Europe sees a Solar Renaissance as Grid Parity Drives a Doubling of Growth

Europe is seeing a strong resurgence in solar capacity additions as grid parity has made it economical to install solar energy as compared to other power sources. All major European countries such as Germany, France, Spain, etc. have seen their annual capacities double in the last 12 months driven by the extremely low costs of solar energy being seen these days. A total of 16.7 GW of solar power capacity was installed across Europe which is more than double the 8.2 GW of solar capacity installed last year. Spain was the largest market followed by Germany.

Also, read Solar Self-consumption Becomes A Major Driver Of Demand In Europe

Next year will see further growth in solar capacity additions with total capacity set to cross the 20 GW mark and this rate should sustain over the medium term as well. Europe had seen growth fall off a cliff in 2012 after subsidies drove a massive surge in solar power plants across Spain, Italy, Germany and other countries which gave generous feed-in tariffs. High returns from solar power plants led to a solar boom which ultimately busted in these countries as solar subsidies became unsustainable for most economies.

There are two key factors that are driving the growth of solar power:

1) Reduced cost of solar power which has decreased to very low levels. This means that solar energy is below the grid parity prices in most of Europe where the price of power is generally high.

2) Green energy and RE targets – set by the European Union implying that the countries have to accelerate solar or wind capacity in order to meet the targets. EU is shortly expected to announce net zero emissions by 2050 which means that a lot of investments will have to be made into renewable energy as well as Energy Efficiency. Even by 2030, the EU has a target of 32% of the capacity that should come from renewable energy.

Europe generally has been at the forefront in the fight against climate change but in the last few years, the continent has lost the mantle as investments are being driven by China and India despite their developing status. Even as the rest of the developed world (Russia, Australia, USA, Canada) refuse to do anything significant on climate change, Europe has led the good fight against global warming. It is time that Europe leads the way for other countries to take radical measures to push RE growth.

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