The growth of the solar market in the European Union slowed sharply in 2024. After years of expansion, newly installed capacity increased by only 4%, adding 66 GW—well below the over 50% growth rates recorded in previous periods. Looking ahead to 2025, SolarPower Europe projects a moderate recovery of 7%, with an additional 70 GW, driven by projects initiated between 2023 and 2024 that benefited from record-low solar module prices.

By 2030, the REPowerEU goal of installing 750 GWdc remains feasible, with a mid-range projection of 816 GW. However, Anett Ludwig, Head of Supply Chains at SolarPower Europe, warns that the lack of flexibility solutions could reduce installed capacity by up to 100 GW, affecting the grid’s stability and the bloc’s energy security.

“Europe urgently needs to invest in flexibility solutions to fully unlock the potential of renewable energy and meet the 2030 targets. In addition, it must implement the Net-Zero Industry Act at the Member State level,” Ludwig warns in an interview with Strategic Energy Europe.

Crisis in European solar manufacturing

Another critical factor is the crisis facing Europe’s solar manufacturing industry. In 2024, solar panel prices fell by 35%, exerting unprecedented pressure on European manufacturers.

“The current financial climate makes it extremely difficult to open new factories in Europe,” says Ludwig. “Without government support, instead of expansion, we could see more plant closures across the continent.”

Competition with Chinese manufacturers has led many European companies to reduce or halt production. Without intervention, Europe could lose its industrial capacity and become entirely dependent on imports for solar energy deployment.

The impact of U.S. tariffs and the risk for Europe

In February 2025, the United States imposed a 60% tariff on imports of Chinese-made wafers, cells, and polysilicon, causing uncertainty in the European renewable sector.

“If the U.S. market closes, these products could be redirected to other markets, including Europe,” Ludwig notes. This could lead to a flood of ultra-low-cost solar panels in the EU, further impacting local production. However, SolarPower Europe maintains that growing domestic and global demand in China could absorb some of these products, mitigating the impact on Europe.

As for the EU’s response, Ludwig asserts that the bloc should focus on its own industrial strategy and expanding its solar manufacturing capacity.

Regarding the possibility of the EU adopting similar measures to the U.S., Ludwig clarifies that the European solar sector has spoken out against trade barriers, with more than 400 industry organizations rejecting import restrictions in 2023.

“Europe already tried imposing trade barriers in the 2010s, but this failed to develop the continent’s industrial base and coincided with a drastic slowdown in solar deployment. The bloc must focus on a clear industrial strategy and increasing its solar manufacturing capacity,” she emphasizes.

The challenge of implementing the Net-Zero Industry Act in the European solar industry

The Net-Zero Industry Act (NZIA) represents a major step forward, setting a goal of 30 GW of domestic manufacturing and recognizing solar energy as a strategic zero-emission technology. However, Ludwig warns that its success will depend on effective implementation and complementary measures to strengthen local production against global competition.

One of the biggest challenges is financing, as the NZIA provides a framework, but significant investment is still needed to expand manufacturing capacity in Europe. To ensure its effectiveness, SolarPower Europe has submitted three proposals to the European Commission regarding the implementation of criteria in renewable energy auctions.

Among its recommendations, the organization stresses the need to prioritize quality over quantity in non-price criteria, to reduce bureaucracy and minimize administrative costs. It also urges avoiding regulatory fragmentation among Member States and ensuring a balance between resilience and deployment by simplifying auction design.

Additionally, SolarPower Europe calls on the Commission to issue clear guidelines for Member States and establish a long-term roadmap providing visibility on the origin of supplies, future auction design, and the allocation of non-price criteria.

Urgent measures to strengthen the European solar industry

While the Net-Zero Industry Act (NZIA) and the European Solar Charter are key advances, SolarPower Europe insists that additional actions are required to ensure a competitive and resilient solar industry in Europe. Among them, the organization highlights the need to extend state aid under the Temporary Crisis and Transition Framework to cover operational costs and prevent factory closures.

Additionally, the European Investment Bank (EIB) should be involved in financing advanced solar projects through zero-interest loans or a counter-guarantee package, similar to the support provided to the wind industry. The creation of a dedicated financial instrument within the Innovation Fund for solar manufacturing, modeled after the Hydrogen Bank, is also proposed.

To enhance European competitiveness, SolarPower Europe emphasizes the importance of setting clear market access standards aligned with environmental, social, and governance (ESG) values. In this regard, the organization advocates for the rapid implementation of the Eco-design Directive and energy labeling standards for photovoltaic energy, as well as clarification of Forced Labor Ban regulations in the EU.

The recently published Clean Industrial Agreement provides an additional opportunity by prioritizing EU-made products in public procurement processes. However, Ludwig warns that this effort must be complemented with greater financial support for the construction and operation of factories.

“We nee European products to be better valued in public tenders without creating unnecessary barriers to solar deployment,” says Ludwig.