Study: incentives giving boost to European solar sector[fr] 

Germany - which has towered over its European neighbours in the solar sector for the past few years - is now being joined by Spain in the booming photovoltaic (PV) energy sector as the leading consumer of solar power. 

Germany currently accounts for about half of the world's installed solar power capacity, mainly thanks to government subsidies, known as feed-in tariffs. Such schemes guarantee producers a fixed buy-back price, for up to 20 years, for power created and then sold to the national energy grid that is higher than the market price for electricity (EurActiv 16/01/08). 

Other European countries, such as the Czech Republic, Bulgaria and Switzerland have adopted similar measures which have led to a groundswell of solar activity within Europe. "Developers are now positioning for first-mover advantage to establish operations in these emerging PV markets," says the report, entitled "Solar PV Development Strategies in Europe 2008-2020" by Emerging Energy Research (EER). 

German solar power developers, who have enjoyed feed-in tariffs domestically, are now branching out to take full advantage of similar incentives in south European countries, especially in Spain and Italy. 

However, due to the rapid growth of the solar sector, the supply side has not been able to keep up. As a result, developers are now looking for alternatives to the traditional silicon PV cells and turning to the less efficient – but also cheaper – thin film. "To survive the currently evolving market environment, developers' nimbleness will be critical to their ability to keep up with solar PV’s increasingly frenetic pace," said EER senior analyst Reese Tisdale. 

There are currently 1,562 megawatts of PV capacity installed in Europe, with 1,440 megawatts (some 92%) coming from Germany and Spain alone. By 2012, the EER estimates that due to the recent surge in solar development, there will be 22 gigawatts of PV capacity installed, with the majority of this coming from six countries: Germany, Spain, Italy, Greece, France and Portugal. 

The EU wants to boost the share of renewable energies in final energy consumption to 20% by 2020, a considerable increase from the current 8%. The proposals, put forward by the Commission on 23 January 2008 (EurActiv 24/01/08), are currently being debated between Council and Parliament and could be adopted in a first reading agreement as early as October 2008.