Europe on course to install just 10 GW of PV in 2014, finds NPD Solarbuzz

Demand for solar PV across Europe will stabilize at just 10 GW this year, according to the latest predictions from analysts NPD Solarbuzz. After topping a record 19.2 GW in 2011, demand across the continent has dropped off markedly and is likely to account for just 22% of global demand this year. In 2011, Europe’s PV market contributed to 70% of all installations.

Within the continent, the balance of power is also shifting. In 2012, the triumvirate of Germany, Greece and Italy accounted for 71% of all European demand for PV. This year, that share is likely to tumble to just 37% as countries such as the U.K. begin to account for the lion’s share of demand.

"The decline in PV demand from Europe in 2014 is due mainly to the effects of major funding reductions in Germany, Italy, Greece and Romania," said NPD Solarbuzz analyst Susanne von Aichberger. "In fact, for Europe to reach 10 GW of demand in 2014, the U.K. would need to meet expectations of doubling in size."

The analyst added that despite demand growing by 10% in the first quarter of this year when compared to Q4 2013, year-on-year there has been an 8% decrease. "Historically, the first quarter has represented a weak period in Europe, but planned reductions in the U.K.’s incentive rates in April 2014 boosted final Q1 figures," Aichberger said.

UK on course for dominant role

According to NPD Solarbuzz, the U.K. accounted for 43% of all PV demand in the first quarter of this year, although recently unveiled plans by the government to remove support scheme incentives for installations above 5 GW have delivered a blow to the nation’s surging solar confidence. Such plans could have an immediate effect on the U.K. market, either positive or negative depending on how investors react to any proposed future funding changes – a rush to beat the deadline or a shift in focus to other markets.

Elsewhere in the continent, France, Switzerland, Austria, Portugal, Turkey and Switzerland are all forecast for significant solar PV gains this year, noted Aichberger, while Denmark, Belgium, Romania and Ukraine are forecast to experience annual declines.

The most mature solar PV markets in Europe – namely Germany, Italy and France – will transition further away from the feed-in tariff (FIT) model this year, believe the analysts, as more bespoke and sustainable support models are adopted within each country. As PV challenges more traditional forms of energy, the market is evolving to meet these new opportunities and overcome regulatory and funding challenges.

"Within Europe’s established PV countries, policy makers in Italy have taken the most radical steps to transition away from FITs," said Aichberger. "The Conto Energia funding scheme [Italy] was discontinued in July 2013, with the final projects completed in May 2014.

"In the future, demand will be driven by installations based on net-metering, power purchase agreements (PPAs), direct marketing, and tax benefits," the analyst concluded.