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The European Green Deal: Opportunities for Solar Companies

2023-09-13

The European Green Deal and Its Impact on Solar Companies

The so-called "European Green Deal" was introduced by the European Commission in 2019. Its goal is to reduce greenhouse gas emissions to zero by 2050, making Europe the first climate-neutral continent. To achieve this goal, the European Union is investing substantial funds and intends to significantly increase these expenditures. This initiative is supported by findings from annual IPPC reports, which already document dramatic changes. The forecasts had predicted these dramatic developments only by the end of this century. Although scientists anticipated these developments, the rapid pace of change has been surprising. For several years now, we have observed severe droughts, even in our latitudes, widespread wildfires are observed globally, and the large amounts of CO2 released further intensify the greenhouse effect. 

Therefore, the primary goal is to establish new technologies for sustainable energy production. The unstable global political situation further increases the pressure to become energy independent.

 

Overview of the European Green Deal

The measures designed to achieve these goals are diverse, affecting financial market regulation, energy supply, transportation, trade, industry, and forestry and agriculture. The baseline year for CO2 reduction measures is 1990. Initially, the target was set to reduce CO2 emissions by 40% by 2030, but this has been revised to between 50 and 55%.

 

How Solar Companies Can Benefit from the Green Deal

Since traditional energy production contributes significantly to CO2 emissions, commercial solar power producers are increasingly in the spotlight and stand to benefit greatly from the EU’s renewable energy goals.

The EU focuses on three main points: ensuring a secure and affordable energy supply within the EU, a fully integrated, interconnected, and digitalized EU energy market, energy-efficient buildings, and an energy sector that predominantly relies on renewable energy sources. To achieve these objectives, investments in green technologies are essential, which predict a bright future for solar energy in the EU.

Specifically, the EU intends to integrate energy systems into a network. It also plans to expand support for renewable energy sources, including promoting innovative technologies in the solar industry that could further enhance the efficiency of solar panels.

 

Challenges and Barriers for the Solar Industry within the Green Deal

Although the EU explicitly supports the expansion of solar energy, some member states remain hesitant and do not financially support the solar industry to the extent envisioned by the EU. While the EU's REPower-EU program has paved the way for widespread solar energy deployment, not all EU states have agreed to utilize this opportunity. However, for other states, the prospects are positive, and solar entrepreneurs can expect support for their initiatives. In Germany, both commercial and private solar plant operators receive tax relief. Commercial operators of smaller plants can also enjoy tax reductions retroactive to January 1, 2022, and look forward to less bureaucracy in the future. Specifically, tax incentives for solar investments are a step in the right direction and create a real incentive to purchase more solar panels and establish new installations or expand existing ones, in accordance with EU regulations for solar panels.

 

Future Perspectives: The Role of the Solar Industry in a Greener Europe

Experts indicate that the EU's targets are highly ambitious and challenging to achieve. Particularly in the wind power industry, the expansion of wind energy is hindered due to significant public resistance and legal barriers. Therefore, if the overarching goals remain, it will be necessary to focus on other areas, such as solar energy, which holds great potential. With rising energy prices, pressure on private households will increase, while simultaneously boosting incentives for commercial solar plant operators.

As substantial funds are being invested in research and development, we can expect that future solar installations will be even more efficient and cost-effective. Coupled with technical advancements in battery storage, digital networking, smart technologies, and additional tax and financial incentives from governments, sufficient incentives should exist for all parties to explore every opportunity to install solar systems. The solar industry is poised to benefit across all sectors, from small balcony power systems to large commercial installations.

Current sales and installation figures for solar panels and battery storage also show that the industry has evolved from a niche product in the 1990s to a mass-market suitable and mainstream society-established industry.

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