A wrong-footed market
Only a few years ago, Europe was the most important and largest solar market in the world. The strong growth of photovoltaics in Europe ensured that costs for solar plants fell rapidly. However, sudden changes in the subsidies offered by several EU countries and the separation of the European market from continuing efficiency gains and cost reductions in solar module production have wrong-footed Europe. Germany's expansion too has fallen behind the targets determined by the federal government. In 2014, around 1.8 GW of output were newly installed in Germany; another In 2015 1.4 GW new PV were installed. However, government targets are fixed on an expansion of 2.4 to 2.6 GW per annum.
The solar market worldwide continues to grow and achieved a new record during 2014 of around 40 GW. It is possible that, during the next five years, annual growth might double whilst at the same time manufacturing costs for solar modules could halve again.
Europe runs the risk of being falling behind even further. The reason is that, since the second half of 2013, minimum import prices for solar panels have been imposed. This has already prevented a cost reduction of around 20 % in module manufacture to be passed on to customers. At the same time, falling feed-in remuneration and levies for on-site consumption result in shrinking revenues, which make solar investments less attractive.
Solar value creation happens on site
More than 75 % of the value creation of every solar PV system in Europe remains within the region – even when modules are used that originate from outside Europe. The reason for this is that in Europe the value creation chain has, at every level, a broad footing – from the production of raw materials to trading in solar power.
Worldwide, solar modules have become an affordable mass-produced commodity. Compared to Southeast Asia, Europe is of lesser relevance when it comes to the manufacture of modules themselves. For example the capacities and production lines available are significantly smaller, driving the cost basis correspondingly higher. At the same time, the solar industry worldwide is heavily networked, and European companies play a key role at different stages of the value creation chain.
In other words, Europe is damaging itself by imposing higher tariffs against Chinese solar products, by making a central energy source more expensive for the future. As a result, the loss of thousands of jobs is a real threat.
At this point, we would like to introduce you to a selection of current studies, figures and analyses concerning the German, European and international solar market.
The German Federal Ministry of Economics published an overview of the development of installed PV capacity in Germany early 2015. This states, amongst others, that the reduced expansion is due to the fall in remuneration together with the stagnating module prices in Europe. Read more
In February 2015, the Agora energy transition think tank published a study on current and future cost of photovoltaics. It's core statement was: In future, solar energy will become more affordable still, and in some regions of the world will become the most affordable form of power generation. Read more
The trade association SolarPower Europe annually publishes its Global Market Outlook. Amongst other things, the various scenarios in the current report state that by 2019, solar energy could increase its share of the European energy mix by 80 %. Currently, PV plants with a total of 40 GW output are installed in Europe. Read more