The PV market in the European Union (EU) has experienced remarkable growth, driven by the urgent need to transition to renewable energy and enhance energy security. Solar energy has emerged as a cornerstone of EU’s strategy to achieve its climate goals and reduce dependence on fossil fuel imports. These efforts have been supported by policy measures, including financial incentives and revised renewable energy targets from EU member states, making solar PV deployment a key priority across the continent.
In 2024, the EU set a new growth benchmark for PV installations, fueled by rising energy demand and increased investments in renewable infrastructure. Ambitious climate targets and supportive frameworks, such as national energy plans and EU-led incentives, have accelerated adoption. However, this growth has also introduced challenges, including evolving trade dynamics, and pricing pressures, which will shape the market through 2025.
As the EU solar market evolves, trends in module shipments, inventory levels, and pricing are expected to influence its trajectory significantly. These factors underscore the delicate balance between fostering market expansion and addressing operational challenges, making 2024-2025 a critical period for the sector’s development.
Trends in EU PV Installations (2024-2025)
The EU PV market demonstrated steady yet modest growth in 2024, with an estimated 64 to 65 GWdc of new PV capacity installed – a slight increase of ~5% compared to the 61.9 GWdc installed in 2023, according to EUPD Research calculations. This subdued growth followed the significant surge in 2023, where installations rose by 50% year-on-year due to the energy crisis sparked by the Russia-Ukraine conflict.
In 2024, declining energy prices and a return to relative stability in energy markets reduced the urgency that had previously driven rapid expansion. While policy-driven initiatives and supportive frameworks remained in place, they were insufficient to replicate the extraordinary growth seen in the previous year. Among the major markets, France, Germany, and Italy achieved continued expansion of PV capacity, whereas the Netherlands, Spain, and Poland experienced contractions compared to their 2023 installation figures.
Despite its resilience, the 2024 PV market faced several bottlenecks that constrained growth. Key challenges included grid capacity limitations, permitting delays, and fluctuating consumer demand driven by declining energy prices and high inflation. Disruptions in the procurement of PV components further impacted the rooftop solar segment, restricting growth and complicating inventory management for installers. According to EUPD Research's PV InstallerMonitor© 2023/2024, 22% of surveyed German installers reported significant shipment delays. To mitigate these challenges, installers across Europe allocated a larger share of PV modules for stock purposes, with an average of 23% purchased for inventory. This approach, while addressing supply chain uncertainties, also exposed companies to risks like inventory devaluation, with potential financial implications.
Looking ahead to 2025, EUPD Research forecasts a return to double digit growth, with PV installations expected to rise by approximately 10% compared to 2024. Policy adjustments, investments in grid infrastructure, and streamlined permitting processes are anticipated to address existing challenges and create a more stable trajectory for the EU PV market.
Source: EUPD Research, Global Energy Transition Matrix
PV Module Shipments from China to the EU
During January-October 2024, EU countries imported approximately 83 GW of PV modules from China, with total imports expected to be around 100 GW by the end of the year. These figures mostly align with 2023 levels, underscoring EU’s continued reliance on Chinese-manufactured modules. Chinese manufacturers have leveraged their economies of scale and cost advantages to maintain their dominant position in the EU market.
While an oversupply situation was noted in late 2023 and early 2024, the market dynamics have since shifted. Inventory levels have normalized as demand caught up with the influx of imports, aided by a stable pace of installations projected at around 65 GWdc for 2024.
Importantly, the excess capacity beyond installed volumes should not be considered an oversupply. A safe inventory level, accounting for 25-30% of the annual installed capacity, is typically maintained to buffer against supply chain disruptions. Therefore, the inventory levels this year can be considered safe, as the oversupply situation observed in 2023 was primarily due to the backlog of demand from 2022, which was exacerbated by the disruptions of the post-COVID period. This stabilization has provided some relief to distributors and warehouse operators, although price competition remains intense.
Looking ahead, several factors could influence the flow of Chinese PV modules to the EU. Shifts in the U.S. trade policies following the 2024 elections could alter global supply chains, potentially redirecting Chinese exports. Additionally, rising raw material costs and Chinese government policies aimed at stabilizing domestic markets might constrain production or exports, potentially leading to a more balanced global supply-demand dynamic.
Moreover, a significant portion of the Chinese module production is also being absorbed domestically. China installed an impressive 234 GWdc of PV capacity in 2023 and is expected to install around 257 GWdc in 2024. This robust domestic demand helps balance export volumes, potentially easing the impact of fluctuating international markets.
Price Trends and Falling Costs
Aggressive pricing strategies by the Chinese manufacturers have driven solar module prices to record lows in 2024. While these falling prices have greatly benefitted project developers and end-users by reducing installation costs, they have imposed significant pressures on suppliers, raising concerns about the long-term sustainability of the industry. According to installers’ procurement data from EUPD's Price and Inventory Tracker, the average price of high-efficiency crystalline modules in Q4 2024 dropped sharply to approximately €0.20/W, representing a significant 31.8% decrease from €0.30/W in Q4 2023. Similarly, standard crystalline modules experienced a notable price reduction, falling from €0.25/W in Q4 2023 to €0.22/W in Q4 2024, a decline of 13.7%.
This rapid erosion of prices has reshaped global market dynamics, intensified competition and created financial difficulties for manufacturers across the supply chain. Also, in Germany we observed a significant shift in market share of modules throughout this year: share of standard modules decreased from 79% to 26%, while high-efficiency modules share surged from 17% to 74%.
