(The author is a Reuters market analyst. The views expressed
are his own.)
By Gerard Wynn
LONDON, June 5 European solar power capacity has
already reached some 80 percent of national projections for the
end of the decade, underlining how growth has caught
That over-achievement is adding impetus to national plans to
scale back renewable energy subsidies, making the future solar
outlook in Europe unsure.
Analysts have already scaled back expectations for the
European solar market, which until this year had underpinned
soaring demand in the global photovoltaic industry.
But it is still a key market for solar panels, led by
Germany, Italy and France.
Solar's popularity, particularly in residential roof-top
installations, has been founded on a combination of rapidly
falling costs and generous subsidies which policymakers are now
Its outlook depends on how fast costs can continue to fall
compared with rival low-carbon technologies, as countries try to
meet binding, national renewable energy targets in 2020.
They are presently slipping behind those wider targets,
meaning that governments will have to continue to pump money
into renewable energy in general and solar can continue to grow
if it steals share from rivals.
Under the European Union's renewable energy directive,
member states have agreed to renewable energy targets by 2020
which are binding under national law.
Under the requirements of the directive, individual
countries had to compile national renewable energy action plans
and submit these by June 2010.
The plans described a trajectory for expected annual growth
from 2010-2020 for each renewable energy technology.
The main electricity technologies are hydropower, onshore
wind, offshore wind, solar, biomass and geothermal power.
Countries can choose which they want to use to meet their total
The action plans are not legally binding, but countries are
required under the directive to explain to the executive
European Commission if they miss fixed, biennial targets for
Chart 1: link.reuters.com/syj68t
The growth in solar power in Europe has been remarkable, but
becomes even more astonishing when viewed against policymakers'
expectations just three years ago. (See Chart 1)
Data from the European Photovoltaic Industry Association
(EPIA) show that the EU's 27 member states had installed some
69.1 gigawatts (GW) as of the end of last year.
That compares with projections under member states' action
plans published in 2010 for some 38 GW by the end of 2012.
Of the 27 member states, 24 had set 2012 solar PV targets in
their action plans.
Nineteen have installed more than they expected.
In absolute terms, the biggest over-achiever has been Italy,
which by end-2012 had deployed some 12.4 GW more than it had
projected, or the equivalent of an extra three or four nuclear
Germany was next with an excess of 8.6 GW, then France (2.8
GW), Belgium (2.2 GW), Britain (1.5 GW), Greece (1 GW) and
Bulgaria (0.8 GW).
In percent terms, Denmark was the winning over-achiever at
13,000 percent more than it had projected (394 megawatts
installed compared with a planned 3 MW).
Altogether, countries have now installed more than 80
percent of their projected solar power in 2020, at 69.1 GW now
compared with 84.8 GW expected by the end of the decade.
The mismatch tells a story of over-compensation of
developers through subsidies which policymakers failed to trim
in line with falling costs.
All is change, however, as EU countries introduce new
charges on solar power generation or rapid cuts in subsidies for
new (but preferably not existing) projects, against a backdrop
of wider public austerity.
Analysts expect the European solar PV market (new annual
installed megawatts) to be less than half the global total for
the first time this year, as manufacturers search for
utility-scale projects in places with huge solar resources such
as India, the Middle East and Chile.
Yet the EU remains by far the largest economic area with
nationally binding renewable energy targets.
EU member states are still running behind in their efforts
to achieve their overall renewable power plans, unlike the
narrower picture on solar power.
EU countries generated some 650 terawatt hours (TWh) of
renewable electricity in 2011, according to BP data (the latest
available), compared with plans for some 700 TWh that year, and
about half planned generation by the end of the decade.
So the fact that countries have exceeded in solar does not
mean that there is no longer space for wild growth.
It only means that, to continue to surpass projections and
grow strongly, solar will have to squeeze out alternatives such
as extremely expensive offshore wind, as it has done so far.
Continued growth of solar power within the confines of fixed
renewable energy targets may pit green technologies against each
other, which can only be good for a more cost-effective sector.
(Editing by Jason Neely)