The European Union is projected to see its first year-on-year decline in new solar energy installations in nearly a decade, according to new data released Thursday by industry group SolarPower Europe. The slowdown comes as several member states cut back financial support for rooftop solar projects amid shifting budget priorities.
The EU is expected to add 64.2 gigawatts (GW) of new solar capacity in 2025, down 1.4% from the 65.1 GW installed last year. If confirmed, the dip would mark the first decrease in annual solar growth since 2015, and a reversal from the sector’s rapid expansion in recent years—including a 51% jump in 2022.
The decline is mainly attributed to falling residential rooftop installations, which are forecast to account for just 15% of new capacity in 2025, down from an average share of around 30% between 2020 and 2023. Countries such as Germany and France have trimmed feed-in tariffs for solar energy fed back into the grid, while the Netherlands has begun scaling down incentives for households exporting surplus electricity.
The slowdown highlights how shifting political and economic priorities are impacting Europe’s energy transition. Several governments have redirected public funds toward defence and industrial subsidies, creating pressure on clean energy budgets. This trend is affecting progress in a sector that had recently become a standout in the EU’s climate and energy plans.
In June, solar accounted for 22% of the EU’s electricity generation, making it the region’s single largest source of power for that month. But the current pace of installations may not be enough to meet longer-term goals. SolarPower Europe estimates the bloc needs to reach 750 GW of solar capacity by 2030 to stay on track with climate targets and reduce reliance on Russian energy. Based on current growth, the EU is likely to fall short by about 27 GW.
While utility-scale solar projects remain strong, the slowdown in the residential segment underscores the need for clearer long-term policy signals and continued support to maintain momentum in clean energy adoption.
