New analysis reveals that EU solar stalls, 2025 projected to mark first year of market decline in a decade

SolarPower Europe's new mid-year market analysis for EU solar forecasts -1.4% annual growth for 2025. This would mark the first year of negative market growth since 2015, putting the continent’s 2030 targets at risk.

Despite forecasted negative growth, years of solar boom mean that the EU will meet the RePower EU 2025 solar target of 400 GW* – by the end of the year the bloc should host 402 GW.

The downturn is particularly linked to a declining residential rooftop segment, as the energy crisis and related support schemes wane in key markets like Austria, Belgium, Czechia, Hungary, Italy, and the Netherlands.

The wavering corporate Power Purchasing Agreement (cPPA) market also contributes to the reduced solar market expectations, with 2025 bringing a 41% drop between deals signed between Q1 and Q2.

The utility-scale solar market remains relatively resilient, driven by auctions across Europe that incentivise flexible solar projects that are combined with storage or wind.

BRUSSELS, Belgium (Thursday 24th July 2025): The EU is set to install less new solar in 2025 than it did last year – the first annual drop in a decade.

EU Market Outlook for Solar Power: 2025 Mid-Year Analysis

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The new mid-year solar PV EU market analysis from SolarPower Europe reveals that for 2025, the annual market is expected to contract for the first time since 2015, with a projected -1.4% growth in the most likely scenario. This follows the exceptional annual market expansions in 2022 (+ 47%) and 2023 (+51%), and flattened growth in 2024 (+3.3%).

In 2025, on current predictions, the EU is set to install 64.2 GW, a decrease from 65.1 GW in 2024. The new installations do help to deliver the European Commission’s 2025 solar target of 400 GW – by the end of the year the bloc should host 402 GW.

In order to meet the 2030 target, and deliver the continent’s decarbonisation and competitiveness goals, Europe must install nearly 70 GW per year through the rest of the decade. The current trend suggests that Europe will fall short of its goals, hosting 723 GW of solar PV by 2030, compared to the required 750 GW.

The analysis comes as solar’s performance for Europe hits the headlines. According to Ember, for the first time, solar delivered most of the EU’s monthly electricity in June. The UN reports that renewable energy drives one third of EU economic growth. IRENA tells us that solar is 41% cheaper than the lowest-cost fossil fuel alternatives.

Dries Acke, Deputy CEO of SolarPower Europe (he/him) said, “The number may seem small, but the symbolism is big. Market decline, right when solar is meant to be accelerating, deserves EU leaders’ attention. Europe needs competitive electricity, energy security, and climate solutions. Solar delivers on all of those needs. Now policymakers must deliver the electrification, flexibility and energy storage frameworks that will drive solar success through the rest of the decade.”

The projected downturn of solar installations is driven primarily by a declining rooftop segment, particularly home solar.

In traditionally strong residential rooftop solar markets, like Italy, the Netherlands, Austria, Belgium, Czechia, and Hungary, households are now postponing installations as the impact of the 2022 energy crisis wanes. For most of these markets, the withdrawal of incentive schemes without adequate replacements is resulting in a residential rooftop market collapse of over 60% compared to 2023. Similarly, Poland, Spain, and Germany are experiencing a decline of over 40%.

The new analysis predicts that utility-scale solar is expected to continue growing in the EU this year. In 2025, the segment will likely contribute to around half of all new capacity additions.

Since 2022, improved auction design has helped restore confidence, with 2024 seeing a record 20 GW of utility-scale solar awarded across the EU. Hybrid and co-located storage projects, especially in Germany and Bulgaria, are playing a driving role in boosting auction-deployed solar. Germany leads in solar auctions, followed by the Netherlands, France, and Italy, with Poland and Ireland also scaling up.

Looking ahead, 2025 auction schedules suggest that utility-scale solar capacity is set to grow. Germany’s latest innovation tender drew 158 bids totalling over 2 GW—mostly for hybrid solar-storage. Prices fell to €0.05/kWh, from €0.07/kWh in a similar auction in October, which awarded only 487 MW. Rolling out well-designed auctions which incentivise flexibility and hybridisation (with storage and/or wind), is key to the resilience of utility-scale solar.

While solar auctions strengthen, Corporate Power Purchase Agreements (cPPAs) are wavering. cPPAs have been a key driver of utility-scale solar in recent years, giving developers and companies long-term price certainty. However, in 2025, falling electricity prices have reduced buyers’ incentive to sign long-term deals. New solar PPA signings have dropped by 41% between Q1 and Q2 this year, raising questions over the market’s near-term performance. Improving the framework that supports these contracts will be essential to unlock their full potential.

Notes

* As per industry standard, SolarPower Europe expresses solar capacity in DC units, with a conversion factor of 1 GWAC = 1.25 GWDC. The European Commission expresses its capacity in AC units. The 1 = 1.25 factor was in use by the EU Joint Research Centre at time of publication of the EU Solar Standard which set out the 2025 and 2030 solar targets and until recently, and continues to be used by SolarPower Europe.