SolarPower Europe’s (SPE) mid-year report forecasts the solar market in the European Union (EU) to experience its 1st dip since 2015, with 2025 installations projected at 64.2 GW, down 1.4% from 65.1 GW in 2024. Decline in the residential rooftop solar segment is the leading driver of the projected downturn.  

Residential rooftop solar installations are being delayed even in traditionally strong markets, such as the Netherlands, Austria, Czechia, and Hungary. SPE attributes this projected drop to 2 main reasons: the decline in electricity prices since the 2022 energy crisis and the withdrawal of incentive schemes without effective replacements. Even Poland, Spain, and Germany are experiencing a decline of over 40%.  

Corporate PPAs (CPPAs), once a major driver of utility-scale solar, are also losing momentum. With falling electricity prices in 2025, buyer interest in long-term deals has declined, according to the report, leading to a 41% drop in new solar PPA signings from Q1 to Q2, after hitting a record of 7 GW in 2024. On a cumulative basis, CPPAs now exceed 20 GW. Yet, report writers argue that strengthening the policy frameworks is key to reviving the market. 

It is the utility-scale segment that continues to stay strong, contributing around half of all new capacity additions this year. Improved auction design is another leading factor for utility solar growth in the EU this year since the bloc awarded a record 20 GW in 2024, led by Germany, the Netherlands, France, and Italy, in that order, according to the EU Market Outlook for Solar Power 2025, Mid-Year Analysis.