BRUSSELS : New industry data from Solar Power Europe reveals that the EU is projected to install 64.2 gigawatts (GW) of new solar capacity in 2025 — a 1.4% drop from the 65.1 GW added the previous year. This marks the first annual contraction in solar market growth since 2015.

The slowdown reflects shifting political and financial priorities across member states. As governments face mounting pressure on public budgets due to increased military spending and support for local industries, some have scaled back financial incentives for clean energy — particularly residential solar installations.

Residential rooftop solar, once a major driver of growth, is expected to make up just 15% of new installations this year, down from an average of 30% between 2020 and 2023. Countries like Germany and France have slashed subsidies for feed-in tariffs, while the Netherlands has cut back on incentives for households feeding excess power back into the grid.

Despite solar accounting for a record 22% of the EU’s electricity generation in June — making it the region’s largest power source that month — the drop in new capacity raises concerns about meeting long-term climate and energy independence goals.

At the current pace, the EU is projected to fall 27 GW short of its 2030 target of 750 GW of installed solar power — a gap that threatens efforts to reduce carbon emissions and move away from reliance on Russian energy.

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