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Europe to see a Dramatic 37% Decline in Solar Demand in 2013

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Europe Solar Demand Decline

For many years, Europe has been the main driver of growth of the solar industry worldwide. In fact, it is highly doubtful whether the solar panel prices would be as low as they are today without the massive green subsidies given by Germany. Italy and Spain too did their bit sparking solar booms after the initiation of their solar feed in tariff programs. However, the relentless high double digit growth in solar demand is pretty much over, as governments have sharply cut the subsidies. The demand in Europe will decline by 37% to 10.5 GW according to Solarbuzz. This means that Europe will account for only 25-30% of the global solar demand, compared to the 75-80% in the past 5-7 years. The locus of the solar industry has sharply and permanently shifted to countries inĀ Asia like Japan, China and India.

Read more about the German Solar Energy Market here.

However, everything is not all bad for the solar industry in Europe. The demand is expected to bounce back to the 15 GW level in 2014. This is mainly due to the rise in self consumption through measures such as net metering and subsidies to residential installations which use energy storage. Note, subsidies to large ground mounted solar plants has been going down sharply in recent years which is the main reason why solar demand has gone down. But the sharp fall in solar installation prices is making solar electricity competitive with the grid power. This means that people are starting to install solar power in their homes without the use of government subsidies. This has made the Spanish government even impose a tax on self consumption ( a retrograde and a stupid step in my view). However, other countries like Germany are promoting the use of self consumption of solar energy through incentives.

Germany will continue to be the main driver of solar energy demand in 2014 as well. This country has managed to sharply decrease the overall costs of installing solar power panels on homes. It is as low at $2.5/watt compard to the $5/watt in USA. This is because of the absence of red tape and the large scale of solar business in the country. Italy has also seen a dramtic decline in solar demand as the boom in solar energy has tapered off with the government controlling the subsidies due a large increase in spending on green incentives. However, Italy continues to be an attractive country for solar power given the high amount of solar radiation received and the very high cost of electricity.


The Europe solar photovoltaic (PV) market is poised to recover during the fourth quarter of 2013, after an 18-month downturn that redefined the role of Europe within the global solar PV industry. Quarterly PV demand from Europe is now set to stabilize at the 2.5GW level during the first half of 2014, with moderate growth forecast in the second half, according to findings from Solarbuzz. Germany, the UK, Italy, and France are forecast to drive Europe’s solar PV recovery in 2014. These four countries will account for almost 8GW in 2014, which is equivalent to more than 75% of the solar PV capacity that will be installed in Europe during the year. Europe solar PV demand in 2013 is forecast to decline by 37% on year to 10.5GW, which is a four-year low and almost half of the peak demand achieved by Europe back in 2011.

Following four consecutive quarterly declines to the end of first-quarter 2014, Germany will regain its lead ranking within Europe between the second and third quarters of 2014. While the ground-mount segment continues to be affected by low FIT levels, and the 10MW limit imposed on funded projects, most new residential installations are now self-consuming part of the onsite PV produced. The residential segment is also benefiting from recently introduced incentives for PV batteries.

Having dominated global solar PV demand between 2006-2011 at levels between 70-80%, Europe’s redefined role within the industry will decline to between 25-30% from 2014 onwards. “This reset now requires industry participants to implement new strategies to compete effectively within the Europe solar PV market in the future,” according to von Aichberger.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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