Europe Solar Energy Systems Market By Product Type (Solar Panels (Monocrystalline, Polycrystalline, Thin Film), Solar Inverters (Central, String, Micro), Solar Batteries (Lithium Ion, Lead Acid, Flow Battery)), By Service (New Installation, Maintenance & Repair), By End-Use (Commercial, Residential, Industrial, Agriculture), By Country, Competition Forecast & Opportunities, 2028

The Europe Solar Energy Systems Market is anticipated to grow at a steady pace in the forecast period, 2024-2028, and is expected to grow at a very healthy CAGR in the upcoming years. This growth is attributed to the rising demand for sustainable energy production to overcome conventional sources of energy, as well as the declining cost of solar energy systems, among other factors.

Solar energy systems are a range of equipment designed to harness energy from the sun and convert it into usable forms, such as electricity or heat. These systems utilize abundant and renewable solar resources to provide clean and sustainable energy for various applications. Solar Energy Systems typically consist of solar photovoltaic (PV) panels and concentrated solar power (CSP) systems.

In 2022, the European Commission planned to increase the roll-out of renewables to counter a spike in energy prices and drastically reduce the EU’s dependence on Russian supplies of fossil fuels. The REPowerEU plan aims to achieve EU independence from Russian fossil fuels by the end of 2030 and reduce Russian natural gas imports by nearly two-thirds before the end of 2022. Russia accounted for almost half of the EU’s gas imports in 2021 and is the largest supplier of the bloc’s crude oil and coal imports, according to the Commission.

Declining the Cost of Solar Energy Systems

The reduction in the price of solar energy systems is likely to propel the solar energy market in the upcoming years. The prices of solar energy systems, including solar inverters, solar batteries, and solar panels, have declined compared to conventional energy sources such as crude oil and coal. This has directly enhanced the solar energy market across Europe. Solar energy costs have fallen by around 82% since 2010, according to figures released by the International Renewable Energy Agency. The levelized cost of energy generated by large-scale solar plants was around USD 0.068/kWh, compared to USD 0.378 ten years ago, and the price fell 13.1% between 2018 and last year alone. The cost of energy has dropped by 82% for photovoltaic solar and 47% for concentrated solar energy (CSP) since 2010. These figures were compiled from the costs and tariffs reported for 17,000 renewable energy project tenders last year, which are expected to add up to 1.7 GW of clean power generation capacity. The cost reductions witnessed in the last decade can be attributed to improved technology, economies of scale, supply chain competitiveness, and the growing experience of developers. As a result, the demand for solar energy is rising while the consumption of coal and fossil fuels is declining. Therefore, the solar energy systems market is expected to experience a boost in the forecast period.

Rising Demand For the Sustainable Energy

The rising need for sustainable and clean energy, for the better health of populations and the Earth, is increasing rapidly. Solar energy systems play a vital role in providing clean and sustainable energy across the world. Clean energy has many applications and, as it is the fuel for the future, its usability and requirement are only going to increase over time. Clean energy is used in various applications such as solar energy, hydropower, wind power, among others.

Additionally, various investments in solar energy have been made. For example, Stefan-Joerg Goebel, a German company, plans to develop and build between 300 and 500 megawatts (MW) of wind and solar power capacity annually in Germany starting from 2027, with an investment totaling USD 1.1 billion. They also aim to operate a total of 2,000 MW of German wind and solar capacity, in addition to an existing 1,800 MW power plant portfolio that includes gas-fired plants, by the end of 2030.

Furthermore, in May 2022, BP p.l.c invested around USD 19 billion in the UK's energy system, with a goal to help the country deliver on its bold ambitions to boost energy security and reach net zero by the end of 2030.

In addition, last year Germany was one of Europe's biggest solar markets in 2022, with 7.9 GW of newly installed capacity, followed by Spain (7.5 GW), Poland (4.9 GW), the Netherlands (4.0 GW), and France (2.7 GW). While the top 5 EU markets remained the same, Portugal and Sweden have entered the top 10, at the expense of Hungary and Austria.

