The current levels of dependence on fossil fuels, the need of reducing the carbon emissions associated with energy use and the prospects of developing a new and extremely innovative technology sector, make photovoltaics increasingly attractive. In the last years the photovoltaic market expanded extensively, especially in Germany, followed by Spain and Italy. In addition, Greece is due to be the next fast-growing market. Several incentives have stimulated the expansion, rendering the photovoltaics industry ready to expand.

However, the high production cost of electricity, due to the significant capital investment cost, is the main barrier to large-scale deployment of photovoltaics systems. Competition is increasing. New technologies are being developed. Solar photovoltaic systems today are more than 60 % cheaper than they were in the 1990s. The focus lies now on cost reduction and lowest cost per rated watt in order to reach competitiveness with all sources of electricity in the medium term. In the 1997 White Paper (1), the European Commission set a target of 3 000 MW of photovoltaic capacity to be installed in Europe by 2010.

The Figure above demonstrates the current growth. The White Paper target, already exceeded in 2006, has been more than tripled in 2008, marking the success of the European sector. In 2010 the total cumulative capacity installed in the European Union could be as much as 16 000 MW. The European photovoltaic industry currently has an important role in photovoltaic technology development, capturing about 30 % of the world market of photovoltaic modules. In 2008, the photovoltaic capacity installed in the EU was about 4 600 MW, with a total cumulative capacity of more than 9 500 MW achieved.

This illustrates an increase of 200 % with respect to 2006. Within the EU market, practically the whole of the newly installed capacity is focused on grid-connected power plants. More than 56 % of the EU-27 photovoltaic installations are located in Germany.

The leading role in photovoltaic installation is played by Germany, after the renewable energy law came into effect in 2004. Revenues from photovoltaics have climbed more than 10 times since 2003. The market stagnated somewhat in 2006 with installed capacity of 830 MW
compared with 866 MW in 2005. Nonetheless, it still accounts for over 56 % of the total EU installed capacity. There are more than 80 companies involved in production
of thin-layer technology in Germany.

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