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The State of Solar Power in Europe

This is a top-notch guest post by James Hawkins of the UK on the state of solar power in Europe today. It’s got the latest on the solar subsidy story in the UK, as well as many interesting facts and figures on solar in other European countries. Thank you, James!

by James Hawkins

Europe contains nine of the largest 15 solar markets in the world. In 2011, new European PV installations amounted to 20.9 GW, over 75% of the global total (27.7 GW). Germany has long held the crown within Europe as the clear leader in installed solar power capacity and now has a total of 24.7 GW of capacity installed, generating approximately 3% of its electricity.

Why has Germany been such a long way in front? The Renewable Energy Act introduced in 2000 was one of the first of its kind in the world. It introduced guaranteed feed-in tariffs, lasting for 20 years at a fixed price. The rates decrease gradually for new installations, exerting downward pressure on manufacturers to drive innovation. The stability of the scheme, and it’s popularity, has lead to great confidence in solar as an investment option; solar panels are a common sight on a German roof. For this reason, Germany has seen exponential growth in solar installations:

However, Germany is not alone in this rapid year-on-year growth. Italy is the world’s second largest installer, and is closing the gap on Germany. A study by GSE showed Italian installations tripling in capacity from 2009 to 2010 (from about 1 GW to over 3 GW) and then almost tripling again in 2011 after an additional 9 GW of solar were installed (the world-leading amount in 2011).

This surge is due to changes made to the solar power subsidies in Italy in 2010 – there was a feed-in tariff introduced, in addition to a generous grants system. Italy has some of the most favorable weather conditions in Europe for solar, and so it seems logical that it has the most beneficial grants structure.

Solar in the UK — a Roller Coaster Ride

Unfortunately, not every country can keep up with these prime examples; the UK solar industry has recently been in outrage. After introducing a feed-in tariff in April 2010, the number of installations rocketed. However, as installed panel prices fell by 30% from 2010 to 2011, due to a dramatic increase in competition that accompanied the increasing demand for residential solar, the popularity of the scheme was underestimated. Whilst the rate of adoption was impressive, the Department of Energy and Climate Change (DECC) panicked due to the cost of the scheme. The DECC subsequently tried to cut the feed-in tariff rates without holding a complete official consultation, which resulted in an extended court case from several large solar companies. The government’s decision to cut the rate by more than 50% was ruled as illegal. This led to the following:

The scheme was remarkably popular throughout the year, with the boom caused by the announcement that installations from the 3rd of December would receive a much lower rate – $0.33/kWh rather than $0.68c/kWh. Although the figures are not yet released, following the court decision to reinstate the tariff at the higher level, our (nation-wide) company’s data show installations are likely at a near all-time high. The tariff will fall in March, and so there will be another slump at that point. This instability is very bad for the industry – it puts off investors in solar power, and it has led to thousands of job losses.

Solar in Other Parts of Europe

Solar also hasn’t yet had much of an impact in Eastern Europe. Latvia, Estonia, and Lithuania each have under 0.1 MW of installed solar power capacity, and none of them have any government funding specifically for solar panels. Hopefully, the success of solar seen in other countries may be replicated. For example, Lithuania opened its first solar panel production site last year, primarily targeting surrounding countries.

Parts of Europe have struggled economically in 2011, of course, especially from the Greek financial crisis, but hopefully priorities will switch to longer term tasks soon, such as developing renewable energy from 2012.

Currently under construction in the Sahara, the Desertec project will be the world’s largest solar power farm (or collection of farms), and parts of it will be producing electricity for use in Europe by as soon as 2015. The aim is to meet between 15 and 20% of Europe’s energy demand by 2050, meaning German levels of solar power across every member state!

Whilst this will all provide a boost to Europe’s renewable energy use, it’s worth noting that other countries are working hard to close the gap – the USA is seeing record levels of solar installations, China is also engaged in a big solar power push, as are India and Japan. The consensus is that the German model is the most sustainable solution to replicate, and we’ll likely see feed-in tariff schemes adopted in most economically developed countries in the months and years to come, both within Europe and worldwide.

Written by James Hawkins, creator of a solar panels cost comparison service in the UK, where he also writes the solar blog.

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