EU Market Outlook For Solar Power / 2019 - 2023 Supported by: FOREWORD Welcome to SolarPower Europe’s first EU Market Outlook. The time has come to look at solar PV in the European Union much more thoroughly. While SolarPower Europe has been publishing a Global Market Outlook for many years, Europe has just been one part of this comprehensive, annual overview of developments in the solar sector worldwide, which have seen solar demand mostly taking place in Asia in recent times. In 2019 that’s different – increasing by more than 100% over the past year, solar growth in the European Union has outpaced most of the leading global solar regions. In addition, more new capacity was installed for solar than any other power generation technology in the EU this year. Our first EU Market Outlook provides details on what we expect to be the prelude of a European solar renaissance for the coming decade and beyond. The main reason for solar’s success in the EU is its low cost. Solar power is often cheaper than any other technology today – this is true for retail electricity and, increasingly, wholesale power as well. And with the steepest cost reduction curve ahead, solar PV’s competitiveness will increase further. Other markets outside the EU also have an opportunity to benefit from solar’s cost advantage. What's changed: Brussels has already done a sizeable part of its homework to prepare for the future new energy world based on solar and its renewable energy peers. The binding national 2020 targets of the first renewable energy directive have led several countries that are still struggling to meet their obligations to finally opt for solar. The 2019 ‘Clean Energy for All Europeans’ legislative package contains many pro-solar provisions that will support the dissemination of PV power until 2030. As the most versatile, easy and quick to install, and often lowest-cost means of expanding the share of renewables, solar is the most popular power generation source among European citizens – and this attractiveness is now increasingly translating into real solar investments. Despite solar’s popularity and its enormous potential, Europe is still very much at the beginning of the solar age. Today, solar power’s total share in EU electricity generation is just about 5%. We can look at this from several perspectives. For example, over 90% of EU rooftops are unused; rooftops which present an opportunity to generate power equal to around one-quarter of the EU’s electricity demand – and that doesn’t include the vast amount of idle space on building façades. Europe also needs to strengthen the solar manufacturing sector as a cornerstone of the European green economy and position solar technology as a major element in the EU’s industrial strategy. To ensure both Europe’s long-term security of supply and industrial leadership in clean energy technologies, it is key to establish solar as a strategic value chain. While solar in the European Union is now on the right path, it will take further efforts to establish sustainable leadership in this clean power technology, especially as Europe now strives to become the world’s first climate- neutral continent by 2050 with the European Green Deal. We have outlined seven policy recommendations on topics that are crucial for solar to thrive in Europe (see p. 5). SolarPower Europe and its members are very much looking forward to working together with EU policy stakeholders to enable solar to deliver its great promise to turn the European Green Deal into reality. Enjoy reading our EU Market Outlook, Thanks to our Sponsor Members: WALBURGA MICHAEL SCHMELA HEMETSBERGER EXECUTIVE ADVISOR CEO SolarPower Europe / EU MARKET OUTLOOK / 3 TABLE OF CONTENTS FOREWORD 3 POLICY RECOMMENDATIONS 5 EXECUTIVE SUMMARY 6 1 EU SOLAR MARKET 7 EU SOLAR MARKET UPDATE 2019 7 EU SOLAR MARKET UPDATE / SEGMENTS 14 EU SOLAR MARKET PROSPECTS 2020 – 2023 15 2 EU SOLAR TRENDS 21 1 Industrial Solar Strategy 22 2 Solar Buildings 24 3 Digital Solar 26 4 Solar Grid Integration 28 5 Sustainable Solar 30 6 Solar Mobility 32 7 Renewable Financing 34 8 Solar Powered Businesses 36 9 Emerging Solar Markets 38 10 Solar to Hydrogen 40 3 TOP 5 EU SOLAR MARKETS 43 1 Spain 44 2 Germany 46 3 The Netherlands 49 4 France 51 5 Poland 54 Project manager & lead author: Michael Schmela, SolarPower Europe. Market intelligence: Raffaele Rossi, Michael Schmela, SolarPower Europe. Internal co-authors: Aurélie Beauvais, Miguel Herrero Cangas, Naomi Chevillard, Máté Heisz, Merce Labordena, Raffaele Rossi,SolarPower Europe. External co-authors: José Donoso & Alejandro Labanda, Unión Española Fotovoltaica (UNEF); Jaap Baarsma, Holland Solar; Samy Engelstein, Syndicat des Énergies Renouvelables (SER); Stanislaw M. Pietruszko, PV POLSKA. External contributors: ANIE