Europe’s solar market has contracted by around 18% in 2016, with installations in the third quarter (Q3) falling 10% on last year’s figure, says a new report by European solar trade body SolarPower Europe.
The organization’s Third Quarter 2016 PV market update shows that in the months from June to September, only 1.56 GW of solar PV capacity was added in Europe. This is 10% below the same period in 2015, when 1.73 GW was added.
Extrapolated across the first nine months of the year, the decline is even steeper: the data shows that 5.3 GW of new solar capacity was installed to the end of September, which is 18% below the 6.5 GW added during the same period last year.
This shortfall can most easily be explained by the puncturing in 2016 of the U.K.’s solar bubble, which had led Europe in terms of new installations for more than 18 months prior to April this year.
The savage cuts to the U.K. FIT for smaller installations, as well as the early closure of its ROC scheme for large scale, severely diminished British solar output: in 2015, the first nine months of the year saw the U.K. market grow by 4.1 GW. This year, that figure was a mere 1.5 GW, and the bulk of that was added before March 31 ahead of the subsidy cuts.
However, the U.K.’s boom-and-bust cycle – which follows the well-trodden path taken by the markets of Italy, Spain, Czech Republic and Germany – stands alone, with most of Europe either modestly growing, flat or – in the case of Turkey – difficult to predict due to the political situation.
SolarPower Europe forecasts Q4 to be similar to last year, which if accurate would see Europe end 2016 with around 7.1 GW of new capacity added. This is 17% below 2015’s continent-wide total of 8.6 GW. In its medium scenario outlined in SolarPower Europe’s 5-year Global Market Outlook 2016-2020 released at Intersolar Munich in June, the organization forecast 2016 to reach 7.3 GW of new solar capacity.
SolarPower Europe’s head of market intelligence Michael Schmela stressed that it is concerning that the European solar market is slowing down, especially in light of the Paris Agreement and the fact that solar power has never been cheaper.
“While Europe has recently done little to profit from cheap solar energy, the U.S. market celebrates its best solar quarter ever, installing 4.1 GW in Q3 alone, and anticipating a 14.1 GW size for the full year, up 8(% from 2015,” said Schmela. “China might even install around 30 GW of new solar power capacity in 2016, which would be more than what Europe has installed in the last three years put together.”
To buck this trend, SolarPower Europe CEO James Watson added that proposals currently on the table to support solar growth are maintained, while improvements are needed to enable greater support of low-carbon technology across Europe.
“It is of utmost importance for the European solar sector that the legislative proposals supporting active power consumers and self-consumption in the European Commission’s ‘Clean Energy for All Europeans’ package are maintained,” said Watson.
“We need improvements on several other topics: first, the proposed 27% renewables target is too low. SolarPower Europe calls for a 35% target, which would better suit the ambitions of COP21. Second, we need to keep priority dispatch and access for renewables in a generation scheme still dominated by inflexible power sources. Finally, the proposed approach to capacity mechanisms needs to be improved if we are to eliminate power generation overcapacities in Europe.”
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