Government support and consolidations will prove pivotal in the highly fragmented EU solar power market, finds Frost & Sullivan.
After a dip in 2016, the European solar power market recovered remarkably in 2017 to add 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 particularly popular among large-scale solar project developers to overcome regulatory barriers, while 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 will enable PV system installers to offer Solar Energy-as-a-Service.
“Solar power generation is heavily reliant on government support,” says 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% 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.”
Frost & Sullivan’s recent analysis, 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, the United Kingdom, France, Spain, Turkey, the Netherlands, the Nordic countries, and the Rest of Europe. It analyses trends in the residential, commercial and industrial (C&I), and utility end-user segments.
“Regulations will cease to be an influential factor once prices start falling,” notes Giray. “Economies of scale and increasing automation of production will accelerate price reductions in solar modules and installation, which will encourage prosumers. Furthermore, long-term contracts such as solar power leasing programmes and PPA will allow investors to reduce cost and risk by using clean energy.”