The Great Electrification: The Power Of The Sun In The EU

Solar power is now a central pillar of the EU energy transition, but its expansion is currently threatened by falling capture prices due to supply-demand imbalances. Integrated battery storage is increasingly necessary to secure investment returns and manage grid integration.

Key Takeaways

• 1.Solar PV has become a foundational component of the EU power system, reaching 406GW capacity by end-2025.
• 2.Solar's rapid growth creates a structural supply-demand mismatch, leading to capture price erosion and curtailment risks.
• 3.Co-located battery storage is the critical enabler for sustaining further large-scale solar build-out through 2040.

Table of Contents

• Summary
• The case for solar: Homegrown and low-cost electricity supply
• Solar targets and rollout across EU and national plans
• The challenge of solar's timing mismatch with electricity demand
• Solar cannibalization and declining capture prices
• Box 1: Behind-the-meter solar and demand destruction
• Adding storage to solar PV can improve capture prices, mitigate curtailment, and potentially add revenue streams
• Solar finds its ally in batteries

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