The European Union installed 65.5 GW of new solar photovoltaic (PV) capacity in 2024, marking the eighth consecutive year of record-breaking additions, according to SolarPower Europe’s EU Market Outlook for Solar Power 2024-2028 report. However, while capacity reached an all-time high, the annual growth rate plummeted to 4.4%, a stark contrast to the 41-53% growth observed from 2021 to 2023.

This slowdown was expected, as the extraordinary growth of 2022 and 2023 was largely fueled by soaring electricity prices during the energy crisis. According to the report, the current market environment, however, reflects a return to more subdued growth, with several structural challenges weighing on the sector’s future prospects.

SolarPower Europe says that while capacity additions increased slightly in 2024, total investment in the solar sector fell by 13%, dropping from €60 billion in 2023 to €56 billion in 2024. This shift was driven by a sharp 35% decline in European wholesale solar module prices, caused by lower supply chain costs and overcapacity in the market.

These lower costs had mixed effects. On one hand, they reduced capital expenditure (CAPEX) for ground-mounted solar PV systems by 28% and for rooftop PV systems by 2%. On the other hand, the drop in investment highlighted growing market uncertainty, particularly for rooftop solar, which experienced significant setbacks in key EU markets.

The rankings of the top 10 solar markets 

According to the EU Market Outlook for Solar Power 2024-2028 report, only five of the top 10 markets installed more PV capacity than in 2023. This marks a stark contrast to 2023, when all major markets saw growth, and 2022, when only France experienced a decline of 400 MW. In 2024, countries such as Spain, Poland, the Netherlands, Austria, and Hungary saw contractions in their deployment, primarily due to the post-energy price crisis market slowdown, but also because policymakers failed to provide the necessary regulatory stability to maintain an investment-friendly environment.

Among the top markets, only France, Greece, Italy, and Germany managed to add more than 1 GW of capacity, with France leading the way with a 1.5 GW increase, Greece adding 1.3 GW, and Italy and Germany adding 1.1 GW and 1 GW, respectively.

Despite these challenges, the rankings of the top 10 solar markets in the EU showed minimal changes in 2024. Only two new countries entered the top 10: Greece, now ranked 7th, and Portugal, in 10th place, replacing Sweden and Belgium. This shift reflects the ongoing challenges in the sector but also highlights the relative stability of the leading solar markets within the EU.

Rooftop solar declines as utility-scale solar takes the lead

One of the most dramatic shifts in 2024 was the decline of the residential rooftop solar segment. Demand for residential rooftop PV systems dropped sharply by 5 GW, bringing total installations to 12.8 GW — a return to 2022 levels. Countries such as Germany, Austria, Italy, Poland, the Netherlands, Belgium, Sweden, Spain, and Hungary all saw significant declines in residential rooftop installations.

As a result, the market share of residential rooftop solar in the EU fell from 28% in 2023 to just 20% in 2024. In contrast, commercial and industrial rooftop solar saw modest growth, increasing its share from 36% to 39%. However, the biggest winner was the utility-scale solar sector, which captured 42% of the market — up from 36% in 2023 — and claimed its strongest position in five years.

Future growth faces mounting challenges

Despite the challenges, SolarPower Europe’s EU Market Outlook for Solar Power 2024-2028 projects that solar capacity additions will continue to grow, but at a slower pace. For 2025, the EU market is expected to add 70 GW of new capacity, representing a 7% increase. However, growth is forecast to slow to just 3% in 2026, reaching 72.3 GW. By 2027, capacity is projected to hit 76.5 GW, rising to 81.5 GW by 2028.

This projected growth is largely driven by utility-scale projects initiated in 2023-2024, which benefited from record-low module prices. However, beyond these initial gains, developers are expected to face mounting challenges, including limited grid flexibility, regulatory constraints, and market uncertainties.

Meeting the REPowerEU target remains a challenge

According to SolarPower Europe, the EU’s solar sector is still on track to meet the 750 GWDC (600 GWAC) REPowerEU target by 2030. The Medium Scenario projects that total installed solar capacity in the EU will reach 816 GW by the end of the decade, exceeding the European Commission’s target by 9%.

However, this forecast represents a downgrade from previous projections. In mid-2024, SolarPower Europe had forecast total capacity of 890 GW by 2030. The latest revision cuts that estimate to 816 GW, reflecting growing concerns over regulatory hurdles, market instability, and insufficient grid flexibility. Under the Low Scenario, total capacity could reach just 644 GW, significantly missing the REPowerEU target by 14%.

These projections underscore the importance of continued support for the solar industry. SolarPower Europe notes that rooftop solar, in particular, faces an unfavorable incentive framework and a lack of flexibility in the EU electricity system. Without decisive action from policymakers to address these issues, the growth momentum of the sector could weaken further, endangering Europe’s decarbonization goals.

“Solar power delivered for Europe when it was needed most, but it cannot be taken for granted,” warns the EU Market Outlook for Solar Power 2024-2028 report. The document highlights the need for stronger policy support, greater grid capacity, and improvements in market conditions to sustain long-term growth.