Increasing profitability is one of main drivers of growth in many European countries
The global photovoltaics (PV) market is gathering speed with 2018 likely to see annual PV deployment pass the 100 gigawatt (GW) mark for the first time, according to the latest analysis from GTM Research. Europe in particular is witnessing a new PV boom.
In 2018, experts expect deployment to exceed 10 GW for the first time in years. Last year the European solar market already recorded annual growth of 28 per cent, based on deployment of 8.61 GW.
The European market is primarily driven by tenders and power purchase agreements, where PV scores points thanks to its low cost. The advantages of solar power self-consumption are also bolstering growth. Intersolar Europe will shine a light on new developments in the PV market and the changes that are energizing it, from June 20-22, 2018 in Munich. This year, the international industry event will be taking place alongside other energy exhibitions for the first time under the umbrella of The smarter E Europe.
The European solar market is poised for a renaissance. In 2018, growth of more than 30 percent is expected – in Germany and also, in particular, in the Netherlands, Spain and France. In Spain and the Netherlands, 2018 will see deployment exceed one gigawatt for the first time.
Larger PV plants with a capacity of just under 4 GW are also planned in Spain before the end of 2019. Behind these advances is the growing success of photovoltaics as an economical alternative to wind power in public tenders. Sunny days are also on the horizon for France, where solar power plants with a capacity of roughly 20 GW are to be set up by the year 2023. Alongside large PV power plants, the country also supports smaller installations and on-site consumption via public tenders.
Broad range of growth drivers energizing markets
The upturn in Europe has a number of contributing factors. Market developments are becoming less and less dependent on state incentive programs. They are benefiting instead from falling costs and technical advances. Furthermore, new business and marketing models such as power purchase agreements, tenant power and sector coupling are generating new areas of business.
The brighter prospects for growth are also due to an increasing commitment to solar power on the part of utilities such as EDF, Enel, E.ON, innogy, Statoil and Vattenfall. And political incentives too are becoming increasingly common across Europe with the use of public tenders, net metering and decentralized “citizen power” generation. In France, for example, the annual capacity of PV tenders is set to rise to 2.45 GW starting in 2018.
In Italy, as in other countries, increasing profitability is one of the main drivers of growth. Direct purchase agreements or self-consumption, as well as a repowering market, are providing crucial momentum here. These make it possible to expand the capacity of older installations up to 20 kWp without causing the operator to lose their feed-in tariff. Spain’s PV market is forecast to grow 35-fold this year, from 40 MW in 2017 to 1.4 GW in 2018.
Here too, public tenders account for a significant proportion of PV projects. Another factor is the ambition to meet the European Commission’s expansion goals for renewable energies. These require 20 percent of total energy consumption to come from renewable sources by 2020, and 30 percent by 2030.
In the Netherlands, the net metering remuneration model for private domestic PV installations and small commercial installations is convincing individuals and businesses alike. Germany is back on a winning track thanks to falling costs, public tenders and growing self-consumption, among other factors.
Another boon for the market for self-consumption solutions is the approaching begin of retrofit projects as the first installations reach the end of the 20-year remuneration period fixed by the country’s Renewable Energy Sources Act (EEG), from Jan. 1, 2021. Following this, a range of new self-consumption concepts should act as a further stimulus for the market.