Europe’s solar heat market: A mixed picture across countries and applications
October 9, 2026
In its latest market report, Solar Heat Europe once again does an excellent job of bringing together key figures and trends from across the EU member states, while also promoting solar thermal as a clean tech made in Europe. Sales of solar thermal systems in residential markets continue to be affected by stop-start policy frameworks. As a result, the 1.18 million m2 of newly installed collector area in 2025 (830 MW) represented a 6.5 % decline compared with the previous year. The report highlights the call of EU-based manufacturers for faster implementation of the Fit for 55 package and a strong Cooling and Heating Action Plan to provide stable market signals and unlock investment in solar thermal across residential, industrial and district heating applications. The 16-page brochure is available for download online. Graphic: European Solar Thermal Market Report and Outlook 2026 of Solar Heat Europe
More than 100 factories form a strong manufacturing base in Europe
Solar Heat Europe has launched a campaign celebrating EU-made technology, showcasing more than 100 manufacturing sites across Europe. These facilities listed in the brochure represent manufacturers of solar water and air collectors, as well as PVT collectors and solar storage tanks. The association emphasized that EU-based solar thermal manufacturers already supply around 90 % of European demand and report that they could triple production capacity, avoiding the need to create a new import dependency. The industry is built on a strong network of SMEs and is recognised as a strategic industry under the EU Net-Zero Industry Act. Read more about the EU-made solar thermal technology here.
European market development in 2025
The European solar thermal market, comprising the EU, Switzerland and the UK, contracted again in 2025, due to shrinking sales for residential buildings. The decline was, however, less pronounced than in the previous year. Following a 32.3 % drop in 2024, newly installed capacity fell by a further 6.5% in 2025. A total of 830 MW of solar thermal capacity was installed, corresponding to around 1.18 million m² of collector area.
For this overview, Solar Heat Europe gathered updated sales figures for 2025 from 14 European countries including United Kingdom and Switzerland. Where no data were available, capacity was extrapolated based on the average trend on the market majority (-6.5 %).
Valérie Séjourné, Managing Director of Solar Heat Europe, stressed the sector’s policy dependency: “Europe’s climate and energy security goals will only be achieved when promoting all clean energy sources for its biggest energy demand. The EU Cooling and Heating Action Plan and the forthcoming legislative framework are key opportunities for EU leaders to give solar heat greater visibility and deployment pathways.”
Market performance varied significantly between country. Cyprus (+ 6%), France (+ 3.9%) and the Netherlands, which saw an exceptional increase driven by the commissioning of the Groningen solar district heating project (+148.6%), all posted growth in 2025. Germany, historically Europe’s biggest market, continued to feel the effects of its Heating Law, which negatively affected the building sector, resulting in a 30 % contraction. The decline was partly offset by the commissioning of eleven new district heating plants (see below). Greece, historically one of Europe’s strongest markets, remained essentially flat, as delays to a national subsidy scheme brought installations to a halt for much of the second and third quarter of the year.
Key EU wide and national market figures Source: European Solar Thermal Market Report and Outlook 2026 of Solar Heat Europe
Solar district heating: the time to act is now
“The time to act is now and solar thermal is ready to deliver,” said Guglielmo Cioni, President of Solar Heat Europe. This is particularly relevant for the 16,000 European district heating networks, as they face increasing pressure to decarbonise, in accordance with the provisions of the Energy Efficiency Directive. The Directive sets out a series of targets for the gradual transformation of district heating and cooling networks towards efficient systems.
So how to read the graph below: The first milestone is 31 December 2027. By this date, efficient district heating networks will need to source their energy from at least one of the following:
• 50% renewable energy or
• 50% waste heat or
• 75% cogenerated heat or
• 50% of a combination of renewable energy, waste heat and cogenerated heat.
The path towards efficient district heating under the requirements of the Energy Efficiency Directive 2023 Source: European Solar Thermal Market Report and Outlook 2026 of Solar Heat Europe
Germany led the European solar district heating market in 2025 with eleven new installations totalling 69,963 m2 (42 MW). The Netherlands followed, with a 37 MW solar district heating plant in Groningen included in the 2025 market statistics. The map below, regularly updated by the German research institute Solites, shows 75 solar district heating plants in Germany with a combined collector area of 339,203 m2 (222 MW). It includes the country’s largest solar district heating plant to date, located in Leipzig, with 65,208 m2 (46 MW). The plant was commissioned in July 2026. A further seven projects, representing a total collector area of with 57,727 m2, are currently in planning or construction phase.
German map with solar district heating plants in operatin and in planning Source: Solites
The report also points to solar thermal’s largely untapped potential: Heat represents roughly half of the EU’s total energy demand, yet only 27 % of it comes from renewable sources. Furthermore, solar thermal can easily be hybridised with heat pumps to relieve pressure on the electricity grid, thus supporting broader electrification efforts.
Read more:
Solar Heat Europe: https://solarheateurope.eu/
European Solar Thermal Market Report and Outlook 2026
Campaign “Solar thermal, a made in Europe clean tech”
Solites: https://www.solites.de/en/
