Solar growth slows in 2024 | EU Market Outlook for Solar Power & end of year reflections

In this episode of Shine On Policycast, host Bethany is joined by SolarPower Europe CEO, Walburga Hemetsberger, to wrap up the year. We take a look into our latest report: the EU Market Outlook for Solar Power 2024-2028. The report shows a slowdown in solar market growth this year, and throughout the discussion we delve into why this is the case, and explore the solutions. The episode wraps up with a ray of hope & inspiring solar stories.

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This is Shine On Policycast, the podcast that brings you EU policy updates relevant to solar. I'm your host, Bethany. Let's get started. So here today on Policycast, we have our CEO of SolarPower Europe, Walburga Hemetsberger. So welcome, Walburga. Thanks for coming back on. Thanks for having me, after a year. Yeah! And what a year it's been. We've had a lot of changes. The new European Commission just came into office a few weeks ago. And back in June, of course, we had the new European Parliament after the elections. So it's been a big year of transition, and for the solar sector, too. But we'll get into that shortly. First, we have a tradition this year on Policycast of guests bringing a prop for me to guess what it has to do with the topic of the day. And Walburga has brought not one, but three props. Maybe she can describe for the listeners at home, and then I can make a stab at what they have to do with the topic we're going to discuss today. I couldn't make a choice this morning when I rushed into my kid's room, so I brought a little lion, I brought pliers, and I brought an hourglass. Okay, so lion. It's something to do with bravery or courage or something. A plier to grip something, to pull at something. And hour-glasses, we're running out of time. We've got a time pressure. Yeah, you got the last one right. Yes. One out of three. Okay, 30%, let's go. What does the lion have to do with the EU market outlook for solar power? You also got it almost right there. Solar this year was clearly depicted as the technology that will be delivering the lion share in the energy transition. The IA report was clearly saying that. We also saw, and that was something that excited us all, I still see us at Intersolar, that the Economist special issue was calling it the Dawn of the Solar Age. It's really that lion that depicts the role of solar going forward. King of the jungle type thing. The King of the jungle. We've been called the king of the energy system as well. Several times. Indeed. Pliers? Pliers! There's still a lot of work to be done, overcoming the bottlenecks. That's for me, the pliers and the hourglass. I mean, you got it right. We have no time to lose. There's an urgency, and we'll come to that why there's an urgency, right? Yes, we'll certainly have time to talk about that in this discussion. So thank you for the props. But we're coming to the end of 2024. And as I said, it's been a year of transition. But if you're going to summarise it in three words, what three words would you use to describe 2024 and why? The three words for me, that's clearly what you already mentioned is change. It was a year of change. Pause. The third one I would pick is wins. Wins? Wins. Okay, interesting. Yeah, on the change. I mean, you've already mentioned it. We have a new European leadership, but not Not only in Europe, but also globally. There's been a lot of changes in the world with a lot of geopolitical uncertainty. It has brought and will still be bringing. We had the European Green Deal in the last five years. The focus in the next five years will be very much on competitiveness and on energy security. There's also a change in focus at European policy levels. At the same time, the good thing is that we got confirmation that the Green Deal is going to continue to be a goal that is going to be pursued more in the implementation than having it as a core focus because a lot has been done in the last five years. And change in market dynamics. That's the change part of thing. Pause because we have a little bit of a pause in solar growth. We'll come to that. Also because I'm coming back in some two, three weeks ago now from COP29. I feel there is a pause in advancing on combatting climate change. Also there, we need to start advancing again much faster in the next round of negotiations. Wins, because I do think we can look back on a year which has been holding a lot of wins for the solar sector for us as an association more generally. Do I have time to mention? Yeah, of course. We've got time to celebrate some of the wins before we look at some of the challenges. Yeah. Last year and beginning this year, saw market design rules, which are extremely important because it is giving the regulatory stability that we need. There's also a very specific solar win there, which is Energy Sharing, which we're very proud of. It's a first landmark for Europeans. We had a very successful European Solar Day, really bringing the benefits of solar to the wider public, to citizens, and the first solar magazine, which is bringing the benefits to the new members of Parliament. We had a very nice stunt in the front of the Parliament this year. Very successful events, our flagship event, SolarPower Summit. We had two commissioners, there's two ministers, a lot of high-level people, and a lot of our members, 400 participants. Registrations have just opened for SolarPower Summit 2025, so go register. 