Europe’s solar growth is ‘flatlining’

Europe needs a new trade policy that supports the growth of solar, says SolarPower Europe.
Published: Tue 30 May 2017

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Global solar installation figures are down this year compared to last year’s figures but should still exceed 80GW this year, according to SolarPower Europe CEO James Watson at the Intersolar Europe conference in Munich, Germany.

SolarPower Europe is a member-led association that represents organisations throughout the whole value chain. Its aim is to shape the regulatory environment and enhance business opportunities for solar power in Europe. 

Global growth of over 50% pushed 2016’s annual installation total to 76.6GW, with this year on course to surpass that record figure, he said.

He added: “Despite the gigantic leap that resulted in the more than 50% growth year-on-year of annual solar installations in 2016, there is a good chance that the market could even pass the 80GW mark in 2017.”

Cost effectiveness of solar power

According to SolarPower president Christian Westermeier, it is the first time that solar has surpassed wind in terms of annual installations. This can be attributed to the versatility and cost effectiveness of solar power, he said.

In fact, the decrease in solar costs is making the technology increasingly more competitive than fossil fuels and nuclear energy. To highlight this point Solar Europe said that that all solar tenders awarded since 2016 are lower than the price guarantee struck by the UK for its Hinkley Point C nuclear plant.

Average solar prices dropped by 24% between 2015-2016, and by February 2017 that decline had grown to 28%, so there has been a continual decrease in costs for solar.

A record-low price of just US 2.4c/kWh struck in Abu Dhabi in 2016 has prompted the Brussels-based solar body to produce a more “optimistic” report than in previous years, SolarPower Europe executive advisor Michael Schmela said.

He added: “If policy makers get things right by addressing the needs for a smooth energy transition, such as through establishing the right trade policy, electricity market design and renewable energy frameworks, solar demand could increase much faster, and touch nearly 1TW of total generation capacity in 2021.”

Europe’s solar is flatlining

Europe’s solar sector is in danger of lagging behind other regions, said Watson. Since 2011, the region has been losing its position as a leader in solar development.   

At the end of 2016, Europe had developed 104,297GW of cumulative capacity, but the region finds itself in second place to the Asia Pacific region. Watson describes Europe’s solar development as one that is in a “flatlining position”.

Europe added just 6.7GW in 2016 – a 21% decrease on 2015. However, despite the expected decline of the UK market in 2017, there is hope that markets such as Turkey and the Netherlands can make up for this shortfall and even push cumulative installations in 2017 to 8GW in Europe.

Solar currently meets only 4% of Europe’s electricity demand. Wind is at 12-13%, gas and coal are both higher at 15%, and nuclear is at 27-28%. New power generation capacity going into the grid is low across all sectors in Europe because the continent has an oversupply currently.

According to Watson, Europe needs to shut down coal and nuclear plants faster to create space for solar growth.

European policymakers and solar growth support

A theoretical levelised cost of energy (LCOE) for solar in southern parts of Europe could be close to US 3c/kWh, according to SolarPower Europe calculations, but to reach these competitive prices European policymakers have to become more positive and proactive, says Watson.

“We need a trade policy that supports the growth of solar in Europe. Nobody is really happy with current policy, it cannot be good for the continued decrease in the LCOE we need in order to have competition with other technologies.

“Measures such as trade barriers need to be removed. The European Commission (EC) proposal of 27% of renewable energy by 2030 is nothing more than business as usual. We need target of 35%, this is the only thing that is viable in our opinion. We also need a proper framework that puts prosumers at the heart of the energy system; the right to self-generate and self-consume needs to be embraced by all governments in Europe.”