While some European countries have effectively snubbed growing PV markets by slashing FiTs, several fresh untapped markets are emerging in different parts of the planet. We identify the world’s new solar hotspots…
In 2011, Europe accounted for more than 70 per cent of the world’s new PV installations; in 2012 this number was around 55 per cent. In 2013 it is almost certain that the majority of new PV capacity in the world will be installed outside of Europe, a conclusion endorsed by EPIA President Winfried Hoffmann: “The global PV market is shifting from one driven mostly by Europe to one that also depends on countries around the world with varying degrees of solar potential and the political will to exploit it.”
Despite this almost inevitable downturn, Hoffmann remains convinced that the future for European PV remains a bright one: “Some things will not change. Even in challenging times, the prospects going forward for solar PV – a clean, safe and infinitely renewable power source – remain solid, especially the medium-to long-term. The main questions are how and where continued PV growth will occur, and how committed policymakers are to making it happen.”
European governments have encouraged investments by offering subsidies for renewable energy to reduce costs of production and distribution through fixed Feed-in Tariffs (FiT). However, more recently, many governments have pulled out of subsidiaries and FiTs, claiming the sector is too expensive and not competitive enough. For example, in 2011, private equity investors tried to sue the Spanish government over proposed changes to FiTs, which threatened to cause significant losses.
And the Czech government recently proposed to end all renewable support by 2014: “The reason for this law amendment is the rising financial burden for electricity consumers,” Prime Minister Jiri Rusnok said. “It threatens the competitiveness of our industry and raises consumers’ uncertainty about power prices.” In recent years, almost all EU member states also have begun the process of rolling back and cutting green subsidies – even German politicians were publicly considering capping subsidies for the alternative energy sector at the beginning of this year.
Asset investments such as those in wind or solar parks are decreasing because states across Europe are slowly pulling out of the funding and support programmes for renewable energy. This has also resulted in less venture capital deals on the equipment production side of alternative energy as fewer new-builds require less equipment.
The European markets are constrained, to varying extents, by tightening of PV incentive policies, bank lending restrictions, and utility concerns over electricity grid stability as PV deployment spreads. Additionally, policy changes made by various European governments, including the United Kingdom last week, have had some significant and largely unintended consequences.
