New European PV installations are expected to pick up slowly by mid-2014 after a disappointing 2013 in which the continent's transition away from solar subsidies will continue to stifle demand, according to Solarbuzz.
The analyst firm predicts 11.2GW of new capacity will be installed in 2013, down 33% on 2012.
The market will hit its low point early next year, with 2.3GW installed in the first quarter of 2014. New installations will then climb marginally over the year, reaching just under 3GW by Q3 2014.
Solarbuzz said the transition was due to a continued shift away from feed-in tariffs as the main market driver, with residential consumers gaining more value from using their own PV-generated electricity than selling it at declining FiT rates.
It predicted a similar shift for commercial consumers, though “to a lesser extent and in somewhat fewer markets”.
Solarbuzz analyst Tim Murphy said that underlying Europe’s situation was a growing conflict between different business models: centralised generation for distribution or sale versus self-consumed distributed electricity.
“The centralised model counts on increasing demand for electricity, as well as expansion of generating plant and transport and distribution grid capacity,” Murphy said. “The distributed PV model counts on point-of-use application to avoid electricity purchase, which is at odds with the basic elements of the centralised business plan.”
Solarbuzz said this conflict was exacerbated by the complexities of Europe’s open-market electricity sector, from which PV has been largely shielded by the various tariff regimes operated by different countries.
For example, in Belgium and Denmark, changing grid access policies have prompted a collapse in the residential PV segment, potentially a sign of things to come as PV loses its protected status.
Future growth in PV will depend on the extent to which countries are able to resolve emerging grid barriers, Murphy said.
A further factor influencing recovery would be the long-term effects of the EU-China trade dispute, Murphy said, which has already created uncertainty but not yet had a significant impact on end market forecasting.
Post-2014, Solarbuzz said the ‘most likely’ scenario for Europe’s solar market would be slow growth up to 2017, with 2012 installation rates being equalled again in 2016.
“Optimism for growth in 2014 and beyond comes with competitive PV electricity finding its way in appropriate applications that leverage the tangibly simple aspects of the PV proposition. Conflicting electricity business models remain to be rectified,” Murphy said.