Over the past two decades, solar energy has established itself as a crucial pillar of Europe’s energy transition, supporting the decarbonization of economies and reducing dependence on fossil fuels. Rapid technological advancements, consistent policy support, and continuously decreasing costs have significantly contributed to the expansion of photovoltaic (PV) capacity across Europe.
Market Evolution: From Rapid Expansion to Maturity
Since 2010, the cost of photovoltaic panels has decreased by over 70%, while their efficiency has increased to over 21% today. By the end of 2024, the European Union had accumulated an installed capacity of 337 GWp, accounting for 16% of global capacity. Germany (99 GWp), followed by Spain, Italy, the Netherlands, and France, dominates the European solar landscape, collectively representing about 80% of the EU’s total photovoltaic capacity. However, the once-rapid growth has recently slowed. In 2024, solar panel sales contracted by 30% compared to the previous year, with the residential sector being most affected. Key contributing factors include the announced phase-out of the net-metering scheme by 2027, the stabilization of energy markets following previous years of volatility, and the approaching saturation of certain markets.
Current Challenges and Market Adaptation
Despite reaching a high level of technological maturity, the photovoltaic sector continues to face structural challenges. One of the most pressing issues is grid congestion, caused by the increasing volume of energy being injected into the network during peak solar radiation hours. The gradual removal of subsidies also raises concerns about the profitability of individual PV systems. Meanwhile, European imports of solar panels from China—currently the source of 98% of the EU’s supply—fell by approximately 40% in 2024. This decline, not offset by other markets, highlights the need to strengthen local production capacities. A notable trend is the rapid expansion of the energy storage market. In the Netherlands, installed storage capacity has been growing at an annual rate of over 100%, driven by increased demand for self-consumption and optimized energy use.
Strategic Outlook Through 2030
To meet its climate and energy targets, the European Union needs to double its photovoltaic capacity to 600 GWp, as outlined in the REPowerEU plan. The most ambitious targets remain in Germany, Italy, France, and Spain, though countries like the Netherlands and Malta have already surpassed their national objectives. According to analyzed scenarios, future growth will be driven primarily by the commercial and industrial sectors, where the integration of solar energy, combined with storage solutions, is becoming increasingly attractive from an economic standpoint. Technological innovation, the digitalization of energy infrastructure, and public policies focused on flexibility and resilience will be critical factors in overcoming current obstacles.
Despite the challenges faced in 2024, the medium- and long-term outlook for Europe’s solar sector remains positive. Photovoltaic energy is not only the most cost-effective but also one of the most efficient solutions for economic decarbonization. Adapting the market to new realities, investing in storage infrastructure, and modernizing distribution networks will be key elements in achieving Europe’s sustainability and energy security goals.
Sources:
National Solar Trend Report 2025 – Dutch New Energy Research & Solar365
IEA Renewable Energy Progress Tracker 2024
Solar Power Europe – Global Market Outlook 2024-2028
European Commission – Clean Energy Technology Observatory