Thus, the aforementioned factors are likely to enhance the market for solar energy systems in Europe in the upcoming years.

European Union solar energy strategy

The European Union (EU) implemented a comprehensive Solar Energy Strategy under the REPowerEU program in May 2022. This strategy aimed to address existing barriers and challenges in the renewable energy sector and launched initiatives to accelerate the deployment of solar energy. By 2025, the EU aims to have over 320 GW of installed solar PV capacity, increasing to nearly 600 GW by 2030. To promote renewable projects, the Commission launched a range of initiatives that were incorporated into the policy agreement for revising the Renewable Energy Directive. These new legal provisions will facilitate the accelerated implementation of solar energy across the EU.

As part of the strategy, the EU launched three key initiatives. The European Solar Rooftops Initiative seeks to maximize the potential of rooftops for clean energy generation. Consideration is being given to making the installation of solar energy mandatory in all types of buildings, starting with government and business establishments and eventually extending to private dwellings. The EU large-scale skills partnership aims to address the shortage of qualified workers in the renewables sector and foster the development of a skilled workforce. By creating new jobs in the clean energy sector, this initiative contributes to the overall transition to clean energy. Additionally, the EU Solar PV Industry Alliance was established in collaboration with industry actors, research institutes, associations, and other stakeholders to support the objectives of the EU's Solar Energy Strategy. This alliance aims to enhance investment opportunities for European solar PVs, diversify supply chains, and promote the production of efficient and sustainable PV products. Achieving the objective of 30 GW of committed European manufacturing capacity by 2025 would generate significant economic benefits, including approximately USD 66 billion of new GDP per year and the creation of more than 400,000 jobs.

ChallengesHigh Cost of Solar PV Installation

Solar PV installation is somewhat more expensive than setting up conventional solar panels, which may limit its use in residences with relatively moderate energy consumption. For instance, the price of 15 ground-mounted 300-watt solar panels is USD 14,625. Since the solar structure would raise the cost of each solar panel by USD 500, the solar power generating system would be utilized more rarely. However, limitations including the high cost of installation, storage, and conversion of energy equipment and the solar module's poor efficiency are anticipated to restrain the market's expansion throughout the forecast period.

Recent Developments

• The REPowerEU planned to invest in energy such as renewables, hydrogen infrastructure, energy efficiency and imports of liquified natural gas, or LNG by 2027. Additionally, the plan also aimed to improve energy efficiency in residential, commercial and industrial buildings and speed up the deployment of renewable energy projects across the European region.
• In January 2021, European energy companies planned to invest in renewable energy during the upcoming years. By 2030, spending on wind and solar energy approximately USD716 billion and could total up to one trillion dollars. German energy utilities RWE and EnBW planned massive investments in wind and solar parks. By the end of 2022 alone, RWE planned to invest a net USD 5.51 billion in renewable energy and EnBW planned to invest around USD 4.41 billion by the end of 2025.

Market Segmentation

The Europe Solar Energy Systems market can be categorized by product type, service, end use, country, and competitive landscape. In terms of product type, the market is divided into solar panels, solar inverters, and solar batteries. Furthermore, the solar panels segment includes monocrystalline, polycrystalline, and thin film sub-segments. Similarly, the solar inverter segment is classified into central, string, and micro sub-segments. Additionally, the solar battery segment is further divided into lithium-ion, lead acid, and flow battery sub-segments. With respect to service, the market is segmented into new installation and maintenance & repair. In terms of end use, the market is segmented into commercial, residential, industrial, and agriculture. Additionally, based on country, the market is segmented into Netherlands, France, United Kingdom, Italy, Germany, Spain, Portugal, Poland, Switzerland, and Austria.

Market Players

Hanwha Q CELLS GmbH, REC Solar Holdings AS, Elecnor Group, Luxor Solar GmbH, IBC Solar AG, Aleo Solar GmbH, Selfa GE SA, Schneider Electric SE, Siemens AG, General Electric Company