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The Europe solar panel market is estimated to value at US$62.8 Bn by the end of 2031 from US$35.2 Bn recorded in 2023. The market is expected to secure a CAGR of 7.5% in the forthcoming years from 2024 to 2031.
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Attributes |
Key Insights |
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Europe Solar Panel Market Size (2023) |
US$35.2 Bn |
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Projected Market Value (2031F) |
US$62.8 Bn |
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Historical CAGR (2018-2023) |
7.1% |
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Forecast CAGR (2024-2031) |
7.5% |
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The European solar power market has been amongst the topmost, globally. While the Europeans’ love for solar energy reaches new heights, the continent's solar panel market is also experiencing a meteoric rise.
SolarPower Europe says the EU solar market shattered expectations in 2022, with a record-breaking new capacity installed, of around 41.4 GW, in addition to a monumental 47% rise compared to that in 2021.
Going forward, the Europe solar PV market awaits a bright future in the upcoming years, strongly backed by the European Commission’s estimations that the region’s solar capacity soared to a staggering 259.99 GW by the end of 2023. This is certainly a significant leap that translates to a remarkable 9.1% of the EU's total electricity generation through solar power. The European Union clearly highlights the growing muscle of solar industry in the region, precisely the Europe solar panel market.
As far as the COVID-19 impact is concerned, the pandemic-driven slump in the industry has become a thing of the past. Skyrocketing energy prices, and persistent geopolitical tensions, continue to push solar to emerge as a compelling solution, propelling record installations in the region. Today, the European Green Deal, and REPowerEU Plan refer to solar as the cornerstone for energy independence, and a highly sustainable future.
The pacing transition from nonrenewable energy to renewable energy, and the rising concerns over carbon gas emissions caused by power generation are some of the key drivers accounting for a surge in demand for solar panels in Europe. Households, and commercial entities are increasingly embracing energy independence, and cost savings through rooftop solar panel installations.
The surge in demand presents vast opportunities for a multitude of players in this industry, including solar panel manufacturers, installers, service providers, and innovators, creating a solid solar ecosystem. Advancements in battery storage technology also tend to aid in better management of solar energy production and use, ensuring a more reliable power source. These will remain among the key growth driving factors for Europe solar panel market.
More interestingly, integration of solar panels into agricultural landscapes is gaining traction of late, offering benefits for both sectors by optimizing land use. This will be another key factor providing strong tailwinds to market growth in the region.
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European governments are playing a crucial role in accelerating solar adoption through a range of supportive policies. Feed-in tariff makes solar panels a more attractive investment for homeowners, as well as businesses.
On the other hand, tax credit, rebate, and solar panel subsidy serve to directly reduce the upfront cost of installing solar panels, making them more accessible to a wider range of consumers.
Many European countries have established ambitious targets for renewable energy generation, with solar playing a leading role. These mandates create a guaranteed market for solar energy, incentivizing investment, and development in the sector.
European Governments are working to simplify and expedite the permitting process for solar installations, reducing bureaucratic hurdles, and accelerating project timelines.
Technological Advancements Targeting Efficiency, and Affordability
Modern solar panels convert a higher percentage of sunlight into electricity, maximizing energy production, and ROI. Technological innovations, and economies of scale have significantly driven down the cost of solar panels, making them a more feasible option for a broader segment of the population.
Furthermore, ongoing R&D efforts also target improved efficiency, reduced costs, and development of new solar panel technologies that would boast greater capabilities, fueling the Europe solar panel market.
Energy Security, and Rising Fossil Fuel Prices
Europe's dependence on imported fossil fuels has become a major concern, particularly in the wake of recent geopolitical tensions. Solar power offers a path to energy independence, reducing reliance on volatile and expensive fossil fuels. Additionally, the surge in energy prices has made solar power a more attractive proposition for consumers seeking to hedge against rising electricity costs.
Increasing Environmental Consciousness
Public awareness of climate change, and the urgency of transitioning towards clean energy sources is at an all-time high. Solar power offers a sustainable and environmentally friendly alternative to fossil fuels, helping to reduce greenhouse gas emissions, and combat climate change. This growing environmental consciousness is driving consumer demand for solar panels and encouraging businesses to adopt sustainable practices.
