EU Solar Growth Stalls, Tracking First Annual Decline Since 2015

• SolarPower Europe sees EU solar installations slipping 1.4 % in 2025, the first decline since 2015, as rooftop demand collapses and policy support wanes.

After a decade-long building spree that turned photovoltaics into the European Union’s biggest single power source, the solar industry is about to hit the brakes. SolarPower Europe’s mid-year outlook predicts member states will install 64.2 GW of new capacity in 2025, down 1.4 % from the 65.1 GW added last year — the bloc’s first year-on-year drop since 2015.

Why the slowdown?

The chief culprit is the residential rooftop segment, once the engine of Europe’s solar boom. Incentive roll-backs in markets such as Italy, the Netherlands, Austria, Belgium and Hungary have triggered a collapse of more than 60 % in home-solar demand versus 2023. Poland, Spain and Germany are staring at declines of over 40 %. Stabilising electricity prices, higher interest rates and policy uncertainty have convinced many households to postpone installations. 

Policy shifts are biting hardest in Germany, France and the Netherlands, where feed-in tariffs and net-metering compensation have been trimmed or capped. Installers report a “decision paralysis” as customers wait to see if support schemes will be restored. Rooftop arrays that used to represent roughly 30 % of annual additions are expected to account for just 15 % this year. 

Utility-scale projects still marching on
Paradoxically, utility-scale solar is accelerating, buoyed by oversubscribed auctions that increasingly pair PV with storage. SolarPower Europe estimates the large-project segment will deliver about half of all new megawatts in 2025. Nonetheless, cheaper wholesale power has cooled corporate appetite for long-term offtake deals; new solar PPAs fell 41 % between the first and second quarters. 

Target trouble ahead

Even with this year’s dip, the EU should scrape past its 2025 milestone of 400 GW, finishing around 402 GW. But the current trajectory would leave the bloc 27 GW short of its 750 GW 2030 target, raising alarms inside Brussels. “The number may look small, but the symbolism is big,” warned SolarPower Europe deputy CEO Dries Acke, urging policymakers to deliver grid flexibility and storage frameworks that can sustain growth through the decade.

Solar cemented its status last month by generating 22 % of EU electricity. Whether it can keep climbing depends on restoring consumer confidence, stabilising incentive regimes and unlocking private capital for the next wave of projects. For an industry accustomed to record-breaking highs, 2025 could be the wake-up call that spurs a fresh policy rethink.