Last year, we started the first edition of the year by focusing on the EU Market Outlook for Solar Power. Similarly to last year, the report is dense, but it contains a wealth of interesting data and predictions. If you wish to make a comparison, we recommend splitting your screen in two, with the edition of Solarletter #12 on one side, as we aimed to revisit the same topics. Once again, words are unnecessary; we leave you with the charts instead:
- How much capacity has each country installed in the last three years compared to previous years?
- What is their forecast for 2028?
- What is the cumulative capacity by country for the period 2014-2024?
- What is their forecast for 2028?
- Which were the most significant markets in the last two years?
- Which markets will be the most significant by 2028?
And here we go again with the graph showing installed capacity per capita, where the Netherlands seems to remain the number one fan:
It is interesting to note how a couple of years ago, all predictions were being adjusted upward over time, with the slogan: “the sky is the limit.” However, the tables have turned, and now, not everything seems as rosy. Although photovoltaics will undoubtedly remain relevant for many years to come, predictions are starting to adjust downward. Below, we provide a graph comparing the forecasts from recent editions:
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Chinese Silicon Producers Cut Their Production
In line with the previous chart, there is an interesting post by Fernando Ferrando Vitales that highlights key data questioning the viability of photovoltaic projects without storage in Spain. The feasibility of investments in photovoltaic energy faces serious challenges, such as curtailment—energy that is not fed into the grid—and price cannibalization, which reduces the revenue from injected energy. In this case, a negative multiplied by a negative does not yield a positive but rather elevates the negative to a squared problem.
Starting with curtailment, the post explains that electricity not fed into the grid by order of the system operator accounts for approximately 2%. On the issue of price cannibalization, it notes that the annual average captured price for photovoltaics is around 70%. This was also addressed by Sergio Fernandez in Windletter #50 (sadly, it was still not in English), where he discussed the captured price for wind energy in Spain.
Quick aside: For those unfamiliar with the concept of captured price and wishing to delve deeper, here is an article from Transición Energética. It is in Spanish, but I suggest you to translate it with your explorer, cause it explains it clearly and with examples.
Returning to market price cannibalization, the post highlights that in 2024, there were over 850 hours with zero or negative wholesale prices (nearly 10% of the annual hours), primarily during solar hours, calling into question the economic sustainability of standalone photovoltaics. By comparison, in 2023, there were only 103 such hours. A further increase in solar capacity alone will only worsen this indicator.
Storage emerges as an indispensable solution to address these challenges. However, while the price differential between peak and off-peak hours makes investing in storage potentially viable, the current market mechanisms fall short of supporting its development due to the absence of clear and effective regulation.
The National Energy and Climate Plan (PNIEC) sets a target of 22.5 GW of storage by 2030. Although 9 GW of grid access permits have already been granted, many renewable energy companies are still waiting for a capacity payment mechanism that would provide more predictable revenue streams.
The deployment of storage would be highly beneficial for photovoltaics as it would enable better management of energy supply. However, it could negatively impact other technologies, such as wind, by reducing the prices they receive in the market. Additionally, the administrative processes for incorporating storage into photovoltaic installations are complex and slow, discouraging further investment.
Without changes in regulation and clear incentives, renewable energy sources risk becoming trapped in an increasingly complex and less predictable market. To continue driving the growth of renewables and achieve decarbonization targets, it is crucial to foster synergies between renewables and storage under a clear and fair regulatory framework.
