As was common last year in the global solar sector, 2023 proved to be a record-breaking year for Belgium’s solar industry. According to the Belgian energy association, Energie Commune, the country installed 1.8GW of new solar capacity last year, breaking the record for annual installations set in 2022 with 1.3GW of capacity and pushing the country’s total operating solar portfolio to 9.9GW.
While this figure hardly leads the European solar sector, record capacity growth is never a bad thing for the industry, and there is cause for optimism in the future for Belgium’s solar sector. According to trade body SolarPower Europe, Belgium installed around 500W of solar generation capacity per person in 2022, meeting the targets set out in its 2019 National Energy and Climate Plan (NECP). However, SolarPower Europe expects this per-capita capacity to jump to around 1,600W by the end of the decade.
In contrast, Italy's 2019 NECP set a target of approximately 800W per capita photovoltaic capacity. SolarPower Europe forecasts that by 2030, Italy will reach a level below 1200W per capita. This indicates that, on a per capita basis, Belgium's recent announcement of added electrical capacity has been impressive, with its solar industry poised for exponential growth.
The achievement of this target is attributed to a series of supportive legislations. For Belgians, policies such as rooftop solar subsidies and tax incentives make solar economically viable. This year's elections could potentially change Belgium's leadership, hence the sustainability of the recent rapid growth in the solar industry remains to be seen.
Sustained Growth: Who Leads?
In recent years, Belgium's solar industry has seen continuous growth in operational capacity.
According to data from Energie Commune, Belgium's operational solar capacity has increased annually since 2020. Between 2017 and 2018, annual solar capacity grew by 23%, followed by a 20.7% increase from 2019 to 2020. Between 2022 and 2023, there was a remarkable growth of 37.1%, reaching a new high.
Moreover, the decline in solar power generation has been much smaller. Since 2013, the largest year-on-year decrease in solar electricity production was 3.5% between 2015 and 2016.
It is noteworthy that in 2015, Flanders, the northern region of Belgium (with a population accounting for over half of the country's total), saw its annual installed capacity exceed that of Wallonia and Brussels. As illustrated in the following graph, Flanders added 69MW of new solar capacity, while Wallonia added 37MW, and the Brussels region, representing Belgium's capital, only added 4MW.
Notably, in the years 2016-2017, Flanders solidified its position among the three major regions in Belgium, with its annual capacity nearly doubling that of Wallonia in 2016 and almost tripling it in 2017. This was partly attributed to legislation particularly favorable to the solar industry in Flanders.
In November 2016, the permit process for new solar projects was streamlined, with owners of new projects requiring approval only from the distributed operators Eandis and Infrax, without the involvement of the Energy and Gas Regulatory Authority (VREG).
Although VREG still participates in issuing green energy certificates, the agency is no longer involved in the routine assessment and permitting work related to new solar power projects, thus expediting administrative procedures. This is particularly crucial for Flanders' solar industry, which relies on the distributed sector. According to the Belgian research institution EnergyVille, in 2021, the national rooftop installed capacity reached 99.6GW, with 67.6GW located in Flanders.
Legislative Changes and Capacity Records
Following these changes in the Flanders solar industry, the Belgian government implemented a series of new policies. In February 2021, the government introduced a "social electricity" measure aimed at subsidizing electricity and gas costs for some of Belgium's most impoverished users. This measure was extended until April 2022. According to the International Energy Agency (IEA) report, the government spent a total of 600 million euros (approx. 651 million USD) to provide electricity to around 765,000 people.
While direct government support for energy projects like this is financially unsustainable in the long run, it aids in accelerating Belgium's energy transition and other reforms to the energy infrastructure. As part of efforts to decarbonize the national energy structure and support meeting local energy demands, in 2022, the government reduced the value-added tax from 21% to 6% for newly installed photovoltaic modules, thermal panels, solar water heaters, and heat pumps, lowering it by 15 percentage points.