Rinnovabili, APESF, APREN, EDORA, Elettricità Futura, ENERPLAN, Estonian PV Association, European Energy, Fortum, HELAPCO, ISEA, MANAP, ODE, PV Austria, RENERGY, Solární Asociace, STA, Svensk Solenergi. Design: Onehemisphere, Sweden. Supported by: Intersolar Europe. Disclaimer: Please note that all historical figures provided in this brochure are valid at the time of publication and will be revised when new and proven figures are available. All 2019 numbers are preliminary and extrapolated based on numbers that were available mostly for the first three quarters of the year. Forecasts for 2020 to 2023 are based on SolarPower Europe’s Global Market Outlook for Solar Power 2019-2023. Please also note that forecast figures have been rounded. SolarPower Europe’s five-year forecast consists of Low, Medium and High Scenarios. The Medium scenario anticipates the most likely development given the current state of play of the market. The Low Scenario forecast is based on the assumption that policymakers halt solar support and other issues arise, including interest rate hikes and severe financial crisis situations. Conversely, the High Scenario forecasts the best optimal case in which policy support, financial conditions and other factors are enhanced. Segmentation is based on the following system size: Residential (<10 kW); Commercial (<250 kW); Industrial (<1000 kW); Utility-scale (>1000 kW, ground-mounted). SolarPower Europe’s methodology includes only grid-connected systems. Installed capacity is always expressed in DC, unless otherwise stated. 4 / SolarPower Europe / EU MARKET OUTLOOK POLICY RECOMMENDATIONS Solar energy is ready to take a key role in delivering the European Green Deal, securing ambition, a just and fair transition, and ensuring Europe’s security of supply. To fully tap into the potential of the seven solar solutions outlined below, the mobilisation of substantial public and private investment will be paramount. The European Green Deal and upcoming legislation on Sustainable Finance will play a critical role in leveraging these funds and guaranteeing that future investments are directed towards solar and other technologies and assets that will support Europe’s carbon neutrality and industrial leadership in clean energy. Delivering solar industrial leadership Solar manufacturing should be strengthened as a cornerstone of the European green economy and has to be a major element in Europe’s Industrial Strategy. The solar sector must be established as a strategic value chain in order to both ensure Europe’s security of supply and deliver industrial leadership in clean energy technologies. Supporting the large- scale industrial deployment of existing innovative, European, renewable technologies will be key. #Solar4Buildings We propose a mandate for solar to be installed on all new and renovated residential, commercial, and industrial buildings in the EU. Currently 90% of European rooftops are unused and fitting this space with solar offers the potential to save up to 7 million tonnes of CO2 each year, producing at least 680 TWh of clean electricity supply. Transitioning former coal regions to solar Coal regions can greatly benefit by transitioning to solar – with huge untapped solar potential, they are attractive business environments for solar deployment and manufacturing. The EU Platform for Coal Regions in Transition must work with the Clean Energy Industrial Forum to foster synergies between solar industrial policy and a just transition. Providing skills and training programmes to support the energy transition It is a priority to adapt the EU Skills Agenda in order to facilitate European solar jobs across key sectors and avoid bottlenecks. With the proper regulatory framework, solar could create at least 500,000 highly skilled jobs by 2030, and 1.7 million by 2050 in Europe alone. Unlocking the potential of flexible large-scale solar installations Solar is a flexible and reliable technology that can provide valuable flexibility services to the grid, more accurately than conventional technologies. The potential of large-scale solar installations to support the transmission grid is largely untapped in Europe, therefore, it is urgent to remove existing barriers to their deployment, such as size caps in public tenders. Accelerating solar-powered mobility Solar is highly versatile and can be directly connected to most charging infrastructure, delivering truly sustainable electric mobility. As solar's highest generation capacity occurs during traditional working hours, it is a particularly attractive option for charging facilities located in public and commercial buildings as well as working spaces. We must ensure that appropriate infrastructure is in place to facilitate the roll-out of solar-powered electric