European solar market 2024-2025: balancing growth, challenges and opportunities
The PV market in the European Union (EU) has experienced remarkable growth, driven by the urgent need to transition to renewable energy and enhance energy security. Solar energy has emerged as a cornerstone of EU’s strategy to achieve its climate goals and reduce dependence on fossil fuel imports. These efforts have been supported by policy measures, including financial incentives and revised renewable energy targets from EU member states, making solar PV deployment a key priority across the continent.
In 2024, the EU set a new growth benchmark for PV installations, fueled by rising energy demand and increased investments in renewable infrastructure. Ambitious climate targets and supportive frameworks, such as national energy plans and EU-led incentives, have accelerated adoption. However, this growth has also introduced challenges, including evolving trade dynamics, and pricing pressures, which will shape the market through 2025.
As the EU solar market evolves, trends in module shipments, inventory levels, and pricing are expected to influence its trajectory significantly. These factors underscore the delicate balance between fostering market expansion and addressing operational challenges, making 2024-2025 a critical period for the sector’s development.
Trends in EU PV Installations (2024-2025)
The EU PV market demonstrated steady yet modest growth in 2024, with an estimated 64 to 65 GWdc of new PV capacity installed – a slight increase of ~5% compared to the 61.9 GWdc installed in 2023, according to EUPD Research calculations. This subdued growth followed the significant surge in 2023, where installations rose by 50% year-on-year due to the energy crisis sparked by the Russia-Ukraine conflict.
In 2024, declining energy prices and a return to relative stability in energy markets reduced the urgency that had previously driven rapid expansion. While policy-driven initiatives and supportive frameworks remained in place, they were insufficient to replicate the extraordinary growth seen in the previous year. Among the major markets, France, Germany, and Italy achieved continued expansion of PV capacity, whereas the Netherlands, Spain, and Poland experienced contractions compared to their 2023 installation figures.
Despite its resilience, the 2024 PV market faced several bottlenecks that constrained growth. Key challenges included grid capacity limitations, permitting delays, and fluctuating consumer demand driven by declining energy prices and high inflation. Disruptions in the procurement of PV components further impacted the rooftop solar segment, restricting growth and complicating inventory management for installers. According to EUPD Research's PV InstallerMonitor© 2023/2024, 22% of surveyed German installers reported significant shipment delays. To mitigate these challenges, installers across Europe allocated a larger share of PV modules for stock purposes, with an average of 23% purchased for inventory. This approach, while addressing supply chain uncertainties, also exposed companies to risks like inventory devaluation, with potential financial implications.
Looking ahead to 2025, EUPD Research forecasts a return to double digit growth, with PV installations expected to rise by approximately 10% compared to 2024. Policy adjustments, investments in grid infrastructure, and streamlined permitting processes are anticipated to address existing challenges and create a more stable trajectory for the EU PV market.
PV Module Shipments from China to the EU
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