This emphasis on rooftop solar is particularly beneficial in paving the way for a new initiative, with Flanders being the epicenter of this policy reform. From 2022 to 2026, the "Aiding Sustainable Transformation through Effective Energy Renovation for Tenants" (ASTER) plan will drive investments of approximately 155 million euros (about 168.2 million USD) by Flanders' social housing companies into new rooftop solar installation programs, with minimal costs for local residents.
Under this plan, Belgian company EnergyVision will install these modules, with ASTER owning them, and local residents only paying a fee of 0.2 euros (0.22 USD) per kilowatt-hour of electricity used. The aim is not to burden local residents with installation costs based on their electricity consumption, but rather for EnergyVision to recoup costs by selling surplus electricity to the Belgian grid and using it at charging stations nationwide. For Belgium, which main relies on distributed solar, alleviating the economic burden on local communities helps drive record levels of solar capacity and electricity generation.
The graph above illustrates the significant growth in solar electricity generation in Belgium in recent years, particularly in 2022 and 2023, coinciding with the implementation of initiatives such as ASTER. Since the implementation of the ASTER plan, Belgium's electricity generation has exceeded 2000GWh in both annual summer quarters of 2022 and 2023.
It's unsurprising that solar capacity is higher during the summer months, but the magnitude of improvement in production during these two months is noteworthy. The solar capacity in the second quarters of 2022 and 2023, as well as the third quarter of 2023, all exceeded the entire year of 2013. The second quarter of 2023 marked the highest record, surpassing the total annual generation for the years 2014, 2016, and 2017.
Additionally, last year witnessed the first instance of monthly solar capacity in Belgium exceeding 100GWh.
Achieving NECP Goals
Belgium's new policies come at a time when several European countries are evaluating their renewable energy sectors. Last year, several EU countries made adjustments to their National Energy and Climate Plans (NECPs), which set renewable energy targets for EU member states until 2030.
Belgium's target was to commission 8.9GW of solar capacity by the end of 2023. Belgium easily met this target, but some countries have set more ambitious plans, such as Germany with a target of 215GW and France with a plan for 60GW. The solar capacity target in Germany's updated NECP is also more ambitious than other energy sources, with a target of 215GW, nearly double the onshore and offshore wind targets (145GW).
Meanwhile, Belgium plans to increase the share of wind energy in its energy mix in the coming years. As shown in the graph below, according to Belgium's own NECP plan, by the end of this decade, the electricity generation from the wind sector in Belgium will be more than twice that of the solar. However, the Belgian government plans to make solar play a crucial role, surpassing biomass in its energy mix by 2025 and surpassing hydropower by an order of magnitude by 2030.
This expansion will be partially funded by the European Union. In November 2023, the European Commission pledged to provide €5 billion (USD 5.42 billion) in grants and €264 million (USD 286.4 million) in loans to support various reforms and investments in Belgium, including €726 million (USD 787.7 million) for the country's REPowerEU plan. This plan is part of the EU's efforts to enhance energy efficiency, invest in grid infrastructure, and renewable energy electricity projects, aiming to reduce Europe's dependence on Russian oil.
External support for renewable energy projects comes as internal support begins to weaken. The government plans to increase the social electricity tariff by 9.3%, bringing it closer to commercial electricity prices. According to BloombergNEF data, EU countries invested approximately €31.43 billion (USD 34.1 billion) in clean energy in 2023, surpassing the United States. This trend may continue into the future, posing challenges for the Belgian government.
Belgium is one of many countries holding elections in 2024, adding to the uncertainty surrounding the composition of the current government. For the renewable energy in Belgium, the most threat may come from the success of the far-right party Vlaams Belang. According to a recent survey by De Stemming, the party currently holds a significant lead in the polls, with 27.8% of the vote, ahead of its closest rival, the nationalist party N-VA, whose polling support has dropped below 20% for the first time since 2009.
While Flanders currently contributes significantly to Belgium's solar industry, the success of Vlaams Belang in Belgium could threaten this contribution. In February of this year, Vlaams Belang Member of the European Parliament Tom Vandendriessche called for the abolition of green policies, indicating that at least his party is unlikely to support Flanders' energy transition initiatives like recent leaders, casting doubt on the future success of solar energy in the region.
Source：PV-TECH