Europe is home to more than 400 clean tech manufacturing plants, but the distribution is uneven and a few large countries dominate the business of making equipment needed to produce green energy sources, according to the Brussel-based think-tank Bruegel’s European Clean Tech Tracker.

Germany emerges as a central hub for clean tech and hosts the highest number of clean tech manufacturing facilities overall and in almost all technologies; however, several other countries such as France, Denmark, the Netherlands, Norway and Spain are also leading players in their niches.

Germany and France have the most solar manufacturing plants with 16 and 13 facilities respectively.

Germany is far in the lead with 64 facilities to make wind generators. Spain and Denmark also show strong manufacturing presence in wind technology, with 38 and 13 facilities respectively.

Italy leads in heat pump manufacture with 27 facilities, followed by Germany, which has 24, and Czechia, which has eight facilities.

Where are clean technologies manufactured in Europe?

France’s EDF, Europe's largest nuclear power operator, plans to increase output in 2024 after a disastrous 2023 which was plagued by maintenance issues. The stress corrosion problems in the reactors of 2023 have now largely been solved. Yet one of three planned outages at 13 nuclear power plants (NPPs) might be extended, affecting up to five plants.

Despite this, Europe's nuclear sector is expected to generate 20 TWh more in 2024 than in 2022. Nevertheless, nuclear generation is still expected to be lower than pre-2022 levels due to decreasing nuclear power capacity.

The generation of power from fossil fuels in 2024 is anticipated to continue to decrease, but at a much slower rate compared to 2023. The decrease is expected to be 60 TWh due to a slight rise in overall power demand in Europe during the same period. The balance between coal and gas plants will depend on the cost competitiveness of these two sources.

Scenario for the net power generation balance change in Europe in 2023-24

Solar

Wind and solar dominate green energy generation in Europe, with solar slight ahead at the moment.

SolarPower Europe's annual progress report for solar power reveals that the EU installed 41.4 GW of solar in 2022, up 47% from the 28.1 GW installed in 2021. Despite a record-breaking 60 GW direct current (GWDC) of solar PV capacity expansion in 2023, solar power generation in Europe saw a modest increase of about 20%. This year, however, will be another story.

Rystad Energy expects continued strong additions from renewables during 2024, with solar leading growth for the first time both in terms of capacity and generation. Combined with more stable output from nuclear generation, we anticipate this will lead to a further decline in fossil fuel demand for power, according to Vegard Wiik Vollset, head of Renewables & Power EMEA Research.

Solar manufacturing expansions in Europe by 2026

Rystad Energy forecasts solar photovoltaic (PV) energy will spike by about 50 TWh in 2024 – growing for the first time more than any other generation source – due to major capacity installations across the region, with Germany leading the way. Wind power generation is also anticipated to increase in 2024. However, the growth rate will not match the last one seen in 2023, when wind energy output grew by 50 TWh thanks to additional capacity installations and a windier year, particularly in the last quarter.

In 2023 Germany shifted from being a major electricity exporter to a net importer after it closed its six high-efficiency and powerful NPPs. As a result, Germany relied increasingly on imports from France and Denmark, a deficit it is hoping to offset by boosting renewable power generation.

This year Germany is set to take the lead in the European solar power market by adding more capacity than any other country, continuing the trend of 2023.

“During 2023 Germany witnessed a record-breaking growth of over 14 GWDC, majorly driven by the installation of rooftop PV systems. About 6.5 GWDC of rooftop solar has been installed in Germany for residential use, powering approximately 1.3mn households annually. Another 3.5 GWDC has been installed in the commercial and industry (C&I) sector, and more than 70% of the added capacity was from rooftop installations, which played a crucial role in the growth of solar PV in Germany and Europe,” Rystad Energy said in a report in February.

Europe's solar PV investments to 2026

But production of solar panels in Europe is under pressure from China, which dominates the business. Although solar panel technology originated in Europe, China has long outstripped Europe in terms of scale of production and technology progress not only in the panels themselves, but also solar power manufacturing technology. European producers are no longer competitive and are going out of business.

The European solar panel manufacturing sector has called on the European Union to introduce emergency measures to safeguard local firms from the competitive pressures exerted by Chinese imports – calls that have largely gone unheeded.

Germany launched an initiative to stimulate its domestic solar industry through consumer incentives for purchasing European-made panels but that has also come off the rails.

The country's economy ministry said in March that the plan to offer solar panel manufacturers is in limbo due to a lack of consensus among the ruling coalition partners. Germany’s budget is under pressure after the constitutional court ruled that €60bn worth of funds could not be moved to cover green expenses pencilled into the budget.

The subsidies were intended to revive demand for European solar components. However, the subsidy scheme encountered stiff opposition from the pro-business FDP coalition party, which criticised the move as an expensive intervention in the market. This resistance was echoed by downstream solar developers reliant on Chinese modules, who argued that the bonus would disrupt market dynamics.

Wind

Europe is much better placed to produce wind power generators. The global wind turbine market is dominated by ten major manufacturing companies, satisfying 88% of demand. Five of those companies are headquartered in the EU: Vestas, Siemens Energy, Enercon, Nordex SE and GE Renewable Energy. China has emerged as a global competitor to the European wind industry, boasting headquarters for four of the top ten wind turbine manufacturers, including Goldwind and Envision.

However, competition in wind generation is also very stiff and in the last decade the number of manufacturers have reduced – especially in Spain and Germany – as the sector consolidates into a few big players.

As new capacity is added throughout Europe, it is expected that the generation of wind power will increase by 38 TWh in 2024, according to Rystad Energy. “However, the expected capacity additions are only around 25 GW, which is far less than what is required for Europe to achieve its ambitious decarbonisation targets,” according to the analysts.

Northern Europe leads green tech manufacturing

Northern Europe is far away in the lead when it comes to manufacturing green energy equipment. From a per-capita perspective solar energy deployment is surprisingly much stronger in North-Western European countries such as the Netherlands, Germany and Belgium than in the “sunny South”.

Nordic countries lead the deployment of wind energy, with Sweden, Denmark and Finland at the forefront. Nordic countries are also leading the deployment of heat pumps, defeating the false myth that heat pumps do not properly work in cold climates. Finally, Nordic and North-Western European countries also lead in the EV sector, according to Bruegel.

Installed solar capacity per capita (MW)

Installed wind capacity per capita (MW)

Installed heat pumps per capita (units)

“The current speed of transition, alongside total deployment, is critical for evaluating progress. This solar and wind speedometer provides a perspective on how quickly solar PV and wind are growing as a share of total electricity demand, offering a dynamic view of the energy transition between 2019 and 2022,” says Bruegel.

The Netherlands, Cyprus and Spain are the frontrunners of solar energy, while Romania, Ireland and Latvia are lagging behind. Sweden, the Netherlands and Finland are the frontrunners in wind energy, while Cyprus, Austria and Portugal are the laggards.

Share of solar (%) in electricity generation over total electricity demand

Share of wind (%) in electricity generation over total electricity demand

There is a lot more room for growth in tapping nature’s energy sources. Bruegel says that there is currently huge potential in Europe for generating more power with offshore wind, but it currently remains largely untouched, with most countries like Italy having zero installations despite possessing long coastlines. Of the 238 GW of installed wind capacity, only 12% is offshore.

“Frontrunners in this space are North Sea countries: the United Kingdom, Germany, the Netherlands, Denmark and Belgium: countries that indeed have big plans for offshore wind development in the future,” says Bruegel.

Installed offshore and onshore wind energy capacity in Europe (GW), 2022