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European Solar PV Demand Stabilizes at 10 GW in 2014

  • Author:John
  • Release on :2014-06-12

European PV demand could decline tojust 22% of global demand in 2014

Santa Clara, Calif., May 28, 2014—Solarphotovoltaic (PV) demand from Europe is forecast to reach 10 gigawatts (GW)during 2014, down 7% Y/Y, according to the NPD Solarbuzz European PV MarketsQuarterly report. This will be the third consecutive year thatEuropean solar PV demand has declined, after reaching a peak of 19.2 GW in2011. During this period, Europe’scontribution to global PV demand has fallen rapidly from 70% in 2011 to just22% in 2014.

Germany,Italy, and Greece had 71% of European demand in 2012, but these countries arenow just 37% of the European market. “Thedecline in PV demand from Europe in 2014 is due mainly to the effects of majorfunding reductions in Germany, Italy, Greece, and Romania” said Susanne von Aichberger, analyst at NPD Solarbuzz. “In fact, for Europe to reach 10 gigawattsof demand in 2014, the United Kingdom would need to meet expectations ofdoubling in size.”

DuringQ1’14, European PV demand was up 10% Q/Q,but down 8% Y/Y. “Historically, the first quarter hasbeen a weak period in Europe, but planned reductions in the UK’s incentive rates in April 2014 boostedfinal Q1 figures,” Aichberger said.

TheUK had 43% of European demand in Q1’14,its highest quarterly share yet; however, in the past few weeks, the UK markethas been struck by new policy uncertainty that is likely to have an immediateeffect on demand from the UK and Europe. “2014 PV demand is expected to grow in France, theNetherlands, Austria, Portugal, and Switzerland, and Turkey is forecast tobecome a significant PV market this year,” noted von Aichberger. “Belgium, Denmark, Romania, and Ukraine are forecast toexperience annual declines.”

Figure: European Solar PV Demand from 2009 to 2014

        Source: European PV MarketsQuarterly

During2014, Europe’s most mature PV markets (Germany,Italy, and France) will transition away from feed-in-tariff (FIT) incentives,which were widely adopted within Europe to stimulate initial PV marketadoption. The new driver for PV growth in Europe is coming directly from theenergy markets in each country, where PV is now competing with other forms oftraditional and renewable energies. This increased competition is creating newPV opportunities, but requires overcoming regulatory and funding challenges.

“Within Europe’s established PV countries, policy makers in Italy have takenthe most radical steps to transition away from FITs. The Conto Energia fundingscheme was discontinued in July 2013, with the final projects completed in May2014,” added von Aichberger, “In the future, demand will be driven byinstallations based on net-metering, power purchase agreements (PPAs), directmarketing, and tax benefits.”