2024 European photovoltaic market demand observation and long-term outlook

In recent years, in order to achieve energy security and achieve net zero carbon emission goals, Europe has vigorously developed renewable energy, and photovoltaic has become the main development. According to InfoLink estimates, the global PV module demand in 2024 falls between 470-529 GW, and the European market demand is about 82-93 GW, accounting for 18% of the global market demand, ranking second in the world's PV market.

However, this year, with the gradual decline of traditional energy in Europe, affecting the willingness of people to install distributed projects, in addition to the photovoltaic supply chain, volatile prices, financing costs and subsidy constraints and other factors, resulting in delays in some national projects, and the second quarter began to quietly rise in the European component inventory water level, the market wait-and-see sentiment. Total factors accumulation, InfoLink estimates that the growth rate of European component demand this year will be relatively slow, compared with 84.4GW of component demand in 2023, this year's conservative expected growth rate is afraid of a slight decline of 3%, optimistic situation has the opportunity to grow 10%, difficult to repeat last year's component demand jump growth situation, Long-term demand still depends on government policy planning, and Europe is still discussing favorable policies, subsidies and incentives to keep stimulating the market.

As an important subject to promote the development of the European photovoltaic market, the EU has also affected the European market to a large extent, and has almost become the most important promoter of the development of the European photovoltaic market. Initially, the European Commission launched the European Green Deal in 2019, vowing to achieve net zero carbon emissions by 2050 while achieving the goal of "climate neutrality." In 2022, after the outbreak of the Russia-Ukraine war, the European Commission also launched the "RepowerEU" plan in May of the same year, through four major projects, such as energy conservation, energy supply diversification, accelerating the promotion of renewable energy and expanding investment, to reduce dependence on Russian natural gas energy. Through the EU Recovery and Resilience Facility, Member States are provided with subsidies or low-interest loans to help them develop renewable energy.

Recent EU policies, Under the Net-Zero Industry Act, NZIA), The Critical Raw Material Act and The prohibiting products made with forced labour on the Union Although the detailed specifications are different, they are mainly aimed at improving the EU's net zero technology autonomy or owner manufacturing, while reducing dependence on key technologies and related products from third countries, and China, the largest importer of photovoltaic products in Europe, is bound to be affected. However, although the EU and Member States have pledged to support local photovoltaic manufacturers and help strengthen the competitiveness of local photovoltaic products in the EU through the signing of the European Solar Charter, the measures to subsidise local manufacturing are not clear at this stage, and local capacity is not yet able to match its huge demand. As a result, from the end of last year to the beginning of this year, a number of photovoltaic associations and enterprises have called on the EU and European countries not to implement trade restrictions on Chinese photovoltaic products, so it is estimated that the impact on China's module output volume will be limited in the short term.

In other stimulative policies, the European Union issued the Energy Performance of Buildings Directive (EPBD) in May this year, which stipulates that all new buildings should be net-zero carbon by 2030. By 2050, all existing buildings should have net zero carbon emissions, except for agricultural, religious or historic buildings. In addition, some European countries such as Italy and France also encourage the installation of photovoltaics in road sound walls, parking lot awnings, industrial and commercial building external walls and public buildings, especially in the parking lot awnings installed to show significant growth, is expected to bring positive demand for distributed projects.

However, it should be noted that some European countries due to food security and farmer protests and other factors, gradually limited agricultural photovoltaic projects, coupled with the grid congestion problem in some countries, may affect the development of centralized projects to a certain extent in the short term. In addition, European countries must continue to solve problems such as bureaucracy and cumbersome administrative processes in the approval process, and actively supplement the current technical labor force in the photovoltaic market to accelerate the development of photovoltaic in Europe.

Overall, under the European Union's renewable energy transformation strategy, the European photovoltaic market will continue to flourish, in addition to the EU put forward many stimulus policies, most European countries also put forward corresponding positive measures. Observing the market share of single European countries in 2024, InfoLink calculates that among the component demand, Germany accounts for 19%, followed by Poland, Italy, the Netherlands and Spain with 7-8%, ranking 2 to 5, and the five countries account for about 50% of the overall European market demand. Below is a comprehensive market and policy overview of the top five demand countries in the European region.

In terms of the German market, with the entry of the summer photovoltaic power generation season, the recent collapse of photovoltaic electricity prices, peak power generation and even negative electricity prices, coupled with the slow decline in traditional energy prices, making Germany's photovoltaic installed capacity in the second quarter fell by nearly 10% year-on-year. However, in the first half of this year, Germany has added 7.55GW installed capacity, up 8% from last year's 6.97GW, 58% from this year's new 13GW installed capacity target has been completed, and there is a chance to meet the standard before the end of the year, InfoLink expects German component demand this year to fall in about 16-17.5GW.

