There are a variety of reasons why solar was selected the energy source that added more capacity than any other power generation technology in the EU in 2019 — and there are a lot of reasons why solar is extremely likely to continue to be in the front runner in the future as the region strives to become carbon neutral by 2050.
Solar power’s expansion phase has started in Europe. With solar combining critical development features of unmatched flexibility, versatility, low cost — and the highest popularity of energy production resources among European citizens, it is going to have an integral role for the EU solar power, fulfilling its 2030 climate goals.
The solar energy share in the EU is small at almost 5%, which means the business opportunities are colossal to exploit its full potential both in the distributed and central power generation areas — and at the energy, heat, and transport energy sections.
We’re now taking a closer look at the significant trends that will shape the growth of solar in the EU. We’ve chosen 10 topics, which are top priorities in our daily work, and present the challenges and opportunities in the areas which are critical to master to enable sustainable and fast dissemination of low-cost solar energy.
1. Industrial Solar Goal
As solar is on the verge of resurrection in Europe, it’s essential to connect the dots for helping local PV technology manufacturers to compete at home and on a global level.
- EU and its member countries lack an individual plan for solar: The European solar entrepreneurs faces increasing global competition, while it misses a clear commitment from European policymakers. Solar hasn’t been recognised as a strategic value chain, whereas it is going to play a role in powering businesses and companies.
- Single-sided focus on using renewables to reach carbon Neutrality by 2050 at the lowest prices possible without ensuring a robust European base at the same time.
- Maintaining and advancing solar industrial and technological know-how in Europe.
- Insufficient European and national financial instruments to support investment in innovative.
- EU benefits world-leading from a unique R & D ecosystem, which has produced world-leading solar technology advancements that could be industrialised in Europe.
- Significant market prospects for solar in Europe open an opportunity for present and new European photovoltaic (PV) producers to reestablish a full solar value chain and scale-up their production and become internationally competitive.
- Opportunity to brand the EU solar power sector for a sustainability leader at the international level.
2. Solar Structures
Securing the EU’s built environment for industrial leadership and climate.
The transposition by member states of the Energy Performance of Buildings Directive, which requires all new buildings to be NZEBs by January 2021, isn’t yet complete. Definitions of NZEBs vary broadly amongst member states, which makes comparisons problematic. Further, not all member nations comprise direct renewable energy requirements in national legislation.
-Addressing the energy performance of existing buildings: EU laws on the energy performance of buildings just covers new buildings, which will account for 25 per cent of Europe’s building stock in 2050. Because of this, energy renovation rates of existing structures will need to at least triple to meet energy and climate goals.
-The slow uptake of solar rooftop installations despite its vast potential in Europe because of lacking access to finance, need to manage re-skilling and upskilling of existing construction and electrical workers and will need to increase awareness among EU citizens.
- The potential for solar rooftops in Europe is gigantic: At least 600 GW of rooftop capacity remains untapped throughout the EU.
- Stepping up energy renovations can play an essential role in providing a just and reasonable transition by procuring over 20 million jobs throughout the construction industry and unlocking new opportunities for qualified and local jobs.
- Security of supply: The deployment of on-site solar as a part of energy renovations can encourage the safety of the supply of EU regions, cities, and citizens, ensuring direct renewable energy sources for electric vehicles.
- The renewable electrification of EU buildings fostered with on-site solar installations can provide invaluable services to the electrical system.
- An ambitious approach to renovate the EU’s building stock would lead to EU international leadership in clean construction technologies such as in building energy efficiency technology, complex on-site PV solutions, and high-tech BIPV products. It would also strengthen Europe’s BIPV manufacturers.
3. Smart Solar Technology
Exploring the benefits of digital solar to speed up the energy transition
- Lacking mandatory roll-out of digital infrastructures (smart appliances, smart meters, power electronics) that will give rise to a more flexible and reliable energy system in Europe.
- Current incentives for network operators based on CAPEX investments (grids) don’t incentivise the use of flexibility options to improve network management and reward the accuracy and speed of solar & digital services.
- Data access, control, and interoperability standards continue to be defined in EU solar power.
- Consumer expectations evolve as they need more intuitive, personalised, engaging and ethical energy services.
- Digital knowledge: Policymakers will need to keep up with developments in digitalisation, innovation, and changes in customer tastes.
