Demand for wind and solar power in Europe has slowed, orders have cooled, and photovoltaic companies are facing pressure on shipments.

According to a report by the European Observatory for Climate Neutrality (ECNO), a combination of factors, including grid bottlenecks, permitting delays, and limited flexibility, is slowing the growth of solar PV and wind power in Europe's energy mix.

This think tank's flagship annual report, which tracks progress toward carbon neutrality in Europe, shows that while the share of fluctuating renewable energy in Europe's electricity generation is expected to reach 30% by 2025, growth since 2020 has been "too slow" to meet the EU's target of 58% by 2030.

Although the total new installed capacity of wind and solar power in 2024 reached approximately 70 GW, in line with expectations, the report points out that this growth was primarily concentrated in solar power, reaching 57.5 GW. Wind power installations in 2024 were about 2 GW lower than in 2023, and because wind power has a higher capacity factor than PV (i.e., generates more electricity for the same installed capacity), this slowdown resulted in a much larger-than-expected decline in overall renewable energy generation.

ECNO identifies several factors contributing to this slow growth. The report states that grid investment, battery storage, and the adoption of smart meters remain insufficient. It also emphasizes the need to expedite approval processes, strengthen integrated grid planning, and provide stronger incentives to promote the flexibility of non-fossil energy, thereby elevating renewable energy to the required level.

For example, while European grid investment continued to grow from 2020 to 2025, the pace of progress remained too slow. The report estimates that the distribution network sector alone needs an annual investment increase of 12% to 25% to meet the demands of renewable energy development.

Although battery storage capacity has been increasing on the supply side, it remains below the level required by the European Commission for 2030.

Meanwhile, EU and member state policies have made inconsistent progress in supporting renewable energy development. Some EU-level policy initiatives, such as the Net Zero Industry Act (NZIA), provide an "important framework" for renewable energy, but in other areas, policy support has been limited.

Regarding the power grid sector, the European Climate Neutrality Observatory points out that the EU's power grid governance system is fragmented, with top-level EU rules, national regulatory systems, and member states' responsibilities disconnected. Power for grid financing and planning decisions is primarily held by individual member states, hindering the formation of a unified approach.

The report also notes: "Therefore, recent EU guidelines and legislative proposals on accelerating grid and energy storage approval processes and designing electricity pricing to incentivize efficient electricity use and end-user flexibility are crucial, but currently insufficient."

In response, the report emphasizes the critical importance of the EU's planned electricity market integration white paper, which will effectively promote EU electricity market integration, enhance the absorption capacity of renewable energy and flexible resources, and reduce the overall operating costs of the power system.

Simultaneously, member states urgently need to coordinate grid planning with new energy capacity deployment, expedite project approvals, and increase investment in transmission and distribution networks.

Against the backdrop of accelerated clean energy transition, the report also highlights another major risk facing the EU: its reliance on Chinese companies for key raw materials, battery components, photovoltaic inverters, and various core production auxiliary materials continues to rise.

The report states, "The problem of dependence on multiple supply chains exposes deep-seated structural development challenges in Europe. Europe's long-term economic resilience and industrial competitiveness depend on its ability to reduce fossil fuel imports, diversify core supply chains, and accelerate the transition to a carbon-neutral economy." The report also mentions that the EU has already introduced relevant measures to address this risk.