“As solar in Europe is entering a record-breaking growth period, it is crucial to connect the dots to support local solar PV technology manufacturers to compete at home and on a global level,” writes Aurélie Beauvais, Policy Director at SolarPower Europe.
Since the adoption of Europe’s first “2020 climate and energy package” in 2008 up to the approval of Europe’s new 2030 targets in December 2018, the EU has shown strong climate leadership. In 2018, the share of renewables rose to 32.3% of total EU electricity generation. Solar in particular has impressive growth prospects for the near future: following a 36% increase in 2018, additional solar installations rose to over 100% in 2019, reaching close to 17 GW, and is set to meet the 20 GW of annual installations milestone in 2020. This is just the start of the solar renaissance in Europe.
As the European Union steps up its leadership and ambitions to become the first climate neutral continent, solar power is ready to play a crucial role. From about 5% of Europe’s electricity mix today, solar could account for at least 36% by 2050 according to Bloomberg NEF and up to as much as 62% in a 100% renewables scenario of Finland’s LUT University. Solar energy will not only play a key role in delivering Europe’s renewable electricity targets, it has also a huge potential to produce renewable hydrogen, which can help decarbonise hard-to abate sectors.
Apart from decarbonising the European economy and leading by example, there is also an opportunity for Europe’s 4th industrial revolution, with clean energy technologies at its core. The Green Deal Package should plant the seeds and come forward with a robust industrial strategy proposal. One of the key challenges for EU policymakers will be to identify strategic European industrial value chains to deliver on three critical priorities: (I) achieve higher climate ambitions, (II) ensure a fair transition that creates jobs and growth across all EU countries, and (III) safeguard Europe’s security of energy supply. The European solar industry has the potential to contribute significantly to all three strategic pillars.
First, Europe is leading when it comes to R&D institutes providing world-renowned solar PV innovations. European companies have joined forces with Europe’s leading R&D institutes to develop state-of-the-art solar technologies and enhance a competitive upstream solar industry; including silicon, wafers, cells, and modules. However, such initiatives lack the necessary support to scale up their production, which is crucial in order to achieve global competitiveness.
Second, solar PV production can deliver valuable growth activities in European regions that are undergoing an economic restructuring. Solar is the most job-intensive renewable energy source and can deliver a socially just energy transition for Europe, creating over 1.7 million highly skilled jobs by 2050 and socio-economic benefits across all member states. In particular coal regions represent a tremendous opportunity for further solar growth and for the deployment of cutting-edge manufacturing sites that support industrial conversion.
Finally, with a major share in Europe’s 2050 electricity mix, solar energy will play a key role for the continent’s economies. In order to guarantee security of energy and technology supply, the EU should also be able to access PV products along the value chain manufactured domestically, and not only rely on PV products developed and manufactured outside of Europe.
Now is the right time to support the growth of a robust solar industry in Europe and develop a business environment that can provide EU solar companies with the means to compete at a global level. In line with the approach developed by the Strategic Forum for Important Projects of Common European Interest (IPCEI), the new European Commission must establish the European solar industry as a strategic value chain for Europe.
So, what are the key challenges and opportunities ahead?
- EU and its member states lack an industrial strategy for solar: The European solar industry faces increasing global competition, while it misses a clear commitment from European policymakers. Solar has not been identified as a strategic value chain whereas it will play a critical role in powering European industries and businesses.
- Single-sided focus on deploying renewables to achieve carbon neutrality at lowest possible costs by 2050 without ensuring a robust European industrial base at the same time.
- Keeping and further advancing solar technological and industrial know-how in Europe.
- Insufficient public and private finance to support investment in innovative technologies and industrial upscaling.
- Achieving the European objective of climate neutrality before 2050 and ensuring Europe’s energy and technology security of supply.
- Harvesting the benefits of a unique R&D ecosystem, which has developed world leading solar technology innovations that could be industrialised in Europe.
- Big market prospects for solar in Europe open a chance for existing and new European PV manufacturers to re-establish a complete solar value chain and scale-up their production and become globally competitive.
- Accompanying the exit-strategy from fossil energy sources in carbon intensive regions by creating new job and industrial opportunities in the renewable sector.
- Opportunity to brand the European solar industry as a sustainability leader at the global level.
 Bloomberg NEF (2018): New Energy Outlook
 Lappeenranta University of Technology (2018): Global Energy System based on 100% Renewable Energy
Photo: © SMA Solar Technologies
For further trends in solar, download the EU Market Outlook for Solar Power 2019-2023.