For 2012, Europe retained its dominant position in global PV demand reaching 16.5GW, according to findings in the new NPD Solarbuzz Marketbuzz report.

Strong demand from Europe was due primarily to premium incentives that remained in place during 2012, along with lower installed system prices (ISPs). It was also a year in which European incentives declined in value, as administrators closely followed the downward trajectory in PV system prices.

During 2013, the European market will continue to transition away from a premium-incentives PV environment towards PV electricity being driven on the grounds of competitive cost. During this transition period, major European markets will see declining PV demand.

But this transition phase will not be completed during 2013 in major European markets. Premium incentives will continue to decline (or disappear) in 2013, but additional retroactive impositions are expected (for example, in Greece).

In fact, various retroactive impositions on PV operators have emerged in Europe during 2012 and earlier. For example, in Spain, PV operators are realising 35% less revenues (compared to 2008 administrative ‘guarantees’) due to the sum of retroactive impositions. Greek operators might expect a similar outcome.

While distributed PV electricity generation can make a compelling economic case in Europe, relative to higher retail electricity rates, emerging grid-access barriers will constrain growth. Utility companies will continue to provide barriers to PV, and are likely to undertake more lobbying related to grid-access fee schemes and smart-meter implementation.