European solar startups are experiencing an astounding 400% surge in funding in 2023 with $6 billion in investments reported by the end of May, according to data compiled by Avnet Abacus.
Avnet Abacus, a global technology solutions provider, used Crunchbase data to conduct a comprehensive analysis of companies listed under the solar and other renewable energy categories to provide valuable insights into the level of funding flowing into the solar sector.
Dr. Sara Ghaemi, Avnet Abacus’s Technical Director, emphasized the vast potential for growth and innovation within the solar technology sector. “There is growing demand around the world, and government policies and incentives continue to support investment in this area, with engineers continually seeking new ways to make solar more efficient,” she said.
$6 billion funding in first 5 months of 2023
Europe‘s solar startups raised a total of $7.2 billion by the end of the previous year, nearly quadrupling the previous record of $1.9 billion. The momentum continues into 2023, as these ventures have already secured $6 billion in funding, representing 83% of the previous year’s total, and we are only halfway through the year.
By the end of May 2023, the European solar companies have successfully secured a staggering $6 billion in funding in stark contrast to the $1.2 billion raised during the same period in 2022. While the sector has experienced a 47% increase in funding worldwide, the United States has encountered a 7% decline in support this year.
The 400% boost in Europe underscores the immense potential of the solar industry and also positions European startups as frontrunners in the global renewable energy landscape.
Despite ongoing uncertainty in the venture capital market, investments in the European solar sector have surged, surpassing the average of $88.3 million in 2022 and $22.9 million in 2021.
The mean venture capital influx into European solar for the year 2023, which is approximately $166.1 million, outshines the global average of $116.8 million and the U.S. average of $113.8 million.
Rooftop panels dominate solar expansion
Currently, solar generates 7.6% of the EU’s electricity compared to wind’s 15.9%, despite there being almost six times more solar startups than wind energy startups in Europe.
Commercial rooftop installations are outpacing ground-mounted projects, comprising 66% of the EU’s solar capacity. Consumer interest in solar is soaring, with Google searches for solar panel costs increasing by over 300% compared to the previous year. However, while rooftop and facade panels have significant potential, large-scale photovoltaic farms will be necessary to replace fossil fuels. These farms require advanced technologies for efficient power generation at high densities.
“Rooftop and facade panels will not be enough” to replace fossil fuels as “This will require large scale photovoltaic farms, where you’re talking about megawatts of power generation. At such high power and high energy density, recent developments in silicon carbide and gallium nitride technologies are enabling power to be converted with greater efficiency than traditional silicon-based components” Dr. Sara Ghaemi said.
Electricity generation in the EU by fuel type in 2022
In 2022, 39.4% of electricity was generated from renewable energy sources, 38.7% from fossil fuels, and 21.9% from nuclear power.
Fossil fuels mix:
- Gas:19.6%
- Coal: 15.8%
- Oil: 1.6%
Renewables mix:
- Wind: 15.9%
- Hydro: 11.3%
- Solar: 7.6%
- Biomass: 4.4%
- Geothermal:0.2%
