021-202555facilitatingsuchasolutionwereproposedinthedraftamendmenttotheenergylawandtheRESAct.ThePVsectorinPolandisstrugglingwithafewobstacles,aboveallthelackofgridconnectionpointsfornewinstallationsandthecurrentproblemswiththetimelyimplementationofprojects,whichisaconsequenceoftheglobalpricehikesanddelaysinPVmanufacturing.Onthepositiveside,inthemediumterm,fallingrenewableenergycosts,thechangingroleofcoalandnewbusinessmodelsintheenergysector–includingmicro-sourcesanddistributedenergysources–arejustsomeofthetrendsthatwillshapethesolarmarketinPoland.Allthesefactorscontributetoincreasingthesocietalawarenessofenvironmentalissuesandimprovepeople’ssupporttothetransitiontorenewables.Maintainingthepaceofnewcapacityincreasewouldalsobefacilitatedbytheimplementationoftheso-calledcablepooling–thepossibilityofsharingapowerlineforPVandwindfarms.Itnotonlysolvestheproblemofthelackofconnectioninfrastructure,butalsoperfectlyimplementstheideaofcomplementingvariousrenewablesources–windmillscanprovideelectricityatnight,autumnandwinter,andphotovoltaicsonsummerandspringdays.Authors:PaulinaWojciechowska,CommunicationOfficer,PolskieStowarzyszenieFotowoltaiki(PSF);StanislawM.Pietruszko,President,PolishSocietyforPhotovoltaics(PVPoland).energywassoldwas243PLN/MWh(52.9EUR/MWh).Thedifferencebetweenthesepricesof79PLN/MWh(16.8EUR/MWh)showsthehighcompetitivenessofsolartechnologiesandtheincreasingsupplyoflarge-scalesolarprojects.ForthenextauctioninDecember2021,itisexpectedthatsolarwilltakethemajorityofthe998MWtenderedcapacity.Theauctionsforsystemsbelow1MWarealsobeingdominatedbysolar.Asaresultofthelastoftheseauctions,whichalsotookplaceinJune2021,almost1GWofnewcapacitywillbeinstalled.Interestinlarge-scalesolarisduetothefactthatPolandisalreadyexperiencingashortageinenergyproductioncapacity,andthistrendissettobecomeevenstrongerduetotheimminentdecommissioningofnumerousconventionalplantsastheirlifecyclecomestoanend.Withregulatorybarriersobstructingonshorewinddevelopment,PViscurrentlytheonlytechnologythatcandelivernewenergyproductioncapacitywithinashorttimeframe.ThedemandforgreenenergyinthecomingyearsinPolandwillalsobedrivenbytheenergy-intensiveenterpriseswhoseektosecureaccesstoclean,affordableenergytofueltheirproductionandlowertheircarbonfootprint.ThisrequirestheliberalisationofregulationsontheconstructionofenergynetworksandenablingthedeploymentofdirectlinesconnectingaPVinstallationwiththeenduser.Legalchanges64.6MW,Witnica,Poland.©BayWar.e.www.alternusenergy.comcontact@alternusenergy.comEUMarketOutlookForSolarPower2021-202557SolarPVtargetsinFranceThe2015EnergyTransitionforaGreenGrowthlawsetThe2015EnergyTransitionforaGreenGrowthlawsetambitiousgoalsfor2030,whichwerealsoconfirmedintheClimate&EnergyLawadoptedlastyear.TheseobjectiveshavebeenimplementedforeachtechnologythroughtheMulti-AnnualEnergyProgramme(MAEP).Thisdefinescleartrajectoriesandvolumetricobjectivesforthecoming10years.TheMAEPobjectivefortheendof2023,whichrequiresanoperatingsolarfleetof20.1GW,hasachievedmorethanhalfitsgoal,currentlystandingat61.3%.ArevisedversionofthefirstMAEP,adoptedinspring2020,confirmedthewillingnesstostronglyacceleratethedevelopmentoftheFrench‘solarpark’.Thenewtargetspresentedfor2028liebetween35.1GWand44GWincumulativecapacity.Thesetargetssuggestthattheannualmarketneedstoriseto3to4GWperyearbetweennowand2028.Thismeansbetween330and400km²ofground-mountedPVareawillbeinstalledinFrance,withbetween150and200km²ofrooftopinstallations.Therefore,solarpowerispositionedasoneofthemostimportantcontributorstotheFrenchenergytransition.5.FranceReachingthe2GWlevelOverviewofsolarPVdevelopmentsTheFrenchsolarfleethasenteredanaccelerationphase:forthefirsttime,morethan2GWwereconnectedinlessthanayear.With621MWconnectedduringthethirdquarterof2021and2,162MWconnectedoverthepast12months,theFrenchsolarfleetnowamountsto12,329MW.Thesefiguresshowthattherehasbeenasignificantdevelopmentinthesolarsectorsincethestartoftheyear,particularlyinthemediumandlargerooftopsegments.Electricityproductionfromphotovoltaicsourcesstandsat4.8TWhinrecentmonths,thankstonewconnectedcapacities.Thecoveragerateforelectricityconsumptionbysolarenergythusstoodat5%duringthethirdquarterof2021.FIGUREGW5.1FRANCEANNUALANDCUMULATIVESOLARPVCAPACITY2010-2021,BYSER02,0004,0006,0008,00010,00012,00014,000MWConnectedsolarpowerperyearCumulativeconnectedsolarpower201920202021September20122011201020132014201520162017201810,40212,3299,5048,5767,6566,7736,1965,2974,3663,7272,5848788981,9279279218835778999316391,1431,706688SOURCE:SER.©SOLARPOWEREUROPE20214GW-scalesolarmarkets/continuedEUMarketOutlookForSolarPower2021-202558SOURCE:SER.©SOLARPOWEREUROPE2021FIGUREGW5.2FRANCECUMULATIVESOLARPVGRIDCONNECTEDCAPACITYQ22021,BYSER<36kW;18%36-100kW;17%100-250kW;11%>250kW;54%FIGUREGW5.3FRANCEMULTI-ANNUALENERGYPROGRAMMESOLARPVTARGETS,BYSER05101520253035404550GWInstalledcapacityFirstMEAPtargetRevisedMEAPlowtargetRevisedMEAPhightarget20082009201020112012201320142015201620172018201920202021202220232024202520262027202820.14435.1SOURCE:SER.©SOLARPOWEREUROPE2021EUMarketOutlookForSolarPower2021-202559Inalonger-termperspective,itisalsoimportanttonotethat,initsrecentlypublishedreportwhichstudiedsixmainscenariostoreachcarbon-neutrality,RTE(theFrenchtransmissionsystemoperator)foresees70to208GWofsolarcapacityinstalledin2050.DriversforsolargrowthCallsfortendersarethemaindriverforachievingsolargrowthtargets,with3.2GWscheduledeveryyear.Two-thirdsofthesetenderswillbeground-mountedinstallations.Theremainingthirdwillbeaccountedforbyrooftopinstallations.Formanyyears,theFrenchrenewableenergyassociation(SER)advocatedthatprojectsforrooftopinstallationsbelow500kWshouldbeexemptfromtenderingproceduresandeligibleforafeedintariff(FIT),inlinewiththecurrentEUStateAidGuidelines.AftermorethanayearofworkwiththeFrenchgovernment,thenewthresholdhasbeenimplementedthisautumn.RaisingtheFITthresholdfrom100kWto500kWismakingthingseasierforthismarketsegment,whereprojectswerepreviouslylimitedbytenderingprocedures.Thereisnodoubtthatthischangewillgeneraterenewedimpetustodeveloprooftopinstallationprojects.Additionally,theself-consumptionmarketforwhichadedicatedframeworkhasbeenputinplaceisgrowingrapidly,butstillrepresentsasmallinstalledcapacity.InQ2/2021,134,111installationswereself-consuming,representing597.5MW.ChallengesReachingatargetof44GWofsolarpowerinFranceby2028,comparedtothe11.7GWcurrentlyinstalled,requiresregulatorychangesthatsupportthegrowthofallmarketsegments