What are NECPs?
In 2019, the EU mandated its member states to publish and implement 10 year National Energy and Climate Plans (NECPs).
Running from 2021 to 2030, NECPs are meant to set out the member state's targets, policies, and measures that will enable the country to reach the 2030 EU renewable targets.
In 2019, the EU was only aiming for 32% renewables in its energy mix by 2030. As of 2023, that target has been increased to 42.5%, with a further indicative 2.5% on the table.
Since 2019, the EU solar market has also seen remarkable solar growth. The speed and scale of the solar wave has exceeded all previous expectations.
In 2022, the EU installed more than 40 GW of solar, seeing a 47% year-on-year increase from the 28 GW installed in 2021.
Why are NECPs important for solar?
The NECPs are crucial for solar. They form the basis for the EU-27’s energy policy and strengthen the business environment for solar investments in Europe – predictability, efficiency, and transparency.
The energy transition touches every part of our lives. Systems and society must get ready. That means setting clear targets that reflect the true potential of solar.
In our European Market Outlook for Solar Power 2022-26, we revealed that three-quarters of EU countries will already hit their solar targets by 2025. The rest will all hit their targets by 2027.
The new database below sets out the true scope for solar ambition in the EU, country by country:
- Discover how much solar your country has already installed
- Compare each country's solar target with current market projections
- Understand the key remaining challenges
- Workers availability The main bottleneck in the country is the availability of a skilled workforce. For the connection of inverters and modules, in particular, electricians are needed. A lack of training and certification of workers is a key issue.
- Grid congestion The Austrian grid needs upgrading in order to keep solar development at a sustained pace. Works on the transition and distribution grid are take a long time. Presently, plans for grid-development are under preparation. This poses a challenge in Austria's solar deployment.
- Administrative procedures Permitting times are a bottleneck in the timely deployment of solar PV. Additionally, administrative requirements are inconsistent.
- Administrative procedures The fragmentation of responsibilities among the regions creates uncertainty and hurdles for larger solar PV projects in particular. Auctions are regionally organised and are historically known to lack vital information, discouraging investors.
- Grid integration and flexibility Despite the high share of prosumers in the country, the NECP does not include distribution grid modernisation. The fragmentation of governments creates additional complexity, with Wallonia and Flanders focusing on different aspects in their flexibility frameworks. Grids in the more rural parts of Wallonia remain vastly underequipped to handle ground-mounted PV projects, while the Flemish grid needs to integrate offshore renewables as well as a large amount of rooftop PV.
- PV target Bulgaria’s solar target remains low as PV will only account for 2.6% of electricity in 2040. Yet Bulgaria benefits from high irradiation rates, notably in the south of the country, and has an important solar potential, which is not reflected in the current target.
- Administrative procedures The plan mentions measures to simplify administrative procedures, but these measures are significantly lacking ambition.
- Poor financial landscape Electricity prices are kept artificially low, lowering the attractivity of solar PV. Additionally, the current government favours fossil fuels over solar and renewables.
- PV target Croatia has shown an important willingness to support solar development. Yet, although the NECP includes extensive information, including year-by-year installed capacity, the PV capacity target is at the conservative end of the spectrum, with only 600 MW of new additions over 10 years.
- Auctions The NECP mentions the existence of an auction plan over the next three years. The publication and the implementation of such a plan will be critical to drive the growth of solar in Croatia.
- Prosumers Croatia has set itself a target of developing a 300 MW capacity of prosumers by 2030, driven by a tax exemption of self-consumed electricity and direct marketing, accompanied with an ambitious programme for PV in buildings. A further regulatory review should set a framework for active customers and renewable energy communities.
- Grid and land contraints An island in the middle of the Mediterranean, Cyprus still does not have an interconnection with the mainland. Having no storage capacity or smartness to avoid high curtailment levels, the power grid is not in a good condition to integrate solar projects.
- Regulated market The country is undergoing a process of liberalisation of the energy market, moving from a fully vertically integrated system, to the possibility for private players to participate in market dynamics. A fully functioning liberalised market should be operative by 2023.
