Europe’s solar sector to experience record growth in 2023

The solar sector in Europe is expected to continue to grow in 2023, with project viability improving despite inflation-related increases in project costs.

Share:

Gain full professional access to energynews.pro from 4.90$/month.
Designed for decision-makers, with no long-term commitment.

Over 30,000 articles published since 2021.
150 new market analyses every week to decode global energy trends.

Monthly Digital PRO PASS

Immediate Access
4.90$/month*

No commitment – cancel anytime, activation in 2 minutes.

*Special launch offer: 1st month at the indicated price, then 14.90 $/month, no long-term commitment.

Annual Digital PRO Pass

Full Annual Access
99$/year*

To access all of energynews.pro without any limits

*Introductory annual price for year one, automatically renewed at 149.00 $/year from the second year.

According to the industry association SolarPower Europe, 54 GW of new installations are expected. Despite the expected rebound in the discounted cost of energy, the share of solar in the European energy mix is expected to double.

The dawn of the solar age in Europe

Michael Schmela, Director of Market Intelligence at SolarPower Europe, states:

“Perhaps 2022 will be remembered in Europe as the dawn of the solar age.”

He notes the importance of the war in Ukraine and the palliatives needed for Russian gas. He adds that solar energy checks all three boxes of the energy trilemma: sustainability, affordability and security of supply.

Bruno Brunetti, global head of low-carbon power analysis at S&P states:

“Despite short-term uncertainty created by inflation, revenue caps, and market reform, the acceleration of distributed solar power and the resumption of projects are helping to sustain solar growth in Europe. Western Europe will thus continue to lead the solar boom. Solar’s share is expected to double from 8% currently to 20% in 2030.”… “Strong corporate renewable energy procurement targets are supporting the growth of the solar sector, both via APPs and GOs.”

Brunetti expects EU GOs to average 6 euros/MWh by 2023. In addition, S&P analysts are raising their forecast for solar additions from 5 to 6 GW/year over the 2022-2027 period. These additions will contribute to the growth of the solar sector in Europe.

PPA pricing platform Pexapark quoted a 10-year PPA index for European solar at 83.52 euros/MWh on December 20. This is an increase of 29% over previous levels.

However, regional prices may differ considerably, thus affecting the growth of the solar sector in Europe. The Pexapark index for Spain was set at 52.54 euros/MWh while the index for Germany was set at 92.86 euros/MWh.

Rising cost of solar projects linked to inflation

According to S&P, price increases for solar modules are expected to decline as supply chain bottlenecks are resolved and raw material costs fall. As an example, the price of polycrystalline silicon declined in Q4 2022 to 35.48 USD/kg. This represents an 8% decrease compared to Q3.

Another element is affecting the growth of the solar sector in Europe. The average capital expenditure for a solar project is increasing, especially in Germany. This increase is about 30% over the last two years, setting the average at 640,000 USD/MW. For example, photovoltaic modules alone account for 45% of the cost in Germany. However, Germany may lift its support for solar auctions for a variety of reasons, according to S&P.

In addition, S&P expects solar LCOEs to moderate again in 2023 and decline over the longer term. German LCOEs are expected to fall from USD 50/MWh in 2022 to USD 35/MWh in 2023. For comparison, Spanish LCOEs are expected to fall from around USD 40/MWh in 2022 to USD 20/MWh in 2023.

Solar energy back on the map in Europe

At the same time, the increasing dependence on China is becoming a problem for the growth of the solar sector in Europe. Ursula Von Der Leyen, President of the EC, proposes the creation of a raw materials club as a remedy. It provides additional support to counter the U.S. Inflation Reduction Act (IRA). Indeed, this one has similar objectives to Repower Eu.

Read on energynews.pro: ISB funding strengthens REPowerEU

 

According to S&P, strengthening network infrastructure and workforce skills are the most important areas beyond a stable regulatory framework. Moreover, two-thirds of the EU’s 209 GW of installed solar capacity is still on rooftops. This segment, which is growing faster than large-scale projects, will be of increasing importance according to Schmela.

