European Union member states installed a record 82 gigawatts of new solar capacity in 2025 and are on track to exceed that figure in 2026. The accelerated deployment is directly attributable to the energy security shock of Russia's invasion of Ukraine, which exposed the cost of dependence on Russian natural gas. German industry, which had arguably the most to lose from the energy transition, has been among the most aggressive adopters.
The speed of transition is creating its own challenges, including grid integration issues as renewable generation capacity grows faster than the transmission and storage infrastructure needed to use it reliably. Several European countries have experienced brief periods of negative electricity prices when renewable output exceeded demand, as well as price spikes when calm weather reduced wind generation. The intermittency challenge is driving significant investment in battery storage and green hydrogen.
