According to the European Energy Markets Observator, the economic crisis made utilities in Europe invest less in renewables, including solar energy. The figures show that the investment decreased by 14% in the second half of 2008 compared to the same period in 2007. But as the total electricity demand will increase by an annual growth rate of 2.4%, and fossil energy prices will still increase. We can wonder whether a European utility should invest in solar energy production.
To me, it is a strategic asset, and as the competitiveness of various renewables-based electricity generating technologies (including solar energy) is higlhly dependent of policy support, that is why my answer is yes.
Solar : the future of energies
First of all, according to European Energy Markets Observator (EEMO), in 2030, renewables would account for 55,7% of electricity generation, and solar and wind would account for 20.1% of electricity generation in 2030. Furthermore, the EEMO explains that fossil and nuclear energies would lose market shares .
This means there is a great opportunity for a European utility to develop solar production. it is also important to mention the demand, since according to the IEA, solar and wind energies will enjoy the largest proportional increase in demand in 2030.
Furthermore, Europe committed to develop the biggest market of electricity, connecting 500 million consumers. This means, developping solar production is a startegy on the mid and long term, allowing Europe to face such demand.
A matter of european energy security
Moreover, according to the International Energy Agency, From 2009 to 2035, 44% of the growth in electricity generation comes from renewables and is mainly possible thanks to government policies, showing that European utilities have a role to play. In this 44% growth, solar PV would account for one-tenth . According to the IEA renewables represent 60% of investments in new power plants, including solar energy.
Developing solar production will allow Europe to play a significant part in the energy business, and make her less dependent on fossil energies (Europe is dependent at 83% on crude imports).
Moreover, as we are facing a era of uncertainty in prices, because of prices volatility, it will help Europe ensure its energy security.
Second of all, in the mid-term, Europe has established a EU legislation on climate change. Indeed, its goal is to source 20% of its total energy from renewables by 2020. Utilities must adapt to this legislation and develop CO2-free generation through renewable energies, including solar energy.
According to the EEMO, Solar energy also offers a huge potential especially for water heating, in the short/medium term and solar photovoltaic in the longer term. Such potential is reaffirmed by the IEA which say that 70% of the growth in solar PV capacity occurs in many regions of the world, including the European Union.
As a conclusion, we can say developping solar production is strategic on the mid and long terms. It will help to decrease Europe’s dependence on fossil energies, its energetic bill, and allow her to achieve its three objectives : competitiveness, sustainability and security of supply.
At the same time, it can make Europe a leader in solar energy production like China and India. But the European Union has to be very careful, because other utilities like the chinese ones which produce solar plants at a loss and are doing what we can call « solar dumping ».