26 and 27 March for everyone who is listening. The biggest ever resource event with 1,400 participants. Really connecting business with business, but also business with policymakers, I think that's very important. We saw the Solar Stewardship initiative taking off, which is our transparency platform, as you know, which should bring more traceability, transparency to the solar sector, a very important project, and which hopefully will be further taking off this year. Personally, I think I was very excited to join the European Council, the Energy Council, for the first time representing the solar sector. I think it was a first for the solar sector to be talking to all 27 energy ministers in a council meeting and conveying our messages there. So that was a highlight. It was the same time as the SolarPower Summit as well. Yeah, unfortunately. So run across time. But what a reason to be double-booked! So this is some of the wins. But this time last year, you were joining us to talk about the EU Market Outlook and the report that will be on our website by the time this podcast is live. And as you said, last year we had incredible growth and the picture is pausing, perhaps for now. So maybe what are your key takeaways from this year's report? The last three years, we've been celebrating growth big time with growth rates of more than 50%. Now, that growth from 2023 to 2024 has been down to 4%, from more than 50% down to 4%, so that's a 90% drop in growth. That's major. It's pretty dramatic. It's dramatic, yeah. What we also saw for the first time is that there's a slowdown in investments. Investments are 6% down. That has to do with the prices of the material that's used. But still, when we still had a €60 billion investment in 2023, it's down to €56 billion investment in 2024. Also there, we've seen a drop. I want to stay on the positive side. Find the silver lining. Because we should also not be too pessimistic. We're still growing. We've been growing with 4%. We've been adding 65 GW to the energy system this year, and that is up from the 62 GW that we have been adding in 2023. There is some add-ons, and we're adding 65 GW. And 65 GW is still a substantial number. Which is a substantial number, yes. But it just shows that there's an urgency in making sure that this growth is not further slowing down, because otherwise, we will not hit the 2030 targets that the European Commission wants us to hit, and we still have the announcement here of the European Commission on the on the side of the road for solar and for the Re-Power EU targets that we want to see by 2030. We need to be hitting, I think, 70 GW a year, at least, to be reaching that target. Climate change isn't slowing down, so nor should we. It's been a bit of a roller coaster year, the solar coaster, as we say. What are these main challenges? What's causing this pause in growth? How can we tackle them, maybe? The main bottlenecks on the market side are clearly grids and flexibility. We do see that we're getting to a point where it is getting more and more difficult to connect solar to the grid. But also we see a lot of negative prices in the market. We see a lot of curtailment of solar. All of that is obviously not helping investors to make that investment decision, but also getting to some very physical bottlenecks that we can just not connect projects to the grid that is both on the rooftop side, but also on the utility side. These are really the main challenges we need to work on urgently. It usually takes a little bit more time for grids, but we need to get that going. We need to digitalise grids. That is extremely important in order to get all this flexibility then also into the system. We need to also, where necessary, build and modernise the grids with a strong focus on the decentralised level. But on the flexibility side, we need to make sure that we are focusing, but really big times on electrification on the one side, because we need to have flexible demand that is helping us to integrate solar, integrate renewables more generally, but also build up assets, storage, a lot of batteries, multiple times what we have today, more than 10 times. We need to see that in 2030 to have both supply side and demand-side flexibility that is helping us on this famous stuck curve. Yeah, the benefits of solar across the day. But what we should also mention is that because more and more, you hear that solar is becoming a problem for the energy system. We should really rephrase that because we're not a problem to the energy system. We're the solution for many things, Europe's competitiveness, solution to energy security, more generally, and not least for climate change. We just need to make sure that this solution, also is valued and that we get it into the system. It's not a small challenge, but it's one that needs to be tackled. We can look at all the studies. Solar flexibility, it's the cheapest energy source out there. If we're talking competitiveness, solar is part of that solution. We mentioned that we had a new EU mandate, we've got some new policymakers across the road and at the Place de Lux, at the European Parliament. What would we like them to do in terms of tackling maybe this flexibility challenge and some other bits of the puzzle? Indeed, you mentioned what we did, and maybe to deep dive a little bit on that still before I'm answering your question. Because one thing we should also not forget is we had a flagship report on flexibility last year, Mission Solar 2040, where we've been showing showing very clearly and with very clear figures how much we can, first of all, save on costs for the energy system more largely. If we are adding flexibility to the system with €30 billion saved in yearly costs by 2030 and €180 billion saved by 2040. That is clear benefits we need to get across the street. Then all the benefits it brings to businesses because the wholesale prices will be reduced, but then also to our own industry because curtailment will be reduced by 50% in 2030 and capture rates of what companies can earn will be increased. That report needs to be the guiding line for policymakers on the other side. Electrification, smart electrification needs to be in the focus because this is where demand-side flexibility is. We need to electrify transport, we need to electrify heating, and we need to electrify industries only with flexible demand, electric demand, we can get there. I really do hope it will be not just a slogan that European policymakers will be following, but that there will be clear actions in order to put electrification. First, an electrification action plan is already planned. It's a mission letter. It's planned for the end of the next year. But I do hope that also in the deliverables that will be seen early on next year, which is the Clean Industrial Deal, affordable energy action plan for industry, all that is already clearly putting electrification