The European solar market is re-emerging. According to the latest research studies by Wood Mackenzie Power & Renewables , more than 10 gigawatts were installed in 2018 for the first time in five years, and the market should break the 20 gigawatt barrier by 2021.
Countries are rushing to meet their climate and energy obligations by 2020, while the goals for 2030 are currently under review.
During this period of time, European electricity markets will see deep levels of decarbonisation, with photovoltaic solar energy playing a key role. Several countries have ambitious targets for solar energy: the Italian government is targeting 50 gigawatts by 2030, and France has a target of 20 gigawatts by 2023.
Main growth engines
Auctions for large-scale projects and feed-in tariffs (FIT) for solar distributed generation (DG) continue to be the two main drivers of solar installations in Europe. In particular, in France and Germany, auctions will deliver large volumes of capacity, among which will be obtained almost 19 gigawatts between 2019 and 2024. Italy will also launch joint solar wind energy auctions in 2019, although the final signing of the agreement is still required. legislation of the European Commission.
Apart from the auction programs, deployment without subsidies in Europe continues to pick up pace. Spain has a portfolio of almost 10 gigawatts of projects without subsidies in development, in addition to the 3.9 gigawatts of projects awarded during the 2017 auctions that will be delivered in 2019. Most of the developers are looking for corporate energy purchase agreements ( PPA) or with electric companies. In addition, other projects without subsidies are being developed in the United Kingdom, Italy, Portugal, Germany and Denmark.
A post-subsidy solar energy market is beginning to take shape in Europe. However, there are mixed signals in the distributed solar power generation market. Germany continues to deliver large volumes of distributed generation supported by FiT each month, although a limit of 52 gigawatts is looming for the FIT aid program: Wood Mackenzie believes it will be reached by 2022.
In the United Kingdom, the tap of the subsidies (FiT) has been closed to new participants, although the future rates for the energy exported to the network are not clear. All signs point towards a greater role for photovoltaic storage systems in Europe in the coming years. As the aid is less generous (or eliminated completely), self-consumption will be increasingly attractive.
Drop in costs
In 2019, Wood Mackenzie estimates that, on average, the total costs for a large-scale system will be less than $ 1 / Wdc, with an average cost of $ 0.87 / Wdc in all major European markets. Switzerland and Belgium continue to be the most expensive electricity markets due to higher-than-average land acquisition costs and hourly wages.
Although Spain came to have one of the lowest costs in all European countries, the influx of projects has created an overwhelming demand for developers and EPC, which has created bottlenecks. As a result, the market has experienced a stagnation in the reduction of costs. From 2018 to 2019, Spain is expected to see an average decrease in total costs of 1% compared to the rest of Europe, which will see an average drop of 9%. As more EPCs and developers enter the market, bottlenecks will be resolved.
Wood Mackenzie predicts that 16.9 gigawatts of photovoltaic energy will be installed in 2019 and a total of 124 gigawatts installed throughout the continent over the next five years.