Solar powers ahead
Pressure to meet European Union renewable energy targets is likely to keep demand high even after the region's brisk take-up of the technology
European solar power capacity has already reached some 80 per cent of national projections for the end of the decade, underlining how growth has caught policymakers unawares.
That overachievement is adding impetus to national plans to scale back renewable energy subsidies, making the future solar outlook in Europe unsure.
Analysts have 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 scaling back. Its outlook depends on how fast costs can continue to fall compared with rival low-carbon technologies, as countries try to meet 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 market 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 2020 target.
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 total deployment.
The growth in solar power in Europe has been remarkable, but becomes even more astonishing when viewed against policymakers' expectations just three years ago.
Data from the European Photovoltaic Industry Association shows the EU's 27 member states had installed 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 last year.
Of the 27 member states, 24 had set 2012 solar photovoltaic targets in their action plans. Nineteen have installed more than they expected. In absolute terms, the biggest overachiever has been Italy, which by the end of last year had deployed some 12.4 GW more than it had projected, or the equivalent of an extra three or four nuclear power plants.
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 per cent terms, Denmark was the winning overachiever at 13,000 per cent more than it had projected (394 megawatts installed compared with a planned 3 MW).
Altogether, countries had now installed more than 80 per cent 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 overcompensation of developers through subsidies which policymakers failed to trim in line with falling costs. This is changing 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 photovoltaic 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, compared with plans for some 700 TWh that year, and about half planned generation by the end of the decade.