Solar market in the EU shrinks for the first time since 2016

16.12.2025

Source: E & M powernews

The EU has achieved its solar expansion target for 2025, but is likely to miss the target for 2030. According to a market analysis by Solar Power Europe, a lack of support is slowing down expansion.

The European Union has achieved its target of 400,000 MW of installed solar capacity by 2025, as set out in the EU Solar Strategy 2022. According to Solar Power Europe, the total installed capacity at the end of 2025 was around 406,000 MW. At the same time, the solar market in the EU declined for the first time since 2016, according to the European solar industry association from Brussels.

According to Solar Power Europe, the member states installed a total of 65,100 MW of new solar PV capacity in 2025. This corresponds to a decline of 0.7% compared to 2024, ending a phase of continuous growth that has continued since 2016. The association expects the slowdown to continue in 2026 and 2027. The market is only likely to return to the level of 2025 towards the end of the decade.

Warning against missing the target

Despite the interim target achieved, the association therefore believes that the EU's long-term expansion target is at risk. The European Union is aiming for an installed solar capacity of 750,000 MW by 2030. However, in the most likely scenario of the market outlook, the association forecasts only 718,000 MW by the end of the decade. This would fall well short of the target. In the low scenario, Solar Power Europe even assumes only 664,000 MW.

The association cites the significant decline in the private rooftop systems segment as a key reason for the market weakness. While this segment still accounted for 28% of newly installed capacity in 2023, its share was only 14% in 2025. According to Solar Power Europe, the expiry of national subsidy programs in particular is having an impact here, although consumers are still faced with high prices for gas and electricity.

Solar parks on the rise

In contrast, the expansion of large solar parks continued to develop positively. Utility-scale systems accounted for more than half of the newly installed capacity in 2025. However, according to the association, this growth was not sufficient to compensate for the slump in the private sector. At the same time, the framework conditions for large projects are also becoming tougher. Solar Power Europe points to increasing grid bottlenecks, curtailments, falling feed-in revenues and unresolved issues regarding flexibility and storage.

In addition, approval procedures in many member states continue to be lengthy. According to the association, these structural obstacles are slowing down the market ramp-up more than a mere market correction following the years of the energy crisis. As a result of these developments, Solar Power Europe has significantly downgraded its forecasts. Within a year, the association has lowered the medium scenario for 2030 by 12 percent, which corresponds to a reduction of almost 100,000 MW compared to previous expectations.

All EU states called upon

The report also points to a persistently high level of market concentration. Around 80 percent of newly installed capacity between 2026 and 2030 is likely to come from just ten member states. Although countries such as Romania, Portugal and Greece are gaining in importance, almost half of the new installations will still come from the EU's three leading solar markets. According to Solar Power Europe, this underlines the need for broader participation in order to achieve the EU-wide targets.

According to the association, a look at the national energy and climate plans also shows a gap between ambition and reality. The updated plans provide for a total of 701,000 MW of solar capacity by 2030, which is below the EU target. The association expects that around a quarter of member states will miss their own targets under the current market and policy conditions.

Political redirection required

Solar Power Europe is calling for a political change of direction in order to accelerate expansion again. The association is in favour of an EU-wide flexibility strategy that promotes the rapid expansion of battery storage, demand management, digitalization and the expansion of the grids. Without these measures, there is a risk of negative electricity prices, more frequent curtailments and a decline in investor confidence, according to the association.

The current market outlook should be a warning signal for European energy policy. Solar energy is central to energy security, competitiveness and the achievement of climate targets. According to the association, the EU can still reverse the negative trend if political decisions are implemented more quickly and in a more coordinated manner.

The report on the development of the EU solar market is available online.

Author: Susanne Harmsen