first with all the benefit it brings. That's on the market side. But then obviously, there's also the industry side of things, because we do know that Europe has been making a historical mistake in the last 10-15 years, giving up on solar manufacturing. We should not make a second time this historic mistake by policymakers picking up some of the ideas that solar is a lost cause to begin up. This needs clear attention. If solar is going to be the lion and deliver the lion's share in our energy transition. We should also make sure that we are resilient as Europe and we're producing also solar in Europe. That is another thing that European policymakers need to focus on, making sure that we're hitting the goal that we set ourselves a couple of years ago, 30 GW of solar manufacturing by 2030. But that we also look at those areas where we're still producing in Europe, which is Invertus, the brain of the solar system, which is mounting structures, which is trackers, which is equipment manufacturing. When people are talking about solar that has been lost, we should also educate people and policymakers in particular that we still have an industry here. Think about the whole value chain. Indeed. So do not give up on solar. Innovation is still happening in Europe and we need to just get that on the ground again in Europe. Hopefully, the Net Zero Industry Act is coming into force. Maybe there'll be some movement there, too. We saw 23 member states signing the solar charter last year. They need to implement what they've been signing. Follow through on some promises, perhaps. But of course, there's some challenges here, there's some solutions, but it's not all negative. We like to think about the bright side of things. What are some solar stories this year that have inspired you and kept you going? Talking about solar stories, I think what we should mention is that we have a fantastic set of solar stories on our web page, which is always very nice to have a look at. My personal favourite solar story is... maybe two. One, which I came across recently, which is from my home country, from Austria, which is an agri-PV plant that I think is going online end of this year from Burgenland Energie, one of our members. That is the biggest agri-PV plant in Austria, 160 GW, which is facilitating organic farming, but also has some biodiversity aspects to it, but is also using European mounting structure, for example, and is also making sure that the benefit of that relatively big plant is getting to the people living around that plant, really engaging the community around it. I think that's really putting a number of elements into one project that we want to see more generally. I found that highly inspiring. The second one is an example. Probably some people are getting tired listening to me because I'm mentioning it very often, which are two examples of beautiful energy sharing in Portugal. Portugal is one of the front-end. Yeah, it's a good example. I really love the first one, which is a kindergarten in Cascais, which is using the electricity and sharing it with some vulnerable families around that kindergarten. The kindergarten itself is profiting from a lower electricity bill. The families around it are profiting, and the benefit is shared with the one company that made that investment. That is a really beautiful example. There's a similar one also in Portugal, which I came across when I was joining a conference there, which is a stadium in Lisbon, who's sharing the electricity there, producing with solar on their roof with a cancer hospital nearby. Super nice. I mean, football stadiums have such massive roof space. Of course, it's obvious it should be. Yeah, and that should be explored much more. I hope that the football clubs that are listening to us are getting inspired using their roof space. I have to get on to FIFA and UEFA. I'm not sure if they're listening, but we'll get in contact. We're wrapping up. We're approaching a new year, and it's a big year for SolarPower Europe. The association is turning 40. What are you looking forward to in 2025? Is there any last words you want to leave with us? Particular goals that you have for yourself, for the organisation? In the end of the year, it's obviously always a good moment to say thank you. We have this tradition at the all-hands meeting, and I see it from afar, of appreciation shower. I don't have the prop here, but first of all, I want to thank the members, our members who are supporting us throughout the whole year, and again this year, because without their support, we would not be able to do our work. Also with their input they are providing us, so that is very important. But a very big, big thank you also goes to the team, and some of them are here. Because really the team's drive is inspiring me big times and has been inspiring me throughout the last year. I'm super proud of our SolarPower Europe team and the huge talent that we're gathering here. I wanted to say thank you also through this podcast to the team. Now, what I'm looking forward to in 2025 is, I hope we will be celebrating a lot of new successes with the team and with our members that will be helping rolling out solar again much more quickly and that we're getting back on the growth side of things. That means establishing contacts with new leaders of the European Commission, the new leaders of the European Parliament, we've already started that. We're continuing to do that. And getting their support for overcoming the obstacles that we still have. It's a good plan for 2025. Before you leave, people can hear more from you regularly on social media. Maybe you can tell listeners where they can find you online. Yeah. Linkedin, if you type Walburga Hemetsberger. You're the only one, I think. I think so. And I still have an X account. Yes, for now. We'll see what 2025 brings. Which is @SolarWalburga. So let's see. Thanks so much, Walburga, for your time today and for 2024. And let's see what 2025 brings. Thanks, Bethany, for having me. Thanks for listening to today's episode. This podcast is brought to you by SolarPower Europe. If you don't want to miss our next episode, make sure to subscribe and turn on notifications. Shine on.