Advances in Battery Storage Technology
The development of efficient, and affordable battery storage solutions is another key driver for the market. These advancements allow for the storage of excess solar energy generated during peak sunlight hours, enabling its use later in the day or during periods of low sunlight. This tackles the intermittency-related issue associated with solar power, and allows for a more reliable, and consistent energy supply.
Although the driving factors pave the way for a flourishing solar panel market in Europe, there exist a couple of challenges limiting the pace of expansion of the solar panel market size in Europe.
Intermittency in Grid Infrastructure
The rapid growth of solar energy presents a challenge for the existing electricity grid infrastructure. Traditional grids were not designed to handle the influx of decentralized power generation from millions of rooftop solar panels.
Solar power generation fluctuates with sunlight availability, unlike traditional power plants that can operate continuously. The resultant intermittency can cause strain on the grid, requiring adjustments to maintain a stable balance between supply, and demand.
The current grid infrastructure may not have the capacity to efficiently transmit the large amounts of solar energy generated in certain regions to areas with high demand. This can lead to bottlenecks, and energy losses, impeding the pace of the Europe solar panel market.
Integrating large-scale solar farms with the existing grid requires significant investment in upgrading transmission lines and smart grid technologies. These technologies can manage the flow of energy more efficiently and ensure grid stability.
The upgrading, and modernization of the electricity grid infrastructure is therefore crucial to accommodate the significant increase in solar energy generation. Governments, and grid operators will thus focus on investments in smart grid technologies, and grid expansion projects to ensure a smooth transition to a solar-powered future.
Concerns Around End-of-Life Management of Panels
While solar energy is indubitably a clean and sustainable solution, concerns exist around the environmental impact of solar panel manufacturing, and disposal. As far as the manufacturing footprint is concerned, the process of solar panel production typically involves the use of hazardous materials, and several energy-intensive processes. This raises concerns about the environmental impact of the manufacturing stage.
Another severe concern is the end-of-life management of solar panels. The panels typically have a limited lifespan, and their disposal demands careful consideration. Improper disposal can lead to serious environmental hazards if any of the toxic materials are not handled responsibly.
However, both the concern areas are likely to witness favorable developments soon. Solar panel manufacturers are increasingly adopting environmentally friendly production methods and utilizing recycled materials in solar panels. Additionally, a lot of R&D is exclusively focused on the development of efficient and cost-effective technologies for solar panel recycling at the end of their lifespan.
Ensuring a closed-loop lifecycle for the solar panel industry has become a central issue of the solar ecosystem as minimization of the environmental footprint continues to capture the spotlight. The EU solar panel recycling places greater emphasis on the same.
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The Rise of Self-Consumption, and Distributed Generation
Traditionally, solar power generation was dominated by large-scale solar farms feeding electricity into the central grid. However, a significant shift is happening towards distributed generation, where individual homes and businesses are installing rooftop solar panels to generate their own electricity.
This trend in the Europe solar panel market is clearly driven by the falling costs of solar panel technology, which makes investments in rooftop solar a viable option for a wider range of consumers.
On the other hand, with rising energy costs, and prevalent concerns about energy security, consumers are seeking ways to regulate their energy bills, and reduce reliance on the grid. Solar panels offer a path to energy independence, allowing both homeowners and businesses to generate their own clean electricity.
Growth in Rooftop Installations
The demand for rooftop solar panels in Europe is expected to surge, creating new opportunities for installers and manufacturers of smaller-scale solar systems. Surging demand for smart grid infrastructure is another supporting trend.
The integration of millions of distributed solar generators requires a smarter grid infrastructure that can manage the fluctuations in energy production and optimize overall grid efficiency.
Another strong trend shaping consumer behavior is the increased focus on building integration, and aesthetics. As rooftop solar becomes more commonplace, there will be an increased focus on developing aesthetically pleasing solar panels that seamlessly integrate with building designs. This marks an important trend in Europe solar panel market.
Rising Traction for Agrivoltaics
A novel trend gaining traction is agrivoltaics, the practice of integrating solar panels within agricultural landscapes. By strategically placing solar panels above crops or livestock, farmers can utilize the same land for both solar energy generation and agricultural production, achieving improved land use efficiency.
While agrivoltaics will also be beneficial for both crops, and livestock, it also opens an opportunity to generate additional income by leasing their land for installing agrivoltaic systems. Ample opportunities are identified in this area, for farmers, landowners, R&D companies, solar developers.