In response to these significant shifts – marked by falling prices, evolving technology segments, and changing market shares – EUPD has enhanced its premium Price and Inventory Tracker. The upgraded tool offers a more nuanced analysis, delving deeper into advanced technologies such as mono PERC, TOPCon, HJT, and XBC. Additionally, it provides detailed pricing insights across categories and incorporates brand clustering.
European companies, in particular, have been severely impacted by pricing developments. Unable to compete with the low-cost modules produced by Chinese manufacturers, many European firms have been forced to shut down their operations. Chinese manufacturers, buoyed by massive production capacities and government subsidies, continue to dominate the market. For European manufacturers, these conditions have made profitability increasingly elusive.
Solarwatt, a prominent European manufacturer, closed its 300 MW module production facility in August 2024, while Meyer Burger Technology ceased solar module manufacturing in Germany altogether. Even Chinese manufacturers have felt the strain: smaller firms have faced bankruptcy as they struggle to compete in a vicious price war.
JinkoSolar, a leading Chinese manufacturer, reported a 23% year-on-year decline in revenue and a 37.1% drop in profits in its latest quarterly earnings report. Longi Green Technology, Tongwei, Trina Solar, and JA Solar have all posted losses, with some reporting consecutive quarterly declines. According to EUPD’s European Sustainability & Brand Value Rating’s financial performance analysis, nearly all PV manufacturing giants experienced financial distress between Q1-Q3 of 2024.
This ongoing price war has driven module prices so low that many manufacturers are selling below production costs, exacerbating financial losses. In a bid to address these unsustainable market conditions, Chinese regulators and industry associations, including the China Photovoltaic Industry Association (CPIA), have proposed measures like setting a floor price. This would establish a minimum price threshold for modules, aiming to prevent further undercutting and restore stability to the sector.
Additionally, according to some reports, more than 30 leading solar companies in China signed up to a program of self-discipline at the CPIA’s annual meeting in December 2024. Modeled after the Organization of Petroleum Exporting Countries' (OPEC) management of oil supply, this agreement assigns production quotas to participating firms. Quotas are based on market share, capacity, and expected demand, aiming to stabilize the sector amidst overcapacity and slowing global demand.
Module prices are expected to rise slightly in 2025 due to key changes in Chinese production and export policies. In November 2024, the Chinese government reduced the export tax rebate on solar products from 13% to 9%, aiming to stabilize domestic markets and address the oversupply that has eroded profit margins. Rising raw material costs, particularly for polysilicon, are also likely to contribute to upward price pressures.
For European markets, the slight price increase could provide opportunities for local manufacturers to regain competitiveness, especially as political and industry momentum builds for local production. Some manufacturers have already announced their plans to start PV manufacturing in Europe. For instance, Carbon has announced plans to establish a Gigafactory with an annual production capacity of 5 GW for cells and 3.5 GW for modules in France by 2026/2027.
Conclusion: Scenarios and Strategic Considerations for Stakeholders
The EU solar PV market in 2024-2025 stands at a pivotal moment, influenced by policy-driven growth, persistent pricing pressures, and shifting global supply dynamics. While growth is expected to continue, its trajectory depends heavily on how effectively challenges such as grid bottlenecks, permitting delays, and supply chain uncertainties are addressed. The outlook for the market can be framed through three potential scenarios.
In an optimistic scenario, robust policy implementation and coordinated efforts to modernize grid infrastructure and streamline permitting processes could spur significant growth, with PV installations increasing by 10% in 2025 in the EU. Stabilized module prices would enhance profitability across the value chain, fostering increased investor confidence and creating an environment where European manufacturers regain a competitive edge.
In a more moderate scenario, incremental improvements and continued reliance on imports may result in steady but unspectacular growth. While module prices remain under pressure, lower installation costs would favor consumers and developers. However, a constrained development scenario could emerge if external factors like raw material shortages or restrictive trade policies exacerbate existing supply chain issues, leading to stagnation in installations and higher costs.
To navigate this critical period, stakeholders must adopt strategic approaches. Suppliers and manufacturers, especially those operating in Europe, need to counter oversupply and pricing pressures by enhancing operational efficiencies, forging partnerships, and differentiating their products with high-efficiency technologies and sustainability certifications.
For policymakers, the focus must remain on grid modernization and reducing administrative delays in permitting, while also supporting local manufacturing with targeted incentives and public-private partnerships. Engaging in international diplomacy to stabilize global supply chains and promote fair competition is equally critical.
The years 2024-2025 represent a transformative period for the EU PV market, offering both challenges and opportunities. Strategic alignment among suppliers, manufacturers, and policymakers will be key to turning obstacles into catalysts for long-term growth and ensuring EU’s continued leadership in the global renewable energy transition.
About the Authors:
Markus A.W. Hoehner is the Founder, President and Chief Executive Officer of Hoehner Research & Consulting Group and EUPD Research. He has been active in top-level research and consulting, focusing on cleantech, renewable energy, and sustainable management for more than three decades. He can be reached at m.hoehner@eupd-research.com.
Rajan Kalsotra is a Senior Consultant at EUPD Research, bringing over 13 years of experience in the renewable energy sector. His expertise encompasses market research, policy development, and strategic consulting. He has collaborated with leading energy organizations, delivering valuable insights into the global renewable energy landscape, with a particular focus on solar energy, energy storage, and emerging technologies. He can be reached at r.kalsotra@eupd-research.com.
The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.
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