EU's Solar Surge Stalls Amid Policy Shifts and Economic Uncertainty

The European Union is witnessing its initial year of decelerated solar energy capacity expansion, a shift not seen in more than a decade, according to industry data released on Thursday. This trend comes as some governments trim back subsidies for rooftop solar systems, reflecting evolving political agendas directing funds towards defense and local industry initiatives.

The EU is projected to introduce 64.2 gigawatts of new solar capacity by 2025, a slight dip from last year's 65.1GW, reports SolarPower Europe. The slowdown in the solar market, which witnessed a 51% capacity boost in 2023 but slowed to 3% last year, highlights emerging economic uncertainties and rising interest rates, contributing to weakened demand.

Specifically, the installation of residential rooftop solar panels, accounting for 15% of new capacity this year, has notably decreased. Countries like Germany, France, and the Netherlands are scaling back incentives such as feed-in tariffs. Legislative changes and policy reassessments by some EU governments, especially regarding subsidies, are seen as factors impeding the realization of the EU's ambitious solar and climate targets.

(With inputs from agencies.)