The cumulative installed solar PV capacity of the EU-27 Member States reached 269 GW at the end of 2023. It has multiplied over 2.500 times since the beginning of the millennium, when the grid-connected solar era began with Germany’s introduction of the feed-in tariff law. Since then, the European Union’s solar capacity surpassed 100 GW in 2018 and reached the 200 GW milestone in 2022. It exceeded 260 GW in 2023, and the growth trend is only expected to continue.
The EU cumulative PV capacity projections between 2024 and 2028 show double-digit growth rates year-on-year. In absolute terms, the EU is expected to add 401 GW new solar between 2024 and 2028, which will bring up the total installed PV capacity to 671 GW by the end of 2028, according to the Medium Scenario. This means more than doubling the EU solar power generation fleet within four years from the 269 GW in operation end of 2023. The High Scenario assumes much higher solar additions of 502 GW until 2027, resulting in a total solar capacity crossing the 700 GW mark, while the Low Scenario would mean a 105% growth from today to 550 GW in five years.
After exceptional years for the solar sector during the pandemic and energy crisis that triggered very high growth rates of 40% and beyond, the coming 4 years will likely see more moderate market development in the low 2-digit range, according to our Medium Scenario. While the market in 2023 still benefitted from the 2022 demand surge as the pipeline had grown to levels that installers could not handle, the situation will be very different in 2024. Already in the second half of 2023, when much of the previous year’s overhang was built, demand for rooftop solar was curbed in many countries, except where local subsidy programmes continued to fuel extraordinary solar market activities.
Assuming the latest solar-related policy framework are executed as intended, our Medium Scenario predicts a 5% market growth to 64 GW in 2024. The market is then expected to increase at a rate between 9-12% per year, reaching 97 GW in 2028.
Solar in the European Union has been traditionally dominated by rooftop applications, and the energy crisis has further pushed the market in that direction. All rooftop segments – residential, commercial and industrial (C&I) – experienced a very good year in 2023, growing together by 61% year-on-year, but the C&I segment was the one that improved the most. Its share of newly installed PV capacities grew to 35%, from 30% the year before, while the residential segment decrease slightly to 30%, down 1 percentage point from 31% the previous year. While many orders for these new systems have been placed during the height of the energy crisis in 2022, the lack of installers led to a large pipeline that could only be realised over the course of the first three quarters in 2023.
Unlike the thriving rooftop capacity, the utility-scale segment faces a 4-percentage-point market share decline in 2023 for many reasons. Delayed auctions in Portugal and France in 2022 and higher grid fees in Denmark have already left their marks. But the major issues have been profitability and project financing in an inflationary environment characterised by high interest rates and high material and labour cost. In addition, local permitting and grid connection issues were still making life difficult for solar developers in many regions despite the positive permitting initiative of the European Commission implemented already in the Emergency Measures during the energy crises. On top of that, wholesale power prices have fallen close to pre-energy-crises levels over the course of 2023, making it harder to compete for subsidy-free solar plants.
In 2019, the EU mandated its Member States to publish and implement 10 year National Energy and Climate Plans (NECPs). Running from 2021 to 2030, NECPs are meant to set out the Member State's targets, policies, and measures that will enable the country to reach the 2030 EU renewable targets. The NECPs are crucial for solar. They form the basis for energy policy at the national level and strengthen the business environment for solar investments in Europe – predictability, efficiency, and transparency.
EU Member States were mandated to update their draft NECPs by June 2023, and to submit their final NECP by 30 June 2024. As of July 2024, 26 out of 27 Member States have updated their draft plans (Austria has withdrawn its plan; however, Bulgaria, Malta and Latvia do not have a solar-specific target), and 6 countries have submitted their final NECP.
The 26 available draft NECPs from the 2023 update add a new 365 GW of EU solar ambition. The total target, for now, aims for 605 GW of solar by 2030. An extrapolation of the missing targets reaches 626 GW by 2030. While this increase in ambition is welcome, this still falls short of the EU Solar Strategy 750 GW target and of our Medium Scenario projection of 890 GW by 2030.
By weighted average, the 2023 targets increased by 87% compared to the 2019 NECPs. Lithuania and Ireland stand out by multiplying their respective targets by more than 5 and 10. Poland multiplied its target by 3 while Finland, Portugal, Slovenia, and Sweden more than doubled their previous targets, with Spain increasing its target by 95%.
We can see the level of ambition that Member States can take by looking at per capita targets. Germany will reach the highest score, with over 2,500 W per capita by the end of the decade, while Denmark, Lithuania and Portugal will approach or overshoot the value of 2,000 W per capita in 2030.
As solar PV deployment ramps up across the EU, it's not just about harnessing clean energy – it's also about powering job growth. The expansion of solar installations creates a ripple effect, spurring demand for skilled workers in manufacturing, installation, maintenance, and beyond. From engineers designing innovative systems to technicians ensuring smooth operation, the solar industry is a beacon for job seekers while simultaneously driving sustainable energy transitions.
We evaluated that almost 650,000 people were employed in the solar sector in the EU in 2022. The majority of jobs within the solar industry are linked to the deployment phase, amounting to 542,000 FTEs, which constitutes 84% of the total jobs. Operation and Maintenance activities generated accounted for 8.1% of total jobs, while Manufacturing activities represented 7.4% of the employment. Finally, Decommissioning & Recycling jobs remain a minor component, making up only 0.8% of the total jobs.
A notable upswing in the number of EU solar jobs is anticipated in the future. Given the significant reliance of solar job figures on yearly PV installations, the projected expansion of the EU solar market for is poised to yield positive implications for job creation. Based on our Medium Scenario, this trajectory of growth leads to 1 million jobs already by 2025 – an impressive 56% surge compared to 2022 levels. However, a heightened policy ambition could propel solar job figures beyond the 1.3 million FTE mark in 2025, as outlined in the High Scenario. This achievement would signify an extraordinary 107% growth from 2022. Looking at 2027, solar jobs could reach 1.2 million under our Medium Scenario (+86% from 2022), and up to 1.6 million following the high scenario (+153%).
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