EU solar growth set for first decline in a decade, still forecast to hit 400 GW in 2025

Solar capacity installations in the EU are set to fall this year for the first time in a decade, SolarPower Europe said July 24 in its mid-year update.

The sector association forecasts some 64.2 GW to be added this year, down 1.4% on last year's all-time high.

"The number may seem small, but the symbolism is big. Market decline, right when solar is meant to be accelerating, deserves EU leaders' attention," said SolarPower Europe deputy CEO Dries Acke

The association called upon policymakers to "deliver the electrification, flexibility and energy storage frameworks that will drive solar success through the rest of the decade."

While the boom over the past three years is enough to deliver the European Commission's 2025 solar target of 400 GW, the lower growth trajectory now falls short of the 2030 target of 750 GW.

SolarPower Europe forecasts some 402 GW by end-2025 and 723 GW by end-2030 in nameplate DC capacity.

Record solar output this spring deflated European spot power prices and with it solar capture prices in markets such as Germany, Spain and France as solar became the biggest source of electricity across the EU in June.

Platts, part of S&P Global Energy, assessed the volume-weighted average capture price for German solar at Eur36.13/MWh in Q2.

Rooftop PV collapse

The downturn is driven primarily by a declining rooftop segment, with traditionally strong residential markets, like Italy, the Netherlands, Austria, Belgium, Czechia, and Hungary, seen postponing installations as the impact of the 2022 energy crisis wanes.

For many markets, the withdrawal of incentive schemes resulted in a residential rooftop market collapse of 60% compared to 2023.

Similarly, Poland, Spain, and Germany are experiencing a decline of over 40%, according to SolarPower Europe.

Meanwhile, utility-scale solar is expected to continue growing in the EU this year, with the segment likely to contribute to around half of new capacity additions.

According to the association, improved auction design has helped restore confidence after 2024 saw a record 20 GW of utility-scale solar awarded across the EU.

Hybrid and co-located storage projects, especially in Germany, are playing a driving role in boosting auction-deployed solar.

Germany leads in solar auctions, followed by the Netherlands, France, and Italy, with Poland and Ireland also scaling up, it said.

While solar auctions strengthen, power purchase agreements are wavering.

New solar PPA signings have dropped 41% between Q1 and Q2 as falling electricity prices reduced buyers' incentive to sign long-term deals.

The Platts index for a 10-year solar PPA in Spain was pegged July 23 at Eur27.95/MWh. That compares to a Eur45.46/MWh VWAP capture price in 2024, when Spain led Europe's booming solar PPA market.

Solar panel prices remain highly competitive after falling sharply over the past four years.

Platts assessed solar modules (50-100 MW, DDP Europe) July 23 at $0.095/W.

Forecast 2025 solar additions

Source: SolarPower Europe (June 2025 update)