- Poor financial landscape An important obstacle to the development of large-scale PV projects is the poor support from the banking sector for PV project financing, which poses a challenge to accessing financial support, and worsens investment conditions.
- PV target The NECP outlines in detail, on a year-by-year basis, projected solar developments in the Czech Republic, giving a good visibility to investors. However, considering the country's solar potential, the PV target appears underwhelming. Against this background, the government acknowledges that the target will be surpassed by a large extent.
- Public acceptance for large-scale solar In the country there is a perceived general lack of support for large-scale solar, due to the fact that the past feed-in tariff regime granted very generous subsidies to large-scale PV projects. Since new utility-scale projects have not been built in the last 10 years, new projects might face public acceptance concerns.
- Workers’ availability The sudden increase of demand for solar in the Czech Republic has led to a shortage of skilled workers. While this already forms a bottleneck for installers, recently, grid connection became a problem as well. DSOs face labour shortages and grid connections can take multiple months.
- New tariff regime Unfavorable new grid connection tarrifs implemented in January 2023 slow the development of larger projects. Specifically, the higher connection tariffs are expected to hurt the business case significantly.
- Grid development Denmark has developed a vision for the future of its grid, also addressing an expected growth of renewable energies. However, the new grid connection tariffs push the costs of grid development towards project developers. There is some debate about who needs to carry those costs, but currently, the new tariffs drive away international investors. This "chicken-and-egg" problem of grid capacity persists.
- Prosumers Recent developments in the energy sharing segment show positive market signals, supported by high electricity prices. This sector, however, remains limited compared to its potential. This is partly due to the fact that small-scale PV is not supported by incentive schemes.
- PV target Despite ambitious RES targets and detailed trajectories for solar capacity and generation, the solar ambition remains very low, as the country has already reached the 2030 PV capacity target set out in the plan. The solar target should be increased further.
- Administrative procedures Estonia has created a manual of proceedings for project developers, and has taken steps to identify suitable areas for the development of solar projects with local authorities. This is a significant best practice. Measures to further simplify administrative procedures and introduce a one-contact-point system, should further facilitate the deployment of new solar projects.
- Prosumers The development of solar prosumers is a clear objective of the Estonian energy policy; the plan includes an estimated potential for new and renovated buildings. The country already proposes financing support for prosumers, but the development of support frameworks for individual and collective self-consumers, will be critical to develop the market.
- PV target The Finnish solar target results into just about 900 MW of solar installed over ten years, much below its potential. The ambition should be raised, including through the setting of solar auctions.
- Administrative procedures The plan does not contain information on current or future measures taken to simplify administrative procedures. The implementation of the RED III will be important for facilitating the development of new projects.
- Administrative procedures Solar project developers in France are facing tight regulation, challenging grid connection processes and long administrative procedures, which need to be clarified and simplified. Administrative deadlines should also be shortened.
- Access to land Several bureaucratic hurdles are due to the difficulty in accessing land for ground-mounted PV projects, in particular agricultural land. A plan needs to be developed incorporating the use of land for solar projects, and the real impact on soils and biodiversity. However, innovative PV solutions resulting in minimal issues in land availability, such as agri-PV and floating solar, should be encouraged.
- Prosumers The self-consumption segment is still far behind the country's potential. The support mechanisms for self-consumption projects need to be improved to fully recognise its value.
- Workforce and supply chain shortages A shortage of electricians and a lack of availability of inverters is limiting market growth, and is raising the costs of smaller installations. While the backlog in inverter supply is expected to be resolved in the mid-term, it is essential that the bottleneck of installers is resolved as soon as possible through accessible trainings and campaigns.
- Revenue cap The proposed revenue cap is creating market uncertainty, and might have a significant impact on Europe's largest PV market.
- Grid development Currently, grid capacity is the main bottleneck for larger PV projects. Additionally, the responsible authorities have been criticised for the non-transparent decision-making process. This results in the exclusion of some projects.
- Administrative procedures Despite mandatory deadlines, the organisations responsible for the issuance of environmental permits often fail to deliver them in time. This causes unpredictability and delays which discourages international investors.
- Prosumers Although data suggests that this segment is also gaining traction, the lack of support measures impede small-scale PV deployment.