- Digitalisation extends solar’s capabilities: With the aid of innovative digital solutions and power electronics, solar installations become more flexible and supply high-quality ancillary services to network operators on-demand, with more precision than conventional generators.
- Digitalisation enhances consumer involvement in the energy economy, enabling EU citizens over their power consumption to conserve energy, and even create new income by giving flexibility services.
- Digital solutions unlock new flexibility resources by fostering the sectoral integration of essential sectors like transportation, buildings, and industry.
- Clean energy provides a huge opportunity to promote Europe’s industrial, digital leadership in that section as European companies are already international leaders in digital energy solutions.
4. Smart Tech for Grid Integration
Smart grid integration is the next frontier for solar installation, and smarter regulation retains the key to supporting this type of modern electricity network
- Lack of incentives to utilise smart grids or smart plan for grid operators.
- Absence of incentives to develop flexible and smart solar installations in public tenders.
- Missing price signals in grid tariffs to incentivise load shifting and flexibility.
- Inadequacy of current grid tariff compositions for self-consumption (e.g. increasing capacity-based components,
- Deficiency of grid tariff for collective self-consumption.
- More cost-efficient and reliable electricity grid through better integration of renewable flexibility sources into the energy system.
- Enabling the electricity grid to incorporate higher shares of renewables helps attain a carbon-neutral Europe by 2050.
- Reducing network investment costs give a profit to European consumers.
- Higher acceptance for the European energy transition through the installation of decentralised solar
- Solutions which support local optimisation and reduce needs for transmission grid expansion.
5. Strong Sustainable Energy Solution
A focus on sustainability in the Europe Union provides local businesses with plenty of business opportunities
- The methodological challenge to set requirements and thresholds into a fast-evolving industry, and ensure the consistency of future new criteria with already existing legislation (WEEE, REACH, etc.)
- Difficulty in legislating over a constellation of photovoltaic (PV) products which take advantage of different technologies, materials and procedures.
- Limited effectiveness of EU policy instruments to regulate the CO2 footprint in a globalised marketplace.
- Stricter REACH Classification of chemicals present in PV products could constitute a barrier for PV recycling and add significant administrative burdens.
- More robust sustainability policies will allow solar to position itself as a truly sustainable energy solution.
- Vast funding opportunities linked to strong sustainability performance (IPCEIs and other state aid, green financing).
- Brand of the European solar industry as a sustainability leader at the international level.
- Establishing a European PV recycling business would:
- Provide access to strategically important raw materials and precious metals;
- permit for job creation;
- open new businesses models around PV end-of-life management.
- Revision of the WEEE Directive in the current legislative session can improve the landscape around PV end-of-life management.
6. Solar Mobility
Installing solar in the Driver’s chair as solar mobility market models have excited increasing attention from energy and transportation businesses.
- Absence of proper valuation for renewable energy sourcing in transportation and difficulty to assess the additionality of renewables in transport.
- Insufficient development of self-consumption solar schemes in Europe, including collective self-consumption.
- Inadequate development Of corporate PPA frameworks.
- Unrealised structure for smart charging models: lack of transparency of electricity markets to aggregators, absence of a standard frame for accessing automobile data, uncertain customer engagement.
- Better public acceptance of transportation and energy transition.
- Increased competitiveness of electric mobility as a result of some cost-competitive solar fuel (in solar self-consumption models and in solar PPA models).
- Optimised grid integration of decentralised solar and electric vehicles due to smart charging and integrated energy and e-mobility planning.
- Support for solar deployment with private finance.
7. New Financing Opportunities
Achieving a prosperous green EU economy based on renewables requires unlocking private and public funds.
- Missing sustainability Standards: The EU monetary policy framework needs integration of sustainability concerns to mobilise finance for sustainable growth.
- The cost of renewable energy projects remains too high in the individual Member States to unlock private investments and deliver ambitious CO2 emission reductions.
- Insufficient dialogue between investors and energy project developers from the public and private sector.
- There is limited awareness among private investors and renewable project developers on best-practices for risk-mitigation.
- Sustainable finance provides a EUR 180 billion investment opportunity every year. These investments might help:
- Secure adequate funding to achieves carbon neutrality and accelerate the energy transition.
