Following an exceptional 50% growth in 2023, driven by the energy crisis, solar PV installations in the European Union grew by only 5% in 2024, reaching an estimated 64 GWdc. This deceleration was largely due to falling energy prices, which reduced the urgency for new installations, alongside regulatory and grid-related bottlenecks. The question is how these and other issues will affect Europe’s PV market for the rest of this year.

In 2024, major markets such as Germany, France and Italy saw continued expansion, but others, including the Netherlands, Spain and Poland, experienced contractions. Installers also faced difficulties with procurement and inventory management. According to EUPD Research’s survey of European PV installers, the PV InstallerMonitor 2023/2024, 22% of the surveyed German installers reported shipment delays, while 23% of PV module purchases were allocated to stock – an approach intended to hedge against supply disruptions, but one that also carries financial risks.

In addition to these factors, interest rate hikes in several European countries made financing new solar projects more expensive. This affected both residential and commercial installations, as higher costs deterred some consumers from investing in PV systems. Moreover, some subsidy programmes that had previously fuelled market growth were either scaled back or adjusted, reducing their effectiveness in incentivising new installations.

Looking forward, EUPD Research forecasts a return to double-digit growth in 2025, driven by policy refinement, investments in grid modernisation and streamlined permitting. Installations could rise by approximately 10%, provided that structural challenges are addressed effectively.

Looking forward, EUPD Research forecasts a return to double-digit growth in 2025, driven by policy refinement, investments in grid modernisation and streamlined permitting.

Dominance of Chinese imports
A major theme of 2024 was the continued dominance of Chinese PV module imports. During the year, EU countries imported approximately 93 GW of PV modules from China, reflecting a sustained reliance on Chinese production. Despite efforts to enhance local manufacturing, European companies continue to struggle against the cost advantages and scale efficiencies of Chinese suppliers.

China’s solar industry benefits from massive economies of scale, state support and cost efficiencies that allow its manufacturers to offer modules at record-low prices. EUPD’s Price and Inventory Tracker shows that in 4Q2024, high-efficiency crystalline module prices in Europe fell to €0.20/W (–32% year-on-year), while standard modules dropped to €0.22/W (–14%). The price war has intensified competition, straining manufacturers, including some in China.

For European manufacturers, the consequences have been severe. Solarwatt shut down its 300 MW module production facility in August 2024, and Meyer Burger ceased module production in Germany entirely. Even Chinese giants like Jinko Solar and Trina Solar reported declining profits due to razor-thin margins.

Recognising the unsustainable nature of these price cuts, the China Photovoltaic Industry Association (CPIA) proposed interventions, including a floor price for modules and production quotas among top manufacturers. These measures, if implemented, could stabilise prices in 2025, potentially benefitting European firms struggling to compete.

Additionally, European policymakers are increasingly exploring tariffs or other protective measures to support local manufacturing. While these measures remain in the discussion phase, there is growing momentum to introduce incentives for domestic production, similar to the US Inflation Reduction Act, which has boosted American solar manufacturing.

What to expect in 2025
Several factors will shape the European PV market in 2025.

Potential recovery in module prices – the Chinese government reduced export tax rebates on solar products in November 2024, from 13% to 9%, aiming to stabilise domestic markets. Coupled with rising raw material costs, this could drive module prices up slightly, offering a window for European manufacturers to regain competitiveness.

Policy and grid infrastructure developments – EU nations are expected to implement reforms to accelerate permitting and grid expansion, addressing two of the biggest bottlenecks in PV deployment.

Global trade dynamics – US trade policy shifts following the 2024 elections could impact global solar supply chains, possibly affecting Chinese exports and altering price trends.

Last, increasing local production efforts – if European policymakers introduce financial support or protective trade measures, it could help revive local PV manufacturing. Announcements regarding new European gigafactories will be key indicators of this shift.

In an optimistic scenario, these factors could create a more balanced market, with a healthier European manufacturing sector and sustained installation growth. However, if structural issues persist – such as oversupply, regulatory delays and underdeveloped grid infrastructure – 2025 could be another year of mixed progress.

The views and opinions expressed in this article are strictly those of the authors only and are not necessarily given or endorsed by or on behalf of the Energy Institute.

• Further reading: ‘Bridging the skills gap to empower Europe’s solar future’. Europe’s solar PV industry ideally needs a standardised system of training programmes and certification, argues InnoEnergy Skills Institute Director, Oana Penu.
• Patrick Donati, Co-Founder and Managing Director of Italian independent power producer Terrawatt, offers a comparative analysis of the renewable energy landscapes in Italy and the European Union (EU), with plans to improve connectivity between the continent’s power grids.