- Prosumers The prosumer business case was severely hit by the phaseout of the net-metering scheme. Aditionally, a sudden abolition of the FIT scheme for an undetermined period has frozen the market. The regulation of electricity prices is also harmful for the attractiveness of residential solar. However, the recent rise of government-regulated prices has revived its business case.
- Auctions Auctions have brought disappointing results so far, mainly because of stringent deadlines and excessively low prices. A revision of auction frameworks should be considered.
- Grid development New larger PV plants have been unable to connect to the grid, due to grid congestion concerns. It is uncertain when the grid might open up again. This creates a clear bottleneck which should be resolved urgently.
- Administrative procedures The plan mentions that measures are being established but it does not discuss these measures in detail. Further measures should be put in place to ease the administrative burden, which can create heavy barriers to investments in renewable projects. Furthermore, the need for standardised local administrative requirements and fees, which currently differ widely depending on local authorities, should be addressed.
- Lack of resources and workforce As large EU countries with more advanced solar markets advance their solar markets, Ireland might face competition to grow its workforce and ensure access to solar components.
- Permitting procedures Despite positive legislative developments, the authorisation of projects remains a challenge. Permitting can take a long time, depending on the region.
- Access to land Under the current auction scheme, solar PV projects do not have permission to be built on agricultural land. As a result, auctions have been largely undersubscribed so far. Cooperation with regions will be essential to identify suitable land for solar PV projects.
- Grid development The Italian plan contains detailed information on the upcoming challenges, including a quantification of the required investments, but does not give a clear vision on measures that will be taken. Monitoring the implementation of the proposed regulatory changes will be critical.
- PV target The Latvian NECP has set an ambitious target for the development of renewables. Yet, there is no plan or target or auctions for solar installations. This does not give investors enough visibility for their investments.
- Prosumers A specific measure should be introduced to encourage prosumers, based on support schemes, tax exemptions, and the development of energy sharing.
- Administrative procedures The plan does not assess possible difficulties that could be encountered by PV project developers. It also does not propose remedy measures, or measures to implement the Clean Energy Package.
- PV target In 2021, the country adopted a new solar PV target of 1 GW installed by 2025. This positive development should lead to a significant upward revision of the NECP target. This reflects the country's solar ambition towards 2030.
- PPAs While the plan includes extensive information on different measures supporting PV deployment, a framework for Power Purchase Agreements still needs to be developed.
- Auctions The NECP indicates that the new multiannual plan for tenders will be published, with tendered volumes subsequently increased each year. However, details of the volume and designs are not included.
- Prosumers The plan shows very good provisions for solar prosumers and is developing several interesting incentives. In particular, the proposed measures will tackle the different barriers to self-consumption, from public incentives, to awareness raising and financing. Self-consumption schemes need to be fully implemented now under national law.
- Administrative procedures The plan contains interesting measures to simplify the administrative procedures linked to support schemes and financing schemes for prosumers. Nevertheless, these measures must include the establishment of a clear “one-contact-point”, which should simplify the development of solar projects.
- PV target The trajectory of solar capacity remains low due to several factors such as physical and spatial limitations, resource availability, cost of land, and other issues.
- Prosumers The plan proposes measures to incentivise the development of self-consumption. Yet, it does not include a proposal to transpose the Clean Energy Package in relation to energy sharing. In addition, the NECP could incorporate the development of prosumer schemes
- Administrative procedures Specific provisions to facilitate the administrative proceedings for self-consumption and distributed renewables are included. Plans to prepare the implementation of the Clean Energy Package are also referred to. However, the NECP should contain more detailed measures on CEP provisions.
- Grid availability Limited capacity of the Dutch power grid could pose a significant challenge to solar deployment. Lack of grid capacity at the middle and high voltage level is expected to lead to long delays and possibly project non-realisation.
- Land availability The large-scale sector faces the challenge of securing suitable land for solar deployment. Land availability issues often come together with public acceptance concerns in relation to the use of agricultural land for solar projects. The industry is tackling these issues by ensuring a quota of local participation in renewable energy projects, and by developing a biodiversity label for large-scale projects.
