Saturation in the European Solar Market

Demand in Europe has saturated to the 10 GW level, as the biggest markets such as Germany and Italy are showing a sharp decline in installations, after huge levels of it done in 2010-2012. Germany has been burdened with high subsidies which is causing a rise in energy prices for industries and consumers. The country has installed 35 GW of solar energy, which is almost 35% of the entire global capacity. This has increased the subsidy bill for the country and the policymakers have sharply cut down the subsidy rates with FITs for most installations below the retail prices.

Italy which too saw a huge boom in solar installations has almost finished giving subsidies, while other markets such as Czech and Spain too remain moribound. UK is the only market showing substantial activity, while others have become subdued. The current solar market is being driven by solar energy competing on its own with other sources of energy. The cheap price of Chinese modules has made solar competitive with other forms of energy in Europe, where prices for electricity remain quite high.

10 GW of demand is not bad but it is a sharp climb down from the 20 GW seen during the heydays.  The center of the global solar industry has permanently shifted to Asia, where large emerging economies such as India and China are powering the new growth in solar installations.