PV new number 1 power source in Europe

25.07.2025

Source: E & M powernews

The European Union is achieving its solar energy target. Nevertheless, the peak in expansion now seems to have been reached, according to Solarpower Europe.

In June 2025, solar energy became the most important source of electricity in the European Union for the first time. With a share of 22.1 percent of the total electricity mix, it has overtaken coal, gas and wind power. The industry association Solarpower Europe points this out in its report on the expansion figures for the first half of 2025.

The European Union is thus heading towards its self-imposed "RePowerEU" target of achieving a total installed solar capacity of 320,000 MW by the end of the year. "What was once difficult to imagine has rapidly become a reality - proof that solar energy is playing a key role in the decarbonization of European electricity generation," says an analysis by the European Solar Association.

Despite this symbolic milestone, the solar market is currently experiencing its first downturn in many years. After exceptionally high expansion rates of 47% in 2022 and 51% in 2023, expansion stagnated at just 3.3% in 2024. A decline is now forecast for 2025 for the first time in almost a decade - by 1.4% in the medium scenario.

Share of private households in new installations halves

The rooftop sector is particularly affected, especially photovoltaic systems on residential buildings. Households and smaller companies are postponing their investments - triggered by falling electricity prices and weakened support mechanisms. Incentives have been cut or reduced in many member states without creating suitable alternatives. The share of private households in new installations, which was still around 30 percent between 2020 and 2023, is expected to be only around 15 percent in 2025.

In contrast, further expansion is expected for ground-mounted systems. This segment is likely to account for around half of newly installed capacity. Long-term power purchase agreements (cPPAs) in particular will have a stabilizing effect.

Decline in PPAs

However, the first signs of a slowdown can also be seen here: the number of newly signed solar PPAs fell by 60% in the second quarter of 2025 compared to the first. In order to exploit the growth potential, industry players are calling for an improvement in the regulatory framework. At the same time, tenders and award procedures are becoming increasingly important as they further reduce prices through competition.

In the long term, the EU is aiming for an installed solar capacity of 750,000 MW (direct current) by the end of the decade. However, current expansion rates would only reach around 723,000 MW. According to Solarpower Europe, the systemic value of solar power must be increased in order to close this gap. Flexibility in the energy system and storage technologies are key levers here.

In the short term, an accelerated expansion of battery storage is particularly crucial. In the long term, high investments in the grid infrastructure are necessary in order to achieve the European solar and renewable targets for 2030.

Author: Stefan Sagmeister