European Policies And Photovoltaic Market Outlook

In the next few decades, we will witness the greatest industrial transformation of this generation. "At the World Economic Forum earlier this year, EU Prime Minister von der Leyen expressed a firm commitment to the development of renewable energy. With the recent rise in traditional energy prices caused by the war between Ukraine and Russia, energy transition and security issues have become crucial. This also indicates that Europe will play a key role in this global change.

In order to accelerate the achievement of REPowerEU's goals of renewable energy accounting for 45% of Europe's total installed capacity (approximately 1,236 GW) and a total of 600 GW of new photovoltaic installed capacity by 2030, the EU proposed two policy drafts in March this year: "Net The Net Zero Industry Act and the Critical Raw Materials Act will be carried out under the framework of the Green Deal Industrial Plan released earlier by the European Union.

According to the content of the Net-Zero Industry Act: Before 2030, the EU will simplify administrative procedures and cultivate technical talents to enable a number of "Strategic Net-Zero Technologies" including photovoltaics. ), more than 40% of its annual installed capacity demand must come from local manufacturing. The "Critical Raw Materials Act" stipulates that the supply ratio of critical raw materials that are indispensable in the processing process, especially related to renewable energy, such as lithium and rare earth metals, must not exceed 65% from a single third country.

Relying on the support of many bills, the "Green New Deal Industrial Plan" is regarded as a strong response to the "Reducing Inflation Act" passed by the United States last year. The "Inflation Reduction Act" is expected to invest US$369 billion in the renewable energy industry within ten years, including additional subsidies and tax exemptions for photovoltaics, wind power, energy storage and other fields. In contrast, the EU is also discussing what direction to take. Progress in the direction of expanding investment and subsidies.

In addition to EU-led policies, many European countries have also recently updated their renewable energy targets for 2030. For example, Italy announced that it will raise its photovoltaic installation target from the previous 52 GW to 79.9 GW, an increase of about 53%, and Spain will increase its photovoltaic installation target from 39 GW to 79.9 GW. GW was significantly raised to 76 GW, an increase of an astonishing 94%. Germany, which has long been a European photovoltaic powerhouse, changed its installation target from 200 GW to 215 GW as early as during the Ukraine-Russia War.

Taken together, the policy development of European countries will promote the terminal demand of the photovoltaic market. According to InfoLink, the demand for photovoltaic modules in the European market (including the United Kingdom) in 2023 will be roughly between 92-114 GW. Although in the short term it is affected by problems such as excess inventory and work shortages leading to delays in grid connection progress, in the long term, with favorable policies and optimization of supply chain technology and costs, it is expected that the component demand in the European market will reach 141-141% by 2027. 160 GW, with an annual compound growth rate (CAGR) of approximately 7%-8.9%. This shows that the growth potential of the European photovoltaic market is still considerable.
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