What does it mean to have a secure, home-grown energy system? It cannot be manipulated for geopolitical purposes. That system needs to be based on renewables, and it must be able to be deployed fast. The European Union (EU) has been wrestling with these and other energy-based variables, particularly now that the war in Ukraine has been ongoing for nearly a year. One bright spot has been solar production, and the EU has set out some very ambitious plans to embrace increased solar production, including a clear policy line on how to get there.
Solar production has already made a real difference in the current EU energy crisis. Driven significantly by dramatically reduced fossil fuel imports following Russia’s invasion of Ukraine, solar production soared nearly 50% in the European Union this year. The 27 EU nations added 41.4 gigawatts (GW) of new solar photovoltaic (PV) capacity to their grids, a 47% increase over 2021.
That’s enough to power the equivalent of around 12.4 million homes.
The EU has increased the proposed renewable energy target for 2030 to 45% — no small effort. It means more than doubling the share of renewables in the next 8 years and tripling of the deployment speed seen over the last decade. To translate these goals into reality — and in response to hardships and the global energy market disruption — the European Commission announced the REPowerEU Plan.
It is a roadmap for:
- saving energy
- producing clean energy
- diversifying energy supplies
The REPowerEU Plan is backed by financial and legal measures to build the new energy infrastructure and system that Europe needs. Renewables are the cheapest and cleanest energy available and can be produced domestically within the EU, reducing its need for energy imports. REPowerEU will speed up the green transition and spur massive investment in renewable energy. It is clear that the EU also needs to enable industry and transport to substitute fossil fuels faster to bring down emissions and dependencies.
An important element of this transition is the Solar Strategy. The intention is to bring online over 320 GW of solar photovoltaic by 2025 and almost 600 GW by 2030.
- Part of this is making rooftop solar panels mandatory.
- The Commission has also brought forward actions to speed up and simplify permitting procedures that are currently slowing down the industry. A proposed Emergency Regulation should produce faster permitting for renewable projects, including specific provisions for solar deployment.
- Early next year a proposal to reform the electricity market will be raised.
These actions will be supported by the newly launched EU Solar PV Industry Alliance as a way to seize industrial opportunities. The Alliance will help to expand manufacturing capacities for more innovative, more efficient, and more sustainable solar PVs.
EU Market Outlook for Solar Power 2022-2026
These and other insights have been provided in a new report generated by SolarPower Europe. Its introduction noted that “2022 was the year when solar power displayed its true potential for the very first time in the EU, driven by record high energy prices and geopolitical tensions that largely improved its business case.”
The authors of the “European Market Outlook 2022 – 2026” are adamant that solar is essential for the EU’s energy independence. They say that the solar wave in the coming years “will be nothing short of seismic.” To get Europe ready for solar, 5 key areas have been highlighted.
- Dramatically expand the pool of solar installers. This year, many more Europeans could have already become independent from gas imports if there had been more qualified technicians to install and grid-connect their solar systems. Fixing the installation bottleneck is the top priority.
- Maintain regulatory stability. While Europeans want solar and investors are ready, the wrong signals from state market interventions can significantly slow down today’s gigantic solar momentum.
- Don’t forget the grid. Solar stakeholders are increasingly reporting grid connection issues, both on the transmission and distribution levels. The EU needs to take this challenge seriously and also enable flexibility through setting appropriate 2030 targets for energy storage.
- Streamline administrative procedures. Permitting is not just an issue for wind. Solar faces administrative challenges. too – this cannot be taken lightly. To absorb the necessary solar power plants to come, the EU needs improved spatial planning and permitting procedures, which have to be designed in harmony with people and nature.
- Reinforce access to green and reliable manufacturing. Europe needs to be able to source solar products sustainably and from reliable supply chains. The EU cannot exchange one dependency for another. A powerful domestic solar industry, at the center of a diversified, global solar supply chain, is critical.
Solar Production Scenarios
“Solar is offering a lifeline amid energy and climate crises,” SolarPower Europe CEO Walburga Hemetsberger said in a statement. “No other energy source is growing as quickly or reliably as solar. We’re building a secure, green, prosperous Europe on a foundation of solar.”
What do solar production scenarios look like for the EU now and moving forward?
- 2022 will be the first time that the 50 GW threshold is reached.
- It will also be the year when two countries, Germany and Spain, are expected to exceed 10 GW annual installations for the first time.
- In 2024, a Medium Scenario anticipates a 16% growth rate to 62.3 GW, followed by 74.1 GW in 2025 and 85.2 GW in 2026, more than doubling the current market size.
- New additions will bring total solar capacity to 262 GW in 2023 and 484 GW in 2026, more than doubling today’s operating fleet. This pathway is also more or less aligned with the REPowerEU interim target of 400 GW (320 GWAC) by 2025.
- In the period 2027-2030, additional growth should take place thanks to improved policy conditions and further technology cost reductions.
- The total solar fleet in the EU is projected to reach 920 GW under a Medium Scenario and 1,184 GW under a High Scenario.
- Both scenarios largely surpass the 750 GW solar by 2030 target set in the EU Commission’s REPowerEU strategy, by 24% and 58% respectively.
The political context for reshoring solar manufacturing to Europe changed dramatically in 2022, according to “European Market Outlook 2022 – 2026.” There is now a strong political awareness around the need for clean tech industrial strategies, the authors argue, so that, subsequently, more open discussions are taking place on Europe’s competition rules and State Aid policy.
The US Inflation Reduction Act (IRA), which was signed into law in August, has been the catalyst for this changed approach. The US IRA is the latest – “and probably most impactful” – in a series of assertive industrial strategies on solar manufacturing proliferating around the world, following developments in India, Turkey, and China.
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