- Boost EU innovation and support EU industrial leadership in clean energy technologies.
- Increase investments in circular projects, thus shaping an EC economic system aimed at eliminating waste and the continual use of resources.
- Shaping adequate financing programs for jobs can help create local jobs. For the solar industry only, 1.7 million jobs could be created in Europe by 2050.
- Way to meet SDGs: Sustainable finance is essential to implement the European Commission’s strategy towards achieving the United Nations Sustainable Development Goals (UN SDGs).
8. Solar Powered Businesses
Corporate sourcing of solar, powering competitive, and sustainable EU companies
- Regulatory uncertainties for self-generation of renewable energy differing from country to country:
- These are related to the interpretation of complex legal provisions, changes in service schemes, and changes in energy taxation and network costs.
- Limited awareness of the different business models – among medium and Small Enterprises: This represents a barrier to using on-site renewables via third-party financing, which limits the uptake of solar projects.
- Restrictions on signing contracts with more than one generator/supplier, which affects the majority of the member states.
- Cross-border PPA Limitations: Though legally possible, there are still barriers linked to the limited lack of transparent long-term auctions for transmission capacity, Cross-border Interconnection capacity, and market coupling.
- Missing compatibility of EU State aid guidelines with corporate renewable energy PPAs.
- European businesses can boost their sustainability and competitiveness by procuring low-cost renewable energy consumption over an extended period.
- Limited or no effect on the electricity grid through on-site commercial and industrial solar installations.
- Corporate sourcing of renewables generates competitive branding benefit.
- Increased value for shareholders as investors are more and more concerned about environmental sustainability.
- Corporate sourcing opens up opportunities for solar growth in Europe: The projected on-site solar cumulative installed capacity for the industrial and commercial sectors is over 190 GW by 2030.
- Develop a transparent system for the exchange of renewable-based GOs.
9. New Solar Markets
Tremendous investment opportunities for emerging solar markets in several areas around the world.
- Market entry barriers such as limited political will and institutional capacity, political and economic instability.
- No uniform funding Rules: Lack of transparency and coordination of existing European support instruments.
- No existing framework for the trade of green products
- Significant contribution potential to SDG7 as European companies are global industry leaders in both on- and off-grid technology and solutions.
- Huge business potential: SolarPower Europe expects if circumstances are right, that European markets could add 100 GW of solar till 2023.
- Power to all people: Solar as an easy-to-deploy, smart and agile technology can help achieve universal access to modern, reliable, sustainable and affordable energy across the world.
- Navigation through support tools: The NDICI has potential to aid overcome challenge of insufficient coordination of European support tools.
10. Sun Light To Hydrogen
Bridging the gap for a Paris-compatible European sector-coupling strategy utilising renewable hydrogen.
- Availability of renewable gas: For achieving carbon neutrality and ensure a secure energy supply, renewable energy will need to be complemented by power-to-gas technologies.
- Many green gasses are not renewable today: 95 per cent of so-called “green-gas” technology derives from fossil fuel production.
- Missing cost competitiveness: Even though technically achievable, the creation of hydrogen and other gases with renewable energy is not cost-competitive when compared with fossil-based technologies.
- Unfair assistance for fossil fuels: Existing subsidies to traditional generation technologies delays much-needed investments to bring forward the competitiveness of renewable electricity-based gases.
- More renewable power for more renewable gas: the untapped potential for energy could offer a sustainable supply to create renewable gases.
- Industrial leadership for renewable hydrogen: The EU could become the worldwide exporter of renewable-based electrolysis technologies that will be required at the global level to meet Paris targets.
- The synergies between the renewable power supply and the generation of renewable gases can strengthen the security of supply by giving fully sustainable seasonal storage.
- More cost-efficient energy transition: Producing renewable hydrogen with excess renewable energy in Europe reduce power losses and would prevent expensive curtailment.
In 2019, four EU solar power markets installed more than 1 GW of solar– Spain, Germany, Netherlands, and probably France, according to estimates based on Q1-Q4/2019 data. That would be twice as much as in 2018 when the Netherlands and Germany reached that level and four times more than in 2017 when only Germany was in that array. For 2020, we anticipate at least one market to expand that category, and that’s Poland, which was the fifth-largest market in the European Union in 2019.