.Firstandforemost,oneneedstowidentheperimeterofeligiblelandincallsfortendersforgroundmountedprojects.Giventhe2028MEAPtarget,andgiventhatthedistributionofmajorprojectsremainsconstant,wecanexpectalmosttwothirdsofsolarpowertobeinstalledontheground.Therefore,ageneralreflectiononlanduseisnecessarytotakeintoaccounttherealimpactofPVprojectsonsoilsandtofacilitatetheirdevelopment.Inaddition,innovativePVprojectswithespeciallylowland-useimpact,suchasagri-PVandfloatingsolar,shouldbeencouraged.Agri-PV:solarongreenhousesinLüe,France.©SMA4GW-scalesolarmarkets/continuedEUMarketOutlookForSolarPower2021-202560centers(INES,IPVF,etc.),thedevelopmentoftheFrenchindustry’sinnovationcapacitiesandtechnologicalbreakthroughswillalsoimprovecompetitiveness.Finally,asmentionedabove,self-consumptionisstillasmallmarketforsolarPVenergy.Thesupportmechanismsforself-consumptionprojectsneedtobeadaptedsoastoenhancethevalueofallelectricityproduced,self-consumed,andinjectedintothegrid.Thisneedstooccuratalevelthatallowstheprojectstobefinanciallysecured.Openingupself-consumptionwithoutpenalisingconsumers,whoarenotalwaysabletoconsumealloftheirproduction,isanotherwayforward.Author:MarieBuchet,HeadofSolarPower&SolarHeat,SyndicatdesEnergiesRenouvelables(SER).Moreover,thedevelopmentofphotovoltaicprojectsistightlyregulated.Someadministrativeproceduresandarchitecturalplanningissueshavetobeclarifiedandsimplified.Somelocalservicesmayhaveanambiguousanddebatableinterpretationoftheframeworkinplace.Thiscansometimegobeyondcurrentregulation,suchasfireprotectionrules.Administrativedeadlinesalsoneedtobeshortened.FrancepromotesalowcarbonfootprintsolarPVindustry.Thecarboncriteriainthecallfortendersisseenasafundamentalpillarofanindustrialstrategywhichshouldgohand-in-handwiththemarketdevelopment.InlinewithwhatSERadvocated,thecarboncriterionisnowsetat550kgCO2e/kWinthenewcallfortenders’specifications,whichwerepublishedthissummer.ThiscriterionisalsonowrequiredtoapplytothenewFITforrooftopinstallations.ThankstotheworkofstrongR&DEUMarketOutlookForSolarPower2021-2025616.GreeceTheRenaissanceoftheGreekPVmarketIn2020,amidsttheCOVID-19crisis,Greeceinstalled0.9GWofPV,halfofwhichwereconnectedtothegridbytheendofDecember,whiletherestin2021.AlegislationwhichpassedbytheGreekParliamentin2020gavetherighttoPVdeveloperstosecureahighertarifffortheenergyfedintothegrid,basedonadeclarationof“readinessforconnection”andnotontheactualconnectiondate.Asaresult,therewasaboomininstallationsbeforeyearend.The2021marketisexpectedtoreachthe1GWthreshold,asthereiscurrentlyaboomofinvestments,mainlyformediumandlarge-scaleground-mountedPVprojects.Mostconnectedsystemshaveacapacityof500kW(atrendwhichisexpectedtocontinuein2022aswell)whilelargersystemsareexpectedtotaketheleadintheyearstofollow,asmorelarge-scaleprojectsmatureandreachtheconstructionstage.Recentlegislationhasextendedthefeed-in-premiumschemeforsystemsupto500kWuntiltheendof2022,andthishastriggeredalotofinterestbymedium-sizeinvestors.Uptonow,thepotentialpipelineofPVprojectsinGreecehasreached85GW,includingmanylargeportfoliosofhundredsofmegawattseach.AllmajorenergyplayersinGreecearenowinvestinginPV,includingalloilandgasmajors,whiletherearemanyforeigninvestorsinthecountryaswell.Atthesametime,theGreekgovernmentisrevisitingrelevantlegislationaimingatthesimplificationoftheauthorizationprocess.Drasticchangeshavealreadybeendecidedin2020andmorepositivemeasuresareexpectedbyyearend2021and2022.Atthesametime,theregulatoryframeworkforenergystorageisbeingpreparedandisexpectedtobeinplaceinQ1-2022.Uptonow,thereareapplicationsfor12GWofstand-alonelarge-scalestoragesystems,makinguseofoldregulations.Thegovernmentplanstohaveauctionsforstoragein2022(forstand-alonestoragesystems)and2023(forPVplusstoragesystems).SOURCE:HELAPCO.©SOLARPOWEREUROPE2021FIGUREGW6.1GREECESOLARPVMARKETDEVELOPMENT2007-2020,BYHELAPCO00Annualcapacity(MW)Cumulativecapacity(GW)Annualcapacity(leftaxis)Cumulativecapacity(rightaxis)200720082009201020112012201320142015201620172018201920202005001,0001,5002,0002,5003,0003,5004,0004006008001,0001,2004GW-scalesolarmarkets/continuedEUMarketOutlookForSolarPower2021-202562SOURCE:HELAPCO.©SOLARPOWEREUROPE2021FIGUREGW6.2GREECESOLARPVCUMULATIVECAPACITYSEGMENTATION2020,BYHELAPCORooftop;15%Ground-mounted;85%1MW,Kastoria,Greece.©FroniusThegovernmentisplanningtocontinuetheauctionschemeforPVandwinduntiltheendof2025.Intotal,3GWwillbeauctioned,and,consideringthecostofeachtechnology,PVisexpectedtowintwothirdsofthetotalcapacity.Apartfromauctions,PVinvestorsnowhavetheoptiontoparticipateinthewholesalemarketsforsubsidy-freeprojectsorsignacorporatePPAwithinterestedconsumers.AlthoughtheselastTheNationalEnergyandClimatePlan(NECP)foreseesashareof63%forRESby2030,andaPVcumulativecapacityof7.7GWbytheendofthedecade.ThisplanisnowbeingrevisedtotakeaccountoftherecentmoreambitiousEUtargets.ItisrealistictoexpectthatthenewtargetforPVwillbeover10GWby2030.Asaresult,theoutlookforPVlooksbrightwiththemarketfloatingaroundatleast1GWperyearuntil2025.EUMarketOutlookForSolarPower2021-202563Contrarytotheground-mountedprojects,whichdominatetheGreekPVmarket,theresidentialmarketisdevelopingveryslowly.Self-consumptionisnowbeginningtoemerge,mainlyinthecommercialsector,whilethegovernmentplanstore-introduceafeed-in-tariffschemefortheresidentialsector.EnergyCommunitiesarealsobecomingpopulararoundthecountry,whilePVsystemswillbeallowedagaininthelargestislands(suchasCrete)wherethemarketwasfrozenformanyyears.Author:SteliosPsomas,PolicyAdvisor,HELAPCO.optionsarenewforGreece,theyareexpectedtotakealargeportionofthemarketintheyearstocome.TherealbottleneckforfastPVdeploymentisnowtheavailabilityofgridcapacity.Mostofthemedium-voltagegridsarenowcongested,andthesamewillhappensoonwiththehigh-voltagegrids(150kV).Mostmajorplayersarenowlookingattheultra-highvoltageof400kV,anoptionwhichincreasestheoverallcostoftheirprojects.Nevertheless,evenconsideringtheriseinequipmentcostworldwide,PVprojectsinGreeceremainaprofitableandattractiveinvestment.5MW,Mesokomo,Greece.