EU Solar Energy Growth Set to Dip for First Time in a Decade Amid Policy Shifts

The European Union’s solar energy sector is poised to experience its first annual decline in capacity expansion since 2011, according to a mid-year analysis released by SolarPower Europe on Thursday. The projected slowdown comes amid the rollback of rooftop solar incentive schemes in several key member states.

The latest forecast anticipates the EU will install 64.2 gigawatts (GW) of solar capacity in 2025, marking a 1.4% decrease from the 65.1 GW added in 2024.

While solar power generation continues to rise across the continent—especially during the summer months—industry leaders warn that this minor reduction carries major symbolic weight.

“The number may seem small, but the symbolism is big,” said Dries Acke, Deputy CEO of SolarPower Europe.“A shrinking market at the very moment solar should be accelerating must serve as a wake-up call for EU leaders. We urgently need clear frameworks for electrification, flexibility, and energy storage to sustain long-term solar success.”

The forecasted dip follows two record-setting years: in 2022, solar installations surged by 47%, and in 2023, by 51%. Growth then plateaued in 2024, with a modest 3.3% increase year-on-year.

This year’s expected decline is primarily attributed to a drop in residential rooftop solar installations, especially in countries like Italy, the Netherlands, Austria, Belgium, Czechia, and Hungary. In these markets, households are delaying installations as the urgency from the 2022 energy crisis diminishes. Additionally, the withdrawal of subsidy programs—with few or no replacements—has triggered a collapse of over 60% in the rooftop solar segment compared to 2023.

The EU has set an ambitious target of reaching 750 GW of installed solar PV capacity by 2030. To meet this goal, annual additions need to average nearly 70 GW. However, with the current pace hovering around 65 GW, Europe is projected to reach only 723 GW by the end of the decade—falling short by 27 GW.

SolarPower Europe stressed that this trend should push policymakers to re-evaluate support mechanisms and ensure solar continues to be a cornerstone of the EU’s energy transition strategy.