- Grid availability One major challenge is the lack of grid connection points for new projects. This exacerbates the delay on project completion, which is already being compounded by supply chain disruptions and price hikes.
- PV target Important to set ambitious targets. After years under strong coal dependency, the public perception towards solar is shifting; momentum is crucial to capture the true potential of solar PV. This is not reflected in the current NECP target, which has already been surpassed.
- Price cap The recent introduction of an energy price cap creates uncertainty for the future of solar PV deployment; its impact is still being assessed.
- Permitting procedures A number of permitting hurdles remain, including the response time of relevant national entities. This is largely due to a lack of digitalisation in administrative procedures, and poor inter-organisational communication. The whole process needs to be reformed and streamlined.
- Grid development A lack of grid capacity creates uncertainty for larger solar projects. The country's solar PV potential might not be met if grid development does not accelerate.
- Prosumers Self-consumption is a limited market in Portugal, due to a lack of a support framework.. Furthermore, the online self-consumption portal has suffered from numerous bugs, which discourages potential investors.
- PV target The NECP target does not fully reflect the potential for solar development in Romania. The country's current 2030 target lacks ambition.
- Auctions The support for RES through auctions is only mentioned implicitly. Details on volumes, schedules and design for renewable and solar tenders are absent.
- Prosumers Positive elements are included in the NECP for prosumer support schemes. At the same time, the plan should be more ambitious on prosumer development.
- PV target Both the overall ambition for RES deployment and the solar PV contribution remain low. The plan could be updated with more accurate information, as the goals and trajectories are inadequate and rely on outdated data. With 648 MW of new capacity installed through 2030, solar ambition remains limited.
- Auctions The plan outlines general information about RES auctions, but not specifically for solar. Moreover, the indicated capacity of auction schemes appears low.
- Prosumers The Slovakian plan does assess the prosumer capacity in the country. However, it does not outline details on support schemes which will be developed to incentivise self-consumption, including energy sharing.
- Auctions The NECP does not include information on auction design, volume and schedule. This poses a significant challenge to PV project development in the medium term.
- Prosumers Objectives set out in the plan include improving the role of active consumers and providing financial support for prosumers. However, it is important that these objectives are enshrined into law, and accompanied by developed regulatory frameworks, such as energy sharing. In addition, there are concerns about the long-term stability of the regulatory framework. This is harming the investment environment.
- Administrative procedures The plan contains interesting proposals to simplify administrative procedures. However, the administrative procedures are still very extensive, and difficult to understand. In addition, there is no specific contact point for the permit granting procedure; a contact point here could significantly ease processes.
- Permitting procedures The large amount of solar projects under development in the country are facing tight permitting challenges. Regulation passed in 2020 imposes strict deadlines to projects under development, putting pressure on both developers and the administrative authorities to complete the procedures in time.
- Social acceptance Public perception of solar is becoming more polarised, as a NIMBY attitude is growing strong among local communities. The industry needs to curb this trend by showcasing the positive impacts of large solar projects on both local communities, and the natural environment.
- Prosumers Requirements for solar PV installations differ per municipality. Processes are not standardised and often not digitalised. This results in long waiting times for prosumers, and might also discourage investors.
- PV target The plan outlines a subpar solar ambition. In fact, its 2030 target has already been surpassed.
- Auctions The plan does not include any information on the future auction schedule, volume, and design. Providing more visibility to investors here will be critical. The government has not announced any tender since the publication of the NECP.
- Permitting procedures Permitting for large-scale projects faces challenges when it comes to authorisation at regional level. While the national government and local municipalities are supporting project development, the limitation comes primarily from Länsstyrelsen, the regional branch of national authorities.
From October 2021, the EU Commission makes an assessment of the member states’ progress every two years.
By the 15th of March 2023, and every two years thereafter, member states should report to the Commission on the status of the implementation of their NECPs (progress report), including progress on reaching the targets, updates on policies and measures, and projections.
By the 30th of June 2023 member states must submit a draft update of the NECPs to the Commission or justify that the current plan remains valid.
By the 30th of June 2024 member states should notify the Commission of a final update to the NECPs unless they have justified that the current plan remains valid.
European Market Outlook for Solar Power
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