Both the rooftop and the utility-scale segments grew significantly with the increase of the total annual market in 2022. But as in previous years, rooftop has remained the largest source of solar installations in the EU. The current energy crises obviously has been playing a large role in increasing demand for rooftop PV, as the technology promises a hedge against rising retail power prices. Moreover, system sizes are often increasing as consumers prepare for individual electrification of transport and heat.
Rooftop solar added 25 GW in 2022, 8 GW more than in 2021. There was a strong increase on the residential and small commercial segment, as such investment decisions can be quickly made, and such small systems sizes rather quickly built. At the same time, as several governments are increasingly looking into solar to reach their climate ambitions, they are creating demand for large volumes of utility-scale solar via auctions and tenders. On top comes a quickly increasing volume of systems outside government schemes as companies now even more look into renewable power procurement through PPAs – to source green and at lower cost than from fossil fuels; this includes both on-site and off-site PV power plants.
A total of 17 GW of ground-mount solar power plant capacity was added in 2022, compared to 11 GW in 2021. However, throughout the year, the market share of rooftop vs. utility barely changed from 2021 to 2022, decreasing slightly its total share from 61% in 2021 to 60% in 2022, while utility-scale grew from 39% to 40%. Although the rooftop segment grew faster than anticipated due to the energy crises, the 2022 growth rate of rooftops in the EU was lower than for utility-scale, at 45% and 51% respectively.
Many projects – merchant, PPA and tender-based – have been under construction and finished over the course of the year. However, looking across all segments, the commercial sector (10 kW-250 kW) increased most, at a rate of 55% from last year. Compared to our previous European Market Outlook, the speed at which rooftops are expected to lose market share to utility-scale has slowed down. Earlier, we were expecting annual utility installations to surpass annual rooftop installations in 2023 with a 52% share.
The energy crisis has strongly altered the playground for solar PV
While rooftop solar is primarily limited by installers’ capacities, permitting issues, which affect much more the large-scale systems, are yet to be fixed in most Member States and on local levels, as government market interventions are starting to cause insecurity among investors and lending institutions. We are now seeing rooftop to defend its leading position in the EU at least until 2026, when annual additions might break even with new utility-scale capacities. When looking at cumulative installed capacities, rooftop PV represents 66% of the 209 GW installed across the EU at the end of 2022. With the slower than earlier expected increase of large-scale solar, the total rooftop share is expected to decrease only slightly to 59% by 2026.