©SteliosPsomas/HELAPCO4GW-scalesolarmarkets/continuedEUMarketOutlookForSolarPower2021-2025647.DenmarkOverviewofPVdevelopmentsIn2021,forthefirsttimesincethebeginningofsolarPVinstallationinDenmark,thecountryexpectstoimminentlybecomeagigawatt-scalemarket.Thiscrucialmilestonehasbeendrivenbytheutility-scalemarket,whichhasdemonstratedsteadygrowthinrecentyears,andispoisedtoenjoyevenstrongerdevelopmentincomingyears.Sofar,Danishutility-scalesolarhasnotbeenpromotedthroughpublicauctions,buthasbeenrelyingonsubsidy-freesolarprojects.Whilelarge-scalesolarisintheprocessofexpandingrapidlybeyondtheGWlevel,therooftopPVsegmentpresentlyremainssmallinsize.Theresidentialmarketpeakedin2012and,exceptforasmalltrailinto2013,hasdecreasedtoalowbaseline,withlimitedgrowthperspective.TheC&Imarkethasalsobeenfairlysmallformanyyearsbutisstartingtopickupwithpromisinggrowthrates,withagoodpositiontocontinuethepositiveupwardtrend.DriversforsolargrowthAsofOctober2021,theaccumulatedutility-scalecapacityinDenmarkis773MWACdistributedinto41parks,including173MWACinstalledthisyear.Basedoninformationcollectedfromthefivemajorsolardevelopers,anadditionalcapacityof800MWACisexpectedtobegrid-connectedinthefinalmonthsof2021.Withatotalprojectpipelineof20GWAC,thesedevelopersexpecttoinstall1.5-2GWACperyearoverthenextfiveyears.TheDanishutility-scalemarketbenefitsfromwell-functioningandtransparentregulations,withrespecttoplanningpermissionandgridconnectingprocedures.ThisdoesnotmeanthattherequirementsandformalitiesarelessdemandingthaninotherEUsolarmarkets,butanefficientdialogandproblem-solvingattitudecanbeexpectedwheninteractingwithmunicipalitiesandutilities.Besidesthefavourableconditionsforplanningpermissionsandgridconnection,thereareseveraladditionalfactorsthatexplainthissignificantinterestinlarge-scalesolarparks.Increasingpowerprices,anexpectedfurtherpricereductionofsolarPVcomponents,thematurityofthePPAmarket,increasedopportunitiestouselowlandandwetlandareas,wherecurrentdrainswithanewclimateagreementforthefarmingsectoraresettoberemovedtoincreaseCO2accumulation,andtheemergenceofhybridwind-solarprojectsallplayaroleintherisingfocusonsolarutilityprojects.Furtherdriversareprovidedbythepublicsector,withpotential33.9MW,Zeeland,Denmark.©EuropeanEnergyEUMarketOutlookForSolarPower2021-202565difficulttofulfil,whichmayalsoreducethegrowthcomparedtotheoutlookpresentedinthisanalysis.Regardingtheresidentialsegment,thankstoanattractivesupportschemebetween2012and2013morethan80,000residentialsystemswereinstalled.However,since2014,whenthelastPVsystemsbenefittingfromthissupportschemewerecompleted,onlyca.2,500installationswithatotalof10MWAChavebeeninstalledperyearinthiscategory.Basically,theeconomicincentiveforprivatehomeownersisquitelimited,duetothechallengetoreachasufficientdegreeofself-consumption.Thus,todaythedriverforresidentialinstallationsremainstobeidealismandambitionsofindividualhomeownerstocontributetothegreentransition,aswellasenergyefficiencyrequirementsfrombuildingcodes.Cheaperbatteriesmaygenerateamorepositivebusinesscaseinthismarket,whichisexpectedtogrowwitha20%compoundannuallygrowthrateoverthenextfiveyears.state-sponsoredincentives,guidelinesorroadmapsforastrongersupportwithaminimumdeploymenttargetofrenewablesforallDanishmunicipalities.Atemporarysupportschemetodecreasegridconnectioncostsisalsocurrentlyinplace,andmaybeprolongedbeyond2022.Bycontrast,themarketforC&Iinstallationshavebeenquitelimitedforthelastsixyears,withanaveragecapacityaround15MWACperannum.InthismarketseveralfactorssupporttheassumedhighCAGRof25%and66%respectively,namelynewopeningsforthird-partyfinancing,increaseddepreciationforsystemsupto1MWby116%in2022,opportunitiestoestablishenergycommunitiesandoverallcommercialfocusontherenewableenergy.Factorsthatmayworkagainstthisgrowthwouldbethelimitedeconomicincentive–unlessahighdegreeofself-consumptioncanbeensured.Furthermore,thenetworkcodesforsuchgeneratorsdorepresentasignificantadministrativeburdenandcandemonstratetobeSOURCE:DanishSolarPower(DSP)andDanishPVAssociation(DPVA).