Poland Rises! Becoming A European Photovoltaic Powerhouse

Poland, Europe's largest producer of hard coal, is seeking to decarbonise through renewable energy, which is crucial to the climate change mitigation agenda.

According to SolarPower Europe (SPE), Poland will end 2019 with just 2GW of installed PV capacity, while by 2022 it will already have 4.9GW, making it the third largest solar PV market in Europe.

The main reason for this growth is the booming rooftop market for domestic customers, supported by net metering schemes and government programmes that provide financial support to households. However, changes in legislation have hindered the development of this sector. At the same time, large-scale PV is rising at some pace, becoming the second strong growth point for solar deployment in Poland.

Rising energy prices and a worldwide scarcity of raw materials are helping to drive solar development in Poland

By the end of 2022, around 8GW of Poland's 12GW of cumulative installed capacity will come from specialist consumers, residential households and small businesses with government support. The boom in large-scale PV was initially driven by the tendering system under the Contract for Difference (CfD), but the main impetus is now coming from growing public support for PV, high electricity prices and the Polish industry's interest in obtaining solar corporate power purchase agreements (PPAs).

The Polish market needs renewable energy," said Eyal Podhorzer, CEO of Econergy, "Poland is 70% coal-based and is the number one coal market in Europe. Obviously, Poland wants to decarbonise as fast as possible."

Econergy is an international developer based in Israel with over 1.5GW of large scale PV projects in Poland. Although initially focused on household rooftops, Econergy has seen a huge growth in the development and construction of large-scale PV projects over the past 12-18 months, with around 4.3GW of such installations in Poland in 2022 alone.

Monthly and cumulative installed capacity of PV in Poland in 2018-2022. Only grid connection seen as an obstacle to continued rapid growth

Podhorzer says: "This is quite a large number for a country like Poland." Given Poland's northern location and poor irradiation conditions, the Eastern European country was not seen as a preferred region for PV development.

However, since the government restricted new wind projects from entering Poland two years ago, investors have shifted their development efforts to PV. This is supported by a reduction in capital expenditure on equipment prices, which can lead to parity in projects and sustainable investments.

High tariff effect: lots of money looking for opportunities to develop projects

According to SPE, the war in Ukraine, the sharp rise in global energy prices and the global scarcity of raw materials have prompted local governments and companies to make renewable energy an energy security priority, which has helped boost solar development in Poland. As a result, corporate PPAs are particularly thriving.

Podhorzer says this is similar to the situation in other European markets driven by decarbonisation and energy independence processes, however, Polish electricity prices have not risen as high as in other markets such as Romania, Spain and Italy, and Poland is less reliant on Russian gas due to its heavy reliance on coal.

Despite this, investors are increasingly interested in entering the new PV market as the government works to streamline the renewable energy development process. In addition, developers are now selling developed and pending projects to investors at a much faster pace than in the previous two years.

"A large amount of money is still looking for a portfolio of development projects in Europe, especially from new entrants with an eye on ambitious targets such as energy independence over the next decade, plus a willingness to pay more in order to connect projects to the grid as quickly as possible to take advantage of short-term high prices due to the price of electricity."