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185 days ago

EU Rooftop Solar Market Slows: What It Means for 2030 Targets

Europe's solar market is set to contract for the first time in a decade. Discover what's driving the decline in rooftop solar and why utility-scale installations and Corporate PPAs are stepping in to fill the gap.

 

Solar growth in Europe is slowing — and it could derail the EU’s 2030 energy targets.

For the first time in more than ten years, solar installation across the European Union is expected to shrink in 2025. That’s according to new mid-year data from SolarPower Europe, revealing a downturn that could have wide-reaching consequences for the continent’s clean energy transition.

If current trends continue, the EU will miss its target of 750GW (DC) of installed solar capacity by 2030, falling short at 723GW.

 

Why is the rooftop solar market declining?

The sharpest slowdown is happening in the residential rooftop segment — which previously drove around 30% of new solar capacity between 2020 and 2023. In 2025, it’s set to contribute just 15%.

So, what’s changed?

  • Electricity prices have stabilised or dropped in many markets, weakening the financial case for new rooftop installations.

  • Households and SMEs are postponing investments.

  • Government incentives have been reduced or withdrawn altogether in several major EU countries — and in many cases, without offering alternative support mechanisms.

The result? A short-term rush to install before incentives expired — followed by a sudden drop in demand.

 

Utility-scale solar and Corporate PPAs are still growing

While rooftop solar is struggling, utility-scale projects are continuing to expand. In fact, they’re expected to account for around half of new installations in 2025.

A key driver behind this resilience? Corporate Power Purchase Agreements (CPPAs). These long-term contracts give developers and buyers pricing stability and are increasingly seen as a critical tool for financing and de-risking large-scale projects.

As SolarPower Europe puts it:
“CPPAs have offered long-term certainty at competitive cost for developers and off-takers — driving a boom in recent years.”

 

What happens next?

SolarPower Europe is calling on policymakers to act quickly. Their recommendation? Improve the value of solar electricity within the system by:

  • Scaling up energy storage

  • Supporting grid flexibility

  • Reintroducing or restructuring rooftop incentives in key markets

Without intervention, the EU’s solar ambitions — and the jobs, investments and emissions reductions tied to them — could stall.

 


Want to stay ahead of the curve in solar?
We work with top developers and investors across Europe’s utility-scale and rooftop markets. Get in touch to learn how we're helping clients navigate this shift.

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