S&P’s Schmela also believes the battery business will become viable in part because of rising electricity bills. S&P calculates that the battery market should reach 9.3 Gwh of capacity by the end of 2022, more than triple the 2020 level. 1 million European homes would then be equipped with batteries. Schmela states:

“A sometimes overlooked technology, batteries have essentially become a standard component of home solar systems in major markets.”

 

The mandatory solar panel requirements that the EU is putting in place will help accelerate the energy transition to photovoltaics. S&P’s Brunetti says that one major uncertainty remains for 2023, however: the planned reform of the EU’s gas and electricity market. The aim of this is to break the link between electricity and gas prices. A large number of models are being debated to define the modalities of solar growth in Europe. However, there is no clear guidance on how or whether to move away from the marginal price model.

 

Three economic institutions based in Ramallah have founded a company named Taqa to develop renewable energy production in the region, with no connection to the Emirati company of the same name.
The solar photovoltaic installers sector will grow by 15 % annually through 2030, driven by residential demand, public incentives and increasing integration into urban projects.
The Norwegian subsidiary has launched the second phase of its projects in Maroua and Guider, bringing total capacity to 64.4 MW of solar and 38.2 MWh of storage with an annual target of 141.5 GWh.
ACWA Power secures the NOOR Midelt 2 and 3 solar-storage project in Morocco, outbidding European and Emirati competitors, with decisive backing from Gotion High-Tech’s storage technology.
QatarEnergy has signed a contract with Samsung C&T to build a solar power plant in Dukhan, set to reach 2,000 MW capacity by 2029, doubling the country’s solar output.
Billion Watts begins construction on its first solar-plus-storage project in Australia, scheduled for 2026, relying on an international consortium and a strategy focused on the volatility of the national electricity market.
Longroad Energy has closed financing and started construction of the 1000 Mile Solar project in Texas, with a capacity of 400 MWdc, supported by Meta and an international banking consortium.
Sunrun completed its fifth securitization deal of 2025, bringing non-recourse debt raised in the third quarter to over $1.5bn.
Odyssey Energy Solutions secures $7.5 million from British International Investment to support access to solar equipment under Nigeria’s DARES programme.
The Cameroonian government launches the extension of two solar plants in the Far North, increasing their combined capacity to 64.4 MWp, with support from international investors.
Statkraft has signed an agreement to sell solar and wind assets in India to Serentica Renewables, marking a strategic refocus on Europe and South America.
Independent power producer UNITe has been selected to develop two solar power plants on municipal land in Avèze and Malauzat, following a call for tenders by the French Energy Regulatory Commission.
Solar and storage accounted for 82% of new U.S. power capacity in early 2025, despite federal measures slowing their expansion.
Statkraft France won a 15.5 MWc solar project in Mourmelon-le-Grand during the latest national tender round, bringing its total awarded capacity to nearly 70 MWc in less than a year.
Solar growth in Central Europe has doubled that of the European Union since 2019, reshaping the energy mix and boosting battery manufacturing in the region.
Canadian energy producer Cordelio Power has completed commissioning of its Winfield solar project, a 150 MW facility backed by a 15-year contract with Microsoft and a $313mn structured financing deal.
Platform Anza surpassed its 2024 volume in just eight months, responding to developers’ urgency to secure projects ahead of regulatory and fiscal changes expected in 2026.
US-based AGCO has signed a ten-year virtual power purchase agreement with BRUC, covering a 100 MW solar project in Spain, to secure part of its European energy consumption.
Canadian developer Innergex has won all six projects of the Grenier des Essences portfolio for a total of 85 MW, strengthening its position in France’s ground-mounted solar sector.
Canadian Solar unveils its new low-carbon solar modules integrating heterojunction cells and thinner wafers, achieving up to 24.4% efficiency and a peak power output of 660 Wp.

Log in to read this article

You'll also have access to a selection of our best content.