Solar build-out growth in Europe to slow next year, association says

Construction of solar power plants has accelerated considerably in Europe in recent years, largely due to the sharp rise in energy commodity prices. However, as prices stabilise and interest rates remain high, growth in the sector is beginning to slow. According to forecasts by the industry association SolarPower Europe, annual additions to installed capacity will continue to grow, but at a slower pace than before.

The association expects annual additions to installed solar capacity in Europe to increase by 11% next year. By comparison, annual growth exceeded 40% in each of the previous three years. SolarPower Europe estimates that installed solar capacity in Europe will therefore increase by 62 GW next year. For this year, the association expects additions of around 56 GW.

According to the association, total installed capacity across Europe currently stands at 263 GW. Germany remains in the lead, with a total of 82 GW. It is followed by Spain with 36 GW and Italy with 29.5 GW.

"The period of extremely rapid growth over the past three years was exceptional and was driven by an extreme rise in energy prices and concerns about energy supply disruptions," the association said, adding that, with prices now stabilising, pressure to build is easing amid inflation and high interest rates.

According to the association, the slower growth expected in the coming years compared with previous years is due, among other things, to a decline in household demand, which surged in the previous two years as a result of the energy crisis.

Lengthy permitting processes and high interest rates

"Solar power is delivering a record number of installations in Europe amid the crisis. Now that the solar sector is reaching a turning point, Europe must support it. It is clear that policymakers cannot afford to be complacent for the rest of the decade," said Walburga Hemetsberger, CEO of SolarPower Europe.

According to Dries Acke, SolarPower Europe's policy director, now that solar energy development is fortunately no longer being driven by high energy prices, it is once again up to politicians to ensure favourable investment conditions for solar power.

"We cannot accept grid connection times of more than four years, we cannot allow slow local progress on permitting, we cannot risk trade barriers slowing construction, and we cannot miss the opportunity to bring solar manufacturing back to Europe," Acke said.