An EU Budget fit for solar

The Clean Industrial Deal identifies cleantech manufacturing as one of its two pillars, along with the decarbonisation of energy-intensive industries. It should come with EU support. 

The EU needs to launch a Cleantech Manufacturing Bank. This could be a funding scheme that channels various sources of support including grants, loans and de-risking instruments for upscaling cleantech. It could be completed with a mechanism that brings in additional national support through Auctions-as-a-service. It must help bring new technologies to market (like perovskite PV technologies), but also industrialise mature ones that are needed at gigawatt scale for the transition. 

Solar PV requires specific calls, within this Bank. Solar PV calls should compensate for additional costs associated with running factories (OPEX) at all steps of the value chain, through EU-wide competitive auctions.

More than 70% of renewables will be connected to the distribution grid by 2030. Building up and retrofitting our distribution grids to prepare for an electric, flexible energy system is a key enabler for the deployment of solar PV.

Distribution grids bring European value. European companies have received cohesion policy funding in the current period under this priority. Upgrading them for more secure, resilient, flexible, clean and affordable electricity across the continent perfectly fits the EU cohesion policy objectives, but also our competitiveness, security and decarbonisation agenda. 

The EU needs to double its investments in distribution grids, from the current EUR 37 billion/year to EUR 67 billion/year between 2025 and 2030. The upcoming MFF should earmark funding for distribution grids buildout, retrofitting, innovation and supply chains. The European Commission can: 

• Mandate national earmarking in national plans for strengthening local distribution and flexibility assets
• Create a Distribution Grids Facility within the European Competitiveness Fund to bolster more investments and fill in national gaps, e.g. for innovation.

According to our Mission Solar 2040 study, Europe’s battery capacity should multiply by 10 this decade, from around 60 GWh today to over 600 GWh by 2030. Battery Energy Storage Systems (BESS) are essential for strengthening the EU’s energy security and competitiveness by enhancing grid flexibility, maximising the use of renewable energy, and effectively dealing with energy price volatility that stems from the EU’s reliance on imported fossil fuels. 

According to our Mission Solar 2040 study, battery storage will provide 27% of EU daily flexibility needs by 2030 and 39% by 2040 in an electrified, flexible energy system. That makes batteries the strongest solution to respond to grid needs.

Support schemes, whether for standalone or co-located batteries, are crucial to secure long-term contracts for battery storage projects. We need more inclusive auction designs, CAPEX support, and enabling batteries to participate in multiple revenue streams. Those mechanisms encourage deployment and drive down costs. At European level, CAPEX support for battery energy storage must be a priority in the upcoming MFF. The European Commission should give long-term certainty with easily accessible EU funding during the whole programming period.

Direct electrification with renewables is the most cost- and energy-efficient solution to decarbonise most sectors in transport, buildings and industry. However, the current electrification rate has stagnated at around 23% for the last ten years. This highlights the need for accelerated action. 

Electrification must remain central to funding designed for industrial decarbonisation during the whole programming period, especially for low- and medium-temperature heat. It offers a scalable, mature and efficient pathway to cut industrial emissions. 

The European Commission’s clear focus, in the draft Terms & Conditions of the Industrial Decarbonisation Bank’s pilot auction, on direct electrification as a priority technology for decarbonising industrial heat is both timely and welcome. 

We also encourage the European Commission to consider supporting operational costs through Carbon Contracts for Difference (CCfDs). This would be key to unlock investment and deliver meaningful CO₂ reductions. Similarly to the proposed Cleantech Manufacturing Bank, this Bank could channel EU and national support in the form of grants, loans and guarantees, to ensure coherence and continuity at all administrative levels. 

The solar sector is expected to generate more than one million jobs in Europe by 2030. However, companies are already facing workforce shortages across different roles, from engineers to installation professionals. While the EU has introduced various funding programmes for green skills, most of them are too broad or fragmented to effectively address the specific needs of the solar sector. 

The next MFF should increase investment in initiatives like the Solar Academy and Reskill4NetZero to help reach more learners and build better tools tailored to the solar sector. They are key projects, but they have limited resources. Their current budgets of around 4–5 million euros are far too small given the scale of the workforce gap across Europe. 

The EU should also fund dedicated programmes to support inclusion, with a focus on attracting diverse talent into high-skilled solar roles. There is a clear gap when it comes to diversity and inclusion. Women and other under-represented groups are not adequately supported to join the renewable energy workforce. This is a loss for both EU values and workforce planning. 

Finally, the EU should dedicate enough resources to support the creation of a shared space for cooperating and exchanging learnings — helping projects across Member States to scale and improve. Coordination between sectors and countries remains a challenge. 

The upcoming EU budget must help close the innovation gap in technologies of the future. Renewables, and notably solar PV, need a higher budget in the EU’s research and innovation funding. Less than 5% of the funding awarded through the Innovation Fund has gone to innovative renewable energy or storage projects. 

Europe risks losing the innovation edge on those technologies to global competitors, at a time when we should lead the energy transition with homegrown renewables, electrification and flexibility. 

Framework Partnership 10 (FP10) must continue the solar PV partnership and bring tangible results to the research in solar, under key priorities: 

• Performance enhancement and cost reductions
• Lifetime, reliability and sustainability enhancements
• New applications through the integration of PV (e.g. building-integrated PV, floating, agriPV) 
• Energy system integration of PV
• Socio-economic aspects of the transition to PV