
Dries Acke (SolarPower Europe): BESS is not just a nice-to-have; it’s a necessary solution for sustainable solar growth
In its annual EU Market Outlook for Solar Power, SolarPower Europe has reported a significant slowdown in the growth of the European solar sector, with the 2024 growth forecast dropping to just 4%, a dramatic decrease from the 53% growth seen in 2023.
Despite the record-breaking installation of 65.5 GW of solar in 2024, down from 62.8 GW in 2023, the report highlights various challenges, including grid constraints, policy uncertainty, and a normalization of electricity prices. This slowdown comes at a critical juncture, as Europe struggles to meet its renewable energy targets for 2030 and achieve energy independence.
To further explore the factors behind this deceleration and its long-term implications for Europe’s solar ambitions, Review Energy spoke exclusively with Dries Acke, Deputy CEO of SolarPower Europe. He provided valuable insights into the current state of the market, the need for continued policy support, the importance of energy storage, and the steps needed to strengthen Europe's solar industry moving forward.
Review Energy (R.E.): The report highlights a sharp deceleration in solar growth, from 41-53% in 2021-2023 to just 4.4% in 2024. What factors do you think contributed the most to this slowdown, and what are the long-term implications for the EU’s solar goals?
Dries Acke (D.A.): We are seeing a slowdown, which we symbolize as the weather turning cloudy after sunny years. This is not to alarm, but we want to grab attention early. The main factors are:
- Electricity Price Normalization: After exceptionally high electricity prices, which had spurred rapid solar growth, we are now seeing a reduction in energy prices. This impacts the short-term returns for solar investments, especially rooftop installations, where the return on investment has shifted from a few years to a longer-term horizon of around 10 years.
- Decreased Energy Awareness: The intense political and media focus on the energy crisis has faded, reducing the urgency and awareness around energy savings and solar investments.
- Policy Uncertainty: Policy changes, such as shifts in net metering or subsidy systems, have created confusion and uncertainty for both consumers and businesses in countries like the Netherlands, France, and Poland, causing delays in decisions.
In the utility-scale sector, the slowdown is also linked to grid constraints and the growing difficulty in absorbing solar energy. Curtailments and negative prices are rising, which signals the need for more flexibility in the grid, particularly through battery energy storage systems (BESS). The long-term implication for the EU’s solar goals is clear: without continued policy support, solar will not meet the 2030 targets.
R.E.: Despite record-breaking installations, capital investments fell by 13% in 2024. How do you interpret this decline in investment, and what strategies are needed to attract more funding for solar projects moving forward?
D.A.: This decline can be partly explained by the drop in system costs. Solar components like modules and inverters have become cheaper, which means more capacity can be installed for the same amount of money. This results in less capital being needed for the same or greater output.
However, despite these cost reductions, margins are tight across the supply chain, from manufacturers to distributors. The solar sector remains an attractive market, but its riskiness and the uncertainty around policy and market conditions are holding back investment. To attract more funding, we need to restore policy certainty, especially in the rooftop market, which could drive investments back up in 2025.
R.E.: The importance of energy storage (BESS) with solar – how critical is this combination moving forward?
D.A.: The combination of solar and battery storage is crucial for addressing grid constraints and negative price phenomena. BESS will help stabilize the grid by storing excess solar energy and ensuring its availability when the sun isn’t shining.
The key challenge is to ensure that the technology scales quickly enough and that the necessary regulatory and financial frameworks are in place to incentivize the development of both solar and storage. BESS is not just a nice-to-have; it’s a necessary solution to ensure solar can continue to grow sustainably.
R.E.: The EU is heavily reliant on China for solar supply chains. What steps can be taken to strengthen European solar manufacturing, especially for modules and inverters, and how can policies like the Net Zero Industry Act help?
D.A.:The reliance on China is problematic for both supply chain risks and geopolitical reasons. The EU needs to diversify and secure its supply chains for both modules and inverters.
The Net Zero Industry Act is key to this shift. It creates a framework that can help offset the premium price of European-made solar components by supporting public procurement and auction systems. This helps make European production more competitive.
For modules, there’s a clear need for diversification. We are at risk if we remain dependent on just one or two countries. Inverters, however, present a different case. Europe already has a strong industry in this area, and given their role in the energy system—acting as both hardware and software—it's critical to maintain and grow this sector for cybersecurity reasons, as well as energy system resilience.
R.E.: Greece and Portugal are now in the top 10 for solar installations. What can we learn from their experiences and the broader top 10 countries?
D.A.: Greece is a great example. The country has been successful because of its clear, high-quality energy policy planning over many years. Greece’s transition from coal to renewables like wind and solar has attracted investor confidence. The government has also dedicated efforts to integrating energy storage, which has been crucial for continued growth.
Portugal, traditionally strong in renewables, benefits from having a large utility sector that has been a leader in progressive renewables. Both countries provide valuable lessons in having clear, long-term policies and frameworks that make them attractive to investors.
R.E.: With increasing grid constraints and policy challenges slowing growth, what are the most urgent regulatory reforms needed to ensure the continued expansion of solar PV in Europe?
D.A.: We are facing urgent challenges related to grid capacity and policy fragmentation. The EU needs to focus on implementing existing rules rather than creating new ones. The Clean Energy Package, for example, called for grid hosting maps and the development of time-of-use tariffs, but many member states have not yet implemented these policies.
To move forward, we need the European Commission to ensure member states follow through with their commitments. We also need to ensure that battery storage is no longer double-taxed and that it can be deployed more efficiently. Ensuring policy coherence and timely implementation is key to making real progress.
R.E.: How would you describe 2024 for the European solar industry in one sentence, and what would you like to see accomplished by 2025?
D.A.: 2024 can be described as a year where the weather is turning cloudy—solar growth is still ongoing but not at the pace we had hoped.
For 2025, I would focus on electrification as the next critical step for the energy transition. Industrial electrification needs to be at the heart of the European energy strategy to ensure competitiveness. This will enable structurally low industrial prices, which are only achievable through renewables and electrification. By 2025, we need to see these strategies firmly in place, especially as global competitors like the U.S. and China are advancing quickly.
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