Solar Energy in Portugal Market

Portugal Solar Energy Market Analysis

The Portugal Solar Energy Market is expected to register a CAGR of greater than 6.5% during the forecast period.

• Over the medium term, the primary drivers of the market include rising energy demand, efforts to reduce the reliance on fossil fuel-based power generation, and the declining cost of solar PV and associated systems. Other factors, such as rising investments in solar farms and supportive government policies, are also likely to drive the solar energy market in Portugal during the forecast period.
• On the other hand, the increasing adoption of alternate clean energy sources like wind is likely to restrain the market's growth during the forecast period.
• Nevertheless, the termination of two coal-fired power plants in Portugal in 2021 provided investment opportunities for solar energy operators. The shift toward adopting renewable energy, especially solar energy, is expected to create immense opportunities for the market.

Portugal Solar Energy Market Trends

Residential Segment to Witness Significant Growth

• Solar power is a growing source of clean energy in Portugal's energy mix. At the end of 2022, solar power had a total installed capacity of 2591 MW. It represented an increase of more than 45 percent from the previous year in 2021. Further electricity generation from solar sources reached 2.54 TWh in 2022.
• Solar is expected to play a leading role in the Portuguese government's new energy plan, which includes providing 80% of the country's power demand from renewables by 2030 and 100% by 2050 and electrifying 65% of the economy by 2050.
• The need for an alternative energy source, anticipated cost savings from solar photovoltaics, and a desire to lessen the risk of climate change are the main drivers of their growing adoption in the residential sector.
• In December 2021, the Minister of Environmental and Climate Action of Portugal announced the launch of an auction for 262 MW of floating solar photovoltaic (PV) capacity to be installed at seven dams across the country. The project is expected to be fully operational by 2023.
• During the forecast period, the share of rooftop solar PV is expected to increase due to decreasing solar PV costs, supportive government policies for residential solar PV, FIT programs and incentives, and targets set by various governments for solar energy.
• Higher solar PV module efficiencies, which may increase the use of solar energy in the residential sector for power utilization, are driving the cost reductions from residential rooftop solar PV.
• Therefore, such factors may drive the demand for residential solar energy in Portugal during the forecast period.

Increasing Demand for Wind Energy Restraining the Market’s Growth

• Portugal's renewable energy mix is dominated by solar and hydropower. However, this scenario has changed with the wind energy sector's rapid growth.
• According to the Portuguese Renewable Energy Association (APREN), in 2022, approximately 2.54 TWh of electricity was generated from solar PV, witnessing an increase of approximately 46% compared to the previous year. According to the Portuguese Renewable Energy Association (APREN), in 2022, the total cumulative PV capacity accounted for approximately 2,591 MW, witnessing an increase of 45% compared to 2021.
• Renewables accounted for approximately 70% of the country's total electricity demand, and wind energy accounted for 25% at the beginning of 2021.
• At the end of 2022, Portugal's wind power installed capacity was 5,671 MW. In 2021, wind power represented 26.8% of total electricity generation. Thus, Portugal's wind energy sector is likely to hinder the market.
• In January 2021, the European Investment Bank (EIB) provided EUR 65 million and an additional EUR 47 million from BPI to finance EDP Renovaveis SA (EDPR) for the construction and operation of two onshore wind farms with a total nominal capacity of 125 MW in the districts of Coimbra and Guarda, Portugal.
• Therefore, the wind energy sector in the country grew faster than the solar energy sector during the last decade. However, it is expected to restrain the market during the forecast period.

Portugal Solar Energy Industry Overview

Portugal's solar energy market is moderately consolidated. The key players in the market market (in no particular order) include Voltalia SA, Iberdrola SA, SGS SA, Acciona SA, and Gesto Energia SA., among others.

Portugal Solar Energy Market Leaders

Portugal Solar Energy Market News

• February 2023: Copenhagen Infrastructure Partners (CIP) intends to invest EUR 8 billion in a giant offshore wind project in Portugal. It is anticipated that the wind project will have a capacity of 2 GW and will be located off the coast of the Atlantic Ocean.
• January 2023: The Portugal government announced the launch of its first offshore wind power auction by the last quarter of 2023, aiming to reach 10 GW of installed capacity by 2023.