Europe’s emerging PV markets



Hungary’s FIT law was passed in 2007, with tariffs differentiated by plant size, time of licensing, time zones (three per day), and energy technology. For PV specifically, FIT installations started to take off in the 2012-13 period, when solar costs started to drop significantly.

Hungary’s PV sector had its biggest surprise in 2018, when the country added about 410 MW of PV capacity. Of this, around 320 MW was added through the FIT scheme (KAT) and another 90 MW came from net energy metered systems. Of the total installed capacity, 267 MW of the FIT installations in 2018 comprised systems up to 500 KW each and only 53 MW were larger parks.

This year is also expected to be strong for the market, although the coronavirus pandemic in Europe might slow down the rate of installations. Nevertheless, local PV associations expect the country to add approximately 400 MW to 600 MW of annual PV capacity.

The country’s FIT will continue to be the primary driving force for new installations. Despite the phase-out of the FIT policy in December 2016, the scheme had attracted 2 GW of applications by then and construction deadlines have been extended to 2021. But eventually new systems larger than 500 KW will have to be allocated through competitive tenders, in accordance with the European Union policy mandate, to increase market competitiveness and lower tariff prices. Such a tender was held for the first time in Hungary in October and the country’s energy regulator said that all the winning projects, totaling 131.4 MW, included photovoltaic systems, with the exception of a 500 KW landfill gas plant based on biomass. The winning projects will receive a 15-year long feed-in premium on top of what they will earn in the electricity market.

In more detail, Hungary’s renewable energy tender procured 42.8 MW of PV systems ranging between 300 kW to 1 MW and another 88.6 MW of PV capacity for systems between 1 MW to 20 MW. Thus, the country will gradually start seeing a wave of larger PV parks than it has already experienced. But while Hungary is set to add installations remunerated by both FITs and premium tariffs in 2020 and 2021, new PV will only be able to claim premium tariffs via competitive auctions from 2022 onwards.

Huawei has been providing inverters for all sizes of plants. For example, its inverters have supported PV systems in schools and hospitals, but also larger installations.

Some of Hungary’s biggest solar PV parks belong to state-owned electric utility MVM. In 2017, MVM launched the first phase of its renewable energy program, which included two 20 MW solar farms in Felsozsolca and Paks, respectively, and an additional 108 small PV plants scattered around Hungary, each with 0.5 MW of capacity. All of these systems have been supported by Hungary’s FIT scheme. The two large farms have been operational since 2018, while 91 of the 108 smaller parks were connected to the grid in late 2019. The other 17 projects will go online in the middle of this year.

And the forward-looking trajectory for the utility’s adoption of solar remains bright. Gyorgy Edelman, project manager at the renewable energy arm of MVM, told pv magazine that in the near future, the company aims to double its current solar PV capacity, which currently stands at about 120 MW.

“We are a state-owned enterprise, so our task is to support the Hungarian state’s energy policy, which aims to achieve a share of renewables in electricity generation of 13% until the end of 2020,” said Edelman. “Considering the country’s conditions, solar power is the most expedient of renewable energy production options. Currently, this technology can be deployed and operated cost-effectively.”

Private-sector investors have also rushed to invest in solar PV. MET, a major gas market player in Hungary and Europe, is such an example. The company owns the 21 MW Szazhalombatta solar project, which includes two systems – the Zagyter and Tehag PV Power Plants – installed near each other on the same high-voltage grid connection. The Szazhalombatta project, commissioned in August 2018, is also supported by the country’s FIT policy.

Like MVM, MET also plans to expand its development of PV systems. Daniel Pintacsi, project manager at MET, said new solar is helping the firm “to create a diversified energy portfolio, in which renewables play a key role.” MET has several PV plants under different stages of development, with a 42.7 MW project comprising a cluster of four PV plants currently under construction in Kaba.

Tech-giant Huawei has its eyes on the market, and is working in partnership with both public and private developers in the deployment of large-scale Hungarian PV projects. It supplied the inverters for 100 MW worth of capacity for MVM’s Zold Generacio project – the largest state-owned installation. It has also deployed its inverters in collaboration with MET for their 21 MW project. The inverter manufacturer is optimistic about Hungary’s PV future, with an additional 170 MW of capacity currently scheduled to be built with their products through 2025.

Pintacsi noted that Hungary was one of the last countries in Europe to end its FIT remuneration policy. Therefore, the country has experienced a rather belated rush of solar PV investment and “most of the PV power plants which are currently under construction are still qualified for getting this FIT-type of subsidy.” Moving to a premium tariff scheme based on competitive tenders means lower levels of expected returns, but “the market is also now much more developed, which means lower risk for the investors,” concluded Pintacsi.


“We have been there and our journey from FITs to premium tariffs has been successful,” Greece could tell Hungary.

In fact, Greece legislated its first FITs in 1994, although the PV market only took off after 2006 and began deploying high-penetration volumes of PV starting in 2010. Following miscalculations of the FITs and a huge economic crisis, the Greek PV market dwindled off, only to restart again in 2016 via a new policy scheme. It now requires competitive auctions and awards successful projects with premium tariffs. The winning projects need to participate in the electricity market and their earnings are topped up by premium tariffs for a period of 25 years.

To date, Greece has run seven tenders, starting with a pilot auction in 2016 that awarded 40 MW of PV capacity. Following the pilot tender, it started a regular program of renewable energy auctions that include separate pots for solar PV and wind power technologies, as well as joint solar and wind auctions, where both technologies compete with each other in the same pot. Overall, Greece’s tenders have awarded a total of 1.137 GW of solar PV capacity. The country is also running a net metering scheme for small-scale residential and commercial PV projects, adding a much slimmer volume of capacity, of about 10 MW of PV each year.

More vitally, Greece’s new national energy plan, published in December 2019, mandates 7.7 GW of cumulative solar PV capacity by 2030, up from approximately 2.8 GW of installed capacity at present. Greece’s state-owned utility (PPC) also also has plans to build 3 GW of new solar PV in the country’s mining regions. In April’s auction, PPC won a contract to develop the first slice of this investment – a 200 MW solar farm in Ptolemaida – at a €0.04911/kWh premium tariff, which is the lowest tariff ever awarded for a renewable energy project in Greece. The 3 GW project aims to support the country’s pledge to phase coal out of its electricity system by 2028.

Greece’s engagement with a tender regime in recent years has created a significant secondary market, with many projects changing hands either before or after installation. Greece’s Metka-EGN, for example, sold a group of PV parks totaling 47 MW to Motor Oil SA earlier this year. The parks are supported by the premium tariff regime and also use Huawei’s inverters.

“For our first Greek projects we have chosen Huawei technology, as its inverters are robust, performing properly under the high temperatures that are usual in Greece, while their advanced product features, including but not limited to the multiple MPPTs, the powerline communication and the string level monitoring accuracy,” said Nikos Papaoikonomou, Metka-EGN’s EPC director. “And their easy serviceability do maximize the energy yield and reduce operating costs.”

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