In focus: Solar energy – harnessing the power of the sun – European Commission

Solar power is a cheap, clean, modular and flexible energy source. It is currently one of the cheapest renewable energies on the market and the most accessible one for European households. In 2020, 5.2% of the EU’s total electricity production came from solar energy. Based on current market trends, it has the potential to meet up to 20% of the EU’s electricity demand by 2040.

As stated in the European Green Deal and the REPowerEU plan, a further deployment of solar energy installations is an essential step in the EU’s transition towards clean energy and climate neutrality. Moreover, increasing its uptake reduces our dependence on imported fossil fuels.

Solar technologies

Increasingly advanced technologies convert sunlight into energy, taking the form of electricity (photovoltaics and concentrated solar power) or heat (solar heat).

Solar photovoltaics

Photovoltaics (PV) convert sunlight directly into electricity by creating voltage or electrical current. EU renewable energy policies have helped bring solar photovoltaics costs down by 82% over the last decade thanks mostly to subsidies. This reduction has boosted the demand for solar, which has contributed to making them one of the most competitive electricity generation technologies in the EU and one of the fastest-growing in renewable energy: from 52 GW of total installed PV capacity in 2011, the EU reached almost 160 GW in 2021. At employment level, the solar PV industry employed 357,000 full-time equivalent (direct and indirect) jobs in 2020 – a figure that is expected to at least double by 2030.

New solar photovoltaics technologies promise higher energy conversion from sunlight, more energy efficiency and lower costs for industry and consumers alike. New technologies are also being developed for new uses; for instance, building-integrated photovoltaics (BIPV) create products that serve at the same time to generate electricity and as building components, such as the roof or the façade. Ongoing EU-funded projects Be-Smart and BIPVBOOST analyse the main market barriers and demands to further integrate solar technologies in the construction industry.

Concentrated Solar Power

Concentrated Solar Power (CSP) covers all technologies that aim to transform solar radiation energy into very high temperature heat for onward conversion into electricity.

CSP has the potential to become a key technology for renewable electricity production in all net zero emissions scenarios. A considerable advantage of CSP is its ability to store thermal energy and delay electricity production. In an electricity system characterised by high shares of renewables, it can contribute to fill the gaps created by low levels of renewable generation. However, compared to PV, CSP heavily relies on direct irradiation, which limits its application to certain regions in the world.

Solar thermal technologies

Solar thermal technologies are used mainly to produce domestic hot water in residential buildings and industry through heat collectors. Collectors or concentrated solar heat technologies are also used to provide heat for industrial applications, for instance, in the agro-food industry.

The main advantage of solar thermal for industrial uses is that it is cheap and predictable and does not rely on any fuel. They can be deployed in most European regions and are a particularly good option in Europe’s Eastern and South-Eastern countries, where solar thermal heat is often the cheapest option to replace fossil-fuel heating.

The integration of solar collectors in energy-efficient renovations of housing and buildings can contribute to the expansion of these technologies.

Speeding up solar energy

The accelerated deployment of solar technologies is at the core of the EU Solar Energy Strategy, published in May 2022 as part of the REPowerEU plan. It outlines several initiatives to unlock the solar generation potential of rooftops (European Solar Rooftop Initiative), address the skills gap in the solar energy sector (EU large-scale skills partnership) and scale up PV manufacturing in the EU (EU Solar PV Industry Alliance). Through these initiatives, the strategy aims to bring online over 320 GW of solar photovoltaic by 2025 and almost 600 GW by 2030. These frontloaded additional capacities can displace the consumption of 9 billion cubic metres of natural gas annually by 2027.

To tackle the bottlenecks that slow down renewable projects, the Commission published alongside the REPowerEU plan a Recommendation on fast permitting for renewable energy projects and introduced a legislative proposal on permitting to speed up permit-granting procedures for renewable projects and facilitate power purchase agreements.

The expansion of the EU solar value chain and the uptake of solar energy production have been hindered in recent years by the reluctance of the financial sector to support industrial investments, limited supply chains for the different components and complex permitting processes. Currently, the EU imports most of the solar energy products it installs. In 2020, it purchased €8 billion of PV panels, 75% coming from China, where most of the global manufacturing industry concentrates. Upscaling the manufacturing of solar technologies in the EU is therefore key for a competitive expansion of solar energy production.

Investments and attractive financing conditions support the development of solar PV manufacturing capacities in the UE. Under REPowerEU, additional investments in solar PV could amount to €26 billion between now and 2027. Other funding instruments contributing to the deployment of solar technologies in the EU are the Recovery and Resilience Facility, InvestEU and the Innovation Fund.

Research and innovation

The EU supports research and innovation projects that contribute to reducing the cost of solar energy technologies and increasing their energy efficiency and sustainability. Many of these projects are looking into integrating solar PV in agriculture, transport and industry. Already under Horizon 2020 (the predecessor of Horizon Europe), a total financial contribution of around €259.5 million was invested on activities related to photovoltaics between 2014 and 2020.

The Horizon 2020 SolAqua project explores the use of solar irrigation, where solar energy powers the pump which supplies water, as a zero-emission energy for crop irrigation. Innovative technologies, such as floating PV, are also key to increase capacity for solar power beyond classical rooftop and ground-mounted PV installations. The FreShER project, which kicked off in 2019, aims to showcase innovative technology for floating solar power plants that results in improved cost-efficiency.

Solar energy requires technological, digital and operational advancements to be seamlessly integrated into the EU’s energy system. Integrating decentralised solar installations will require adaptations in distribution networks and digitalisation investments, such as smart grids, to enable higher system performance and a more efficient transmission. Energy storage through batteries and heat pumps can also contribute to the integration of solar electricity into the energy system if these effectively communicate with each other.

International cooperation

The EU works with strategic partners to expand solar energy and other renewable energies globally and to remove trade and investment barriers to their deployment.

In cooperation with the International Renewable Energy Agency, the EU is preparing Regional Energy Transition Outlooks for Africa, Latin America and the Caribbean and Europe, providing a thorough analysis of the regions’ potential and options in terms of renewable energy, energy efficiency, infrastructure, energy access and cross-border cooperation. The EU also cooperates with the International Solar Alliance to disseminate its experience in solar energy technologies, policies and practices.

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