Europe faces PV uncertainty – EPIA

The future of the European PV market will likely remain uncertain for the coming five years, which will limit its contribution to the expansion of global solar markets, a new report by the European Photovoltaic Industry Association (EPIA) shows.

“In the highest probability situation, 2014 will see a new market decline in Europe that could limit the amount of new connections to around 8-9GW,” EPIA says in its Global Market Outlook for Photovoltaics 2014-2018 report, published on Monday.

In the latter half of the decade, the growing competitiveness of PV in several key countries could maintain a market of 10-12GW, the report says.

In a “low” scenario, without much support from policymakers, EU additions could collapse to 6.9GW this year, before crawling back up to 8.3GW in 2018.

In the “high” scenario, the market could stabilise this year around 13GW, and then begin growing again by next year, before reaching 17.2GW in 2018. The optimistic scenario would require a stabilisation in the largest markets of Germany and Italy, a continuation of policies in the UK, and a renewed uptake in Spain and possibly France.

The highest probability is a medium scenario in between the low and the high estimate, EPIA reckons.

Due to the slower PV expansion, Europe’s share in global accumulated PV capacity is set to narrow to 36%-37% in 2018, down from 50%-51% this year.

In 2013, the European market declined to 11GW, its lowest level since 2009. But the decline hides various realities at national level.

“With PV’s levelised cost of electricity (LCOE) now lower than the price of retail electricity, at least in the residential and commercial segment in Germany or Italy, PV development could be at least partially driven by self-consumption rather than only FITs or similar support schemes,” the report states.

Several countries, such as Spain, the Czech Republic or Greece, imposed retroactive changes to support schemes, while in Bulgaria and Belgium grid costs for PV systems rose.

Installations in Germany – still Europe’s biggest PV market in 2013, with 3.3GW of additions – more than halved, amid a sharp decline in FIT levels and regulatory uncertainty.

While the slowdown in Germany and also Italy was expected, in each of the past years some smaller PV markets in Europe went through a boom and bust cycle due to abrupt regulatory changes.

“The instability of markets in Europe leads to the important conclusion for market forecasts in Europe that, with the exception of a comparably soft landing of the market in Germany, no country that experienced a serious PV boom once has so far succeeded in restoring market confidence,” EPIA says, citing Spain, the Czech Republic, Slovakia and Bulgaria as examples.