Sweden Solar Energy Market - Growth, Trends, COVID-19 Impact, and Forecast (2022 - 2027)

The Swedish solar energy market is expected to register a CAGR of more than 4.3% during the forecast period (2022-2027). The COVID-19 pandemic caused a short-term delay in projects due to a slowdown in the supply of materials and demand caused by the lockdown imposed to contain the virus. However, the sector is likely to undergo a quick recovery in the medium- to long-term. In terms of growth, factors such as the declining cost of solar PV technology and abundant sunshine in the northern part of Sweden for electricity generation are likely to drive Sweden's solar energy market. However, hydropower is the dominant source of energy generation in Sweden. The abundant resources to aid hydropower generation may restrain the Swedish solar energy market. However, scarcity of land and the fragmented nature may restrain the market as Sweden has a relatively small geographical area composed of thousands of islands.

Key Highlights

• Due to a significant decline in installation cost, the on-grid segment held a considerable market share in 2020. It is expected to witness significant growth during the forecast period.
• Sweden's target of achieving 100% renewable energy generation by 2040 is expected to create several opportunities for the Swedish solar energy market in the future.
• Alternative renewable energy sources, such as wind energy and hydropower, are expected to restrain the growth of the Swedish solar energy market during the forecast period.

Key Market Trends

The On-grid Segment Expected to Witness Significant Growth

• On-grid systems refer to the solar systems connected to the local utility grid. The local grid acts as a buffer for storing excess energy being produced, allowing one to build credit and to draw energy as a reservoir when the system is not producing enough energy to meet the demand. The country has been witnessing several such projects, and many more are in various stages of development.
• In 2020, the total solar installation capacity in the country was 1,417 megawatts (MW), higher than the installed capacity in 2019, i.e., 714 megawatts (MW).
• In June 2021, Axpo Holding AG signed a power purchase agreement to source electricity from the 18-MW Sparbanken Skane solar park, currently under construction and slated to become the largest Swedish solar park. This project will provide a major push to the solar energy market in the country once completed.
• In November 2020, Eco-Energy World announced the establishment of a new business in Sweden, where the company plans to develop a 500 MW of subsidy-free solar power plant in Sweden over the next three years. Such projects will aid in the market's growth during the forecast period.
• Therefore, owing to such projects, the on-grid segment is likely to witness significant growth in the Swedish solar energy market during the forecast period.

Alternate Renewable Energy Sources Restraining the Market’s Growth

• Sweden generated more than 50% of its total energy from renewables in 2020. It is on the path to achieving its target of 100% energy generation through renewables by 2040. The renewable energy installed capacity stood at 32,883 MW in 2020, significantly higher than in 2019 (31,156 MW).
• The increase in renewable energy installation depicts the country's effort to promote more clean energy. Moreover, the government of Sweden launched several policies and subsidies regarding renewable energy, which may attract several investments in the renewable energy sector.
• Sweden has a great potential for renewable energy, especially wind energy other than solar, due to its favorable geographic location. The Swedish government is actively encouraging renewable energy projects in the country, including solar, which may boost the growth of the solar energy market in the country.
• In March 2022, Vattenfall AB commissioned its 110-MW biofuel plant in Uppsala, Sweden, which will be fueled by wood chips, recycled biomass, and bark in different combinations.
• Similarly, in March 2022, OX2 AB submitted an application for a Natura 2000 permit for a 5.5 GW offshore wind park in waters within the Swedish Exclusive Economic Zone in the Baltic Sea.
• In March 2022, Vasa Vind started commercial operations at its 60.5 MW Raftsjohojden wind park in Jamtland County, Sweden. The plant is located in the municipality of Stromsund and is part of a 400-MW wind turbine cluster.
• Hence, owing to such factors, alternative renewable energy projects may restrain the Swedish solar energy market during the forecast period.

Competitive Landscape

The Swedish solar energy market is moderately fragmented. Some of the key players in the market include HPSolartech AB, ABB Ltd, Exeger Sweden AB, InnoVentum AB, and Vattenfall AB.

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