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Europe’s solar capacity market has recorded a growth in 2017, following a decrease in 2016, according to a new study issued by Frost & Sullivan.

The region has added 8.6GW of solar capacity in 2017 owing to technological progress, cost reductions, and the development of novel business models such as on-site direct wire mini power purchase agreements (PPAs).

The study highlights that:

  • On-site direct wire mini power PPAs are popular among large scale-solar projects to overcome regulatory barriers.
  • Solar power generation is heavily reliant on government support however, regulations will cease to be an influential factor once prices start falling
  • Fully automated energy management will finance new methods of financing
  • Models such as peer-to-peer solar trading will drive the adoption of solar energy-as-a-service

Irmak Giray, a research analyst, Energy & Environment, Frost & Sullivan, said: "Reductions in subsidies and feed-in tariffs (FiTs), tax benefits, rebate programmes, and fund allocations will have a huge effect on the market.

For instance, new capacity in the UK solar market showed a year-on-year decline of 53.8% in 2017, as the country had scaled back solar subsidy programmes. On the other hand, the markets in France and the Netherlands added capacity due to favorable support mechanisms.

"Economies of scale and increasing automation of production will accelerate price reductions in solar modules and installation, which will encourage prosumers. Furthermore, long-term contracts such as solar power leasing programmes and PPAs will allow investors to reduce cost and risk by using clean energy.”

The research firm urges market participants to increase collaborations with various stakeholders including module manufacturers, energy companies, end users, and government organisations to remain price competitive.

More growth opportunities are anticipated in:

  • Applying digitisation and advanced digital technologies to solar systems
  • Expanding offerings to include residential C&I storage
  • Integrating energy storage solutions with PV systems
  • Acquiring or partnering with established developers, as well as smaller companies that have a targeted development country or a technology that can improve the operational performance of existing or future solar assets
  • Employing a multi-channel approach to effectively target the market.

Find more information on this analysis here.