European solar industry going strong, EU research shows 

The annual Photovoltaics Status Report demonstrates that solar power production grew at a rapid rate, averaging 40% over five years since 2003 and peaking at 60% in 2007.  This means that the European photovoltaic industry is now worth €14 billion a year.

The JRC notes that Europe has increased its production volume significantly, and even reached its 2010 target four years in advance. It estimates that while solar energy still only makes up 0.2% of total electricity consumption in Europe, 0.5% of total electricity production in the EU 27 will be generated through solar power in 2010, the equivalent of the total electricity consumption of Slovenia.

Solar power is already giving a significant boost to electricity production during peak demand times, particularly when heatwaves force nuclear plants to reduce output because of shortages of cooling water, the report claims. It estimates that four million tonnes of CO2 are saved as a result.

More importantly, renewable energies are the only ones that will become cheaper in future as a result of innovation and economies of scale, and therefore help reduce dependency on imported fossil fuels, the report suggests.

Nevertheless, the EU faces tough competition, with China emerging as a major player in the industry, the report warns. It predicts that the bloc will only be able to secure a 25% market share, even if the massive growth rates of recent years are maintained.

What's more, expanding production will only be possible if new solar cell and module design concepts are developed, the researchers warn, as current technology uses limited resources like silver, supplied of which are expected to run out within the next 30 years. "Research to avoid such kinds of problems is underway and it can be expected that such bottle-necks will be avoided," they say.

The JRC argues that continued growth will require "reliable and long-term political frame conditions" for Europe to guarantee a return from investment in solar technologies. It recommends that the EU should consider granting priority grid access to electricity from renewable sources and put in place further incentive programmes.

"The EU, with roughly 18.5% of the total worldwide electricity consumption, will have an investment need of almost EUR 59.2 billion per year," the study concludes. 

The European Commission funds photovoltaic energy alongside 27 national programmes in multi-annual framework programmes. The report argues that although the EU budget is small, it is a key factor in creating a European Photovoltaic Research Area.