European Solar Power Market Trends We Can Learn From

The Solar Power industry is rapidly on the rise, especially after uncertain oil pricing and the realization of the warming planet. An analysis of the market trends of this sector, especially in Europe can help bring forward interesting insights for the rest of the world to learn from.

After a dip in 2016, the European solar power market recovered remarkably in 2017 and added 8.6 GW of solar capacity. This growth was largely driven by technological progress, cost reductions and the development of novel business models such as on-site direct wire mini power purchase agreements (PPAs).

This business model is increasingly getting among large-scale solar project developers to overcome regulatory barriers. Simultaneously, fully automated energy management across all sectors and segments on a local level and peer-to-peer models will facilitate new methods of financing. The implementation of such business models is now enabling PV system installers to offer Solar Energy-as-a-Service.

A recent analysis by Frost & Sullivan titled, European Solar Power Market, Forecast to 2025, includes in-depth analysis of the solar power market with specific focus on the markets of Austria, Belgium, Germany, Italy, United Kingdom, France, Spain, Turkey, Netherlands, Nordic countries and the rest of Europe. It analyses trends in the residential, commercial and industrial (C&I), and utility end-user segments.

“Solar power generation is heavily reliant on government support,” said Irmak Giray, Research Analyst, Energy & Environment. “Reductions in subsidies and feed-in tariffs (FiTs), tax benefits, rebate programmes and fund allocations will have a huge effect on the market. For instance, new capacity in the UK solar market showed a year-on-year decline of 53.8 percent in 2017, as the country had scaled back solar subsidy programmes. On the other hand, the markets in France and the Netherlands added capacity due to favourable support mechanisms.”

“Regulations will cease to be an influential factor once prices start falling,” noted Giray. “Economies of scale and increasing automation of production will accelerate price reductions in solar modules and installation, which will encourage prospective consumers. Furthermore, long-term contracts such as solar power leasing programmes and PPA will allow investors to reduce cost and risk by using clean energy.”

Trends reveal that participants in the highly fragmented solar market are expected to start consolidating from 2018 to remain price competitive as well as foster collaborations among various stakeholders, including module manufacturers, energy companies, end users, and government organisations. There will be additional growth opportunities in:

  • Applying digitisation and advanced digital technologies to solar systems.
  • Expanding offerings to include residential C&I storage.
  • Integrating energy storage solutions with PV systems as it offers fresh investment opportunities for project developers, utilities, software solution providers, and system integrators.
  • Acquiring or partnering with established developers as well as smaller companies that have a targeted development country or a technology that can improve the operational performance of existing or future solar assets.
  • Employing a multi-channel approach to effectively target the market.

Solar should have been the energy source of the present, and is certainly the energy solution of the future. The Government of India has already called for a One World One Sun One Grid approach toward harnessing solar energy. The sooner Governments and Companies around the world realize and accept this, stronger are the chances of human survival on this planet. Image by kathy via Flickr.

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This article has been written by a member of the Delhi Greens Blog's dedicated team of writers and researchers from across Delhi NCR, India and the world.

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