©SOLARPOWEREUROPE2021FIGUREGW7.1DENMARKSOLARPVMARKET2021-2025,BYDSPANDDPVA0MWACRooftopUtility-scale202320222021202420255001,0001,5002,0002,5002,1122,0822,0561,5381,0274GW-scalesolarmarkets/continuedEUMarketOutlookForSolarPower2021-202566Additionalchallengescomefromtheinteractionwithexternalstakeholders.AsinotherEuropeancountrieswhoareexperiencinglargegrowthofutility-scalesolar,therearerisksofanincreasedlocalresistancetolargeground-mountedprojects.Wealsosignalareducedmunicipalitysupportforpermittingofnewrenewableprojectsthatislinkedtotheoutcomeofmunicipalityelectionstakingplaceinlate2021.Forallmarkets,challengesarealsoexpectedtolastuntiltheendof2022,whichintroducessignificantuncertaintytothisoutlook.Thisincludes,ontopofacontinuationofthecurrenthighmoduleprices,difficultcommercialconditionswithrespecttopricerenegotiationsforPVmodulesandchaoticshippingconditionsasseeninthesecondhalfof2021,whichmightinfluencethefinalisationofthePVprojectscurrentlyunderconstruction.OutlookWhile2021isexpectedtobethefirstyearwhensolarreachedtheGWscaleinDenmark,thisstatuswillalsobemaintainedinthefuture.Ourfive-yearoutlookforeseesthatthemarketwillreach1.5GWACin2022andwillsurpassthe2GWACmarkfrom2023onwards,drivenbythelargedemandforlarge-scalesolar.Ifthebulkofinstalledcapacitywillkeepbelongingtotheutility-scalesegment,rooftopinstallationsarealsoonapositivegrowthpath.TheannualmarketofresidentialandC&Isolarcombinedwillgrowfrom27MWACin2021to112MWACby2025.Author:ThomasAarestrupJepsen,CEO,DanishSolarPower;FlemmingKristensen,Chairmanoftheboard,DanishPVAssociation.ChallengesAdelayedanduncertainnewtariffregimeforgridconnectionshouldbeintroducedbyJanuary2023.Whilethedetailsofthismeasurearestillunknown,thenewtariffsproducerswouldhavetopayareexpectedtobefairlyhigh.Moreover,therewillbeageographicdifferentiationofthegridconnectiontariffs,whichwillbehigherinthoseareaswherePVaremostlikelytobeinstalled–thelesspopulatedpartsofthecountry.Inaddition,thecurrentsupportschemedecreasinggridconnectioncostsisonlytemporary,anditsextensionissubjecttodiscussion.WesupportPVsystemsWesupportphotovoltaicsystemsforanyroofaroundtheworldsince2004.Easy,fastandsafe.k2-systems.comINNOVATIVESOLUTIONSFORPV-MOUNTINGINSTALLATIONSRENEWABLEENERGYLookingforapartnerwithoutstandingexperienceintheindustry?ForrealaddedvalueAtStäubliRenewableEnergy,wetakecaretodevelopourproductsandservicesnotjustfortoday,butforthefuture.Ourmanyyearsofexperienceinimplementingcomplexsolutionsaroundtheworldhelpusaddlong-termvalue.AsacompanywithSwissroots,youcanrelyonus.Stäubli–Connectionsforsustainablechangewww.staubli-renewable-energy.comSolarPowerEurope-LeadingtheEnergyTransitionRond-pointRobertSchuman3,1040Brussels,BelgiumT+3227095520/F+3227253250info@solarpowereurope.org/www.solarpowereurope.orgISBNNUMBER9789464444292

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