Growth in Solar Panels Unlocks Employment Opportunities
While the European Green Deal, and REPowerEU Plan represent a collective bold commitment to a sustainable future of Europe, these initiatives also eye reduced reliance on fossil fuels. Greater emphasis on green and clean energy is further to have ignited a firestorm of activity in this market.
As millions of homes, and businesses are being equipped with solar panels, it must also be considered that this solar revolution is not just about generating clean power but more about creating significant employment.
The sector has recently become a powerhouse of employment and the EU suggests the scenario to have a substantial ripple effect on the European economy. A wealth of opportunities lies at every step, from manufacturing solar panels to installations and maintenance.
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Europe Solar Panel Market Share by Country |
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Germany |
27.6% |
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UK |
17.9% |
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France |
xx% |
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Italy |
xx% |
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Spain |
xx% |
Germany Leads Europe’s Solar Charge
Germany, the undisputed champion, leads the pack with an impressive 7.9 GW of new capacity that was added in the year 2022. Spain, Poland, the Netherlands, and France trail Germany closely, which the SolarPower Europe calls a formidable European solar league.
The continuously improving efficiency, and affordability of solar panels are increasingly position them as attractive option. Moreover, a supportive policy structure, and favorable feed-in tariffs further act as potent growth accelerators for the solar panel industry in Europe.
However, experts have been constantly pointing out the fact that upgrading of the electricity grids will be one of the crucial parts of this entire process, to seamlessly accommodate the noteworthy rise in solar panel production over the years to come.
The UK Shines Bright in Residential Sector
The UK’s government declared reduced tax on solar PV panels, and other renewable power generation products (post-January, 2022) for promoting adoption of solar panels, especially across the residential sector.
As the government of the UK has set a net-zero electricity grid target by 2035, it has plans to stop the use of fossil fuels for energy generation. The country has thus been issuing a favorable policy framework eying this target.
The UK, currently with the highest installed base of solar panel for homes, continues to witness greater adoption of solar PV panels for residential applications.
The favorable government policies are expected to promote the growth of the solar panel market in the country. The homeowners here can easily sell their surplus electricity to various power companies in the surrounding areas.
Overdependence on China for Europe’s Solar Panel Imports
Europe's solar revolution is on the rise but remains heavily intertwined with China, currently dominating supply chains in the global solar panel industry. The International Energy Agency (IEA) reports China’s massive share of around 90% in solar panel manufacturing across the entire supply chain. In a nutshell, Europe remains largely influenced by China at each step, from polysilicon to finished modules.
Governments in the region are thus likely to adopt smarter industrial policy structure to diversify their solar panel supply chains, which also means fostered domestic manufacturing, as well as partnerships with other potential equivalent suppliers.
Concerns also hover over Europe's potential oversupply of Chinese solar panels, further leading to pricing pressures. China plays a dual role, as a potential challenger as well as an enabler, for Europe's solar industry.
While on one side, China's dominant position allows an access to affordable solar panels, it also raises concerns about over-reliance of Europe, and long-term market stability on the other side.
Although Europe continues to leverage China’s prowess in manufacturing and supply, European governments seeking diversified supply chains cannot be understated. Persistence Market Research thus refers to Europe's dependence on China's solar powerhouse as a double-edged sword.
Recent Developments
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Attribute |
Details |
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Forecast Period |
2024 to 2031 |
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Historical Data Available for |
2018 to 2023 |
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Market Analysis |
US$ Million for Value |
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Key Countries Covered |
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Key Market Segments Covered |
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Key Companies Profiled |
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Report Coverage |
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Customization & Pricing |
Available upon request |
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The Europe solar panel market size is more than US$35 billion as of 2023-end.
European governments offer incentives such as feed-in tariffs, tax credits, and subsidies to promote solar energy. Additionally, many countries have net metering policies, allowing excess energy to be sold back to the grid.
Innovation drives the growth of Europe's solar panel market, with ongoing research improving efficiency, durability, and affordability. Investments in next-gen technologies like perovskite cells and solar tracking systems enhance performance.
The key challenges include grid integration, permitting processes, and intermittency issues. End-of-life management of panels is a vast challenge in the long term.
Some of the leading players in this market include JA Solar Holdings, Trina Solar, SMA Solar Technology, JinkoSolar, and SunPower Corporation.