In May this year, Germany's "Solarpaket 1" officially hit the road, which is considered to be one of the most important policies to stimulate the future development of photovoltaic in Germany, in addition to providing grid electricity subsidies of 0.015 euros per kWh for industrial and commercial projects; Simplify the installation process of rooftop and balcony PV applications; Increase the limit for centralized projects from 20 MW to 50 MW; As well as encouraging the development of agricultural power projects in accordance with the Federal Nature Protection Act (Bundesnaturschutzgesetz), while promoting the installation of photovoltaic systems in parking lot sunsheds, it is expected to lead to long-term centralized and distributed photovoltaic installations in Germany. Compared with other European countries, Germany's goal of developing renewable energy is more clear, more than 90% of the people also strongly support the development of renewable energy, plus more and more German enterprises to reduce the cost of electricity, have announced the expansion of investment in self-use photovoltaic systems, therefore, it is expected that the future German photovoltaic demand will grow year by year.

Look at Europe's second and third largest single demand markets, Poland and Italy. Although Poland is still burning coal as the main power generation, but in recent years in the development of photovoltaic is also quite significant, 2023 a total of about 4.9GW installed capacity, becoming a significant emerging market for photovoltaic in Europe, is expected to fall in Poland PV demand this year about 6.8-7.9GW. Poland has also recently faced the problem of excessive off-peak photovoltaic power generation, resulting in excessive pressure on the grid. In this regard, Polskie Sieci Elektroenergetyczne (PSE) has announced that it will spend around €117.5 billion by 2040 to optimize Poland's transmission and distribution network, among other measures. Another good news, the Polish government is expected to launch the "My Power Plan (Moj PRD 6.0)" in September this year, as Moj PRD 5.0 for Poland's household installed capacity growth, Moj PRD 6.0 is expected to drive about 16,000 household installed demand, stimulate distributed demand this year and next. With Donald Tusk, who has encouraged the development of renewable energy, taking office as Poland's prime minister at the end of last year, more favorable photovoltaic policies may be introduced in the future to stimulate long-term demand.

In contrast to Italy, last year's "Superbonus" 90% subsidy rate to help Italy's distributed project demand ushered in growth, and with this year's rate reduction to 70%, may affect the willingness of people to install household photovoltaic. In addition, the Italian government also passed a decree in May this year, prohibiting the future installation of ground concentrated photovoltaic in the area designated for agricultural land, which may affect the development of centralized projects to a certain extent, and it is expected that the installed capacity in Italy this year is mainly reflected in industrial and commercial or public construction facilities projects, and the demand is about 6.2-6.6GW. In March this year, the Italian government issued the second round of the National Recovery and Resilience Plan 2 (PNRR 2) to provide subsidies for developers who choose local photovoltaic products. The European Commission also through Italy's "Green New Deal Industrial Plan" to provide local photovoltaic manufacturers with stickers, because Italy's current local capacity has not yet risen, unable to match its demand, so in the short to medium term must still rely on China's exports of photovoltaic modules.

Finally, the market situation of the fourth and fifth largest single demand markets in Europe, the Netherlands and Spain, is briefly described. The Netherlands added about 4.8GW of photovoltaic installed capacity last year, which is one of the fastest growing photovoltaic markets in Europe, but due to land scarcity, the Dutch government is trying to develop photovoltaic systems in bicycle lanes, parking lot awnings, highway sound walls, public buildings and even water installations, and also performs well in household and industrial projects. However, the coalition government led by the Dutch Freedom Party (PVV) reached a coalition agreement in May this year, announcing the expansion of offshore gas exploration and nuclear power generation, and decided to abolish the "net metering scheme" (Salderingsregeling) from 2027, and the future people can not input the electricity generated by household photovoltaic power into the grid to receive a rebate. No other favorable policies have been observed in the near future, and Dutch demand is expected to fall around 5.8-6.5GW this year.

In Spain, since the beginning of 2022, the wholesale price of renewable energy electricity in Spain has continued to fall, affecting the income of power station investors, and with the arrival of this summer, the output of photovoltaic power generation will rise sharply, which may lead to the emergence of negative electricity prices, affecting the income of investors, and further reducing the incentive for the development of photovoltaic field. According to the InfoLink survey, many local development projects in Spain have been delayed, and it is expected that the demand for centralized projects will be difficult to increase this year.

In addition, there is no significant household project stimulus policy in Spain recently, which will affect the demand for distributed projects this year. Overall, the Spanish PV market will show a downturn this year, it is expected that Spanish demand this year is about 5.5-6 GW, whether it can be improved in the future, still depends on its grid congestion, slow administrative processes and technical manpower shortages and other problems can be improved.