Background

Solar photovoltaic (PV) panels and batteries on apartment blocks, public buildings and hospitals in Ukraine keep lights, lifts and water pumps running when central power plants, transformers and high-voltage lines come under attack, providing extra resilience for basic services.

New Joint Research Centre analysis suggests the EU's 271 million building rooftops could host around 2 300 GWp (Giga-Watt-peak, a measure of maximum photovoltaic system generating capacity) of solar PV installed capacity and generate roughly 2 750 TWh of electricity per year – close to 40 % of that needed in a fully renewable EU power system by 2050. Yet only 10 % of EU rooftops currently host solar PV, even though the technology is mature and costs have fallen significantly.

The revised Energy Performance of Buildings Directive and the EU solar energy strategy under REPowerEU introduce solar-ready requirements and phased solar mandates for new and existing buildings. For solar PV systems, utility-scale and rooftops in all building types, the proposed EU goal is to reach 700 GW by 2030, from 406 GW in 2025. However, only 89 GW is rooftop solar in homes. Rooftop PV systems in Europe now cost €900 to €1 300/kWp; around €3 000-€4 000 per typical installation. Adding a battery increases the price by €4 000-€5 000. Balcony PV is cheaper in absolute terms. Small system prices vary from €200 to €1 000 for larger models with limited battery storage. Germany leads adoption of these systems in the EU at around 435 000 new registered balcony PVs in 2024. Globally, for example in Pakistan, a rapid consumer-led solar boom has added gigawatts of behind-the-meter capacity, to the point that national electricity statistics have become unreliable and utility revenues have fallen sharply.

Potential impacts and developments

Buildings are responsible for around 42 % of EU energy consumption and 36 % of energy-related greenhouse gas emissions. They can become active energy system nodes, producing, storing, and at times securing the electricity grid stability in extreme weather events, cyber-attacks, and physical attacks on grid infrastructure. Storage is central; solar PV alone produces during sunlight hours , shutting down at night. They can only provide power during grid outages if paired with grid-forming inverters and battery storage. The resilience role demonstrated in Ukraine depends on this combination, not on PV panels alone.

While policy measures are still required for vulnerable consumers and social-housing residents, balcony solar is also helping broaden the number of potential users, for example households who lack access to rooftops, and tenants who want to take their system when they move.

Cheaper solar PV systems and wider deployment transforms buildings and households from passive consumers to active producers. However, as PV generation moves behind-the-meter at scale, electricity grid operators lose supply and demand visibility, and the economics of the remaining grid, financed largely through 'volume' tariffs, comes under pressure. The grids might also not be ready to cope with bidirectional electricity flows. In addition, behind-the-meter PV also raises data governance and cybersecurity questions. Policymakers will need to address the potential impacts by: nudging consumers towards PV systems coupled with batteries; adjusting tariff and market design; and changing the incentive structure for grid planning and investment. At the same time, these new power systems will need to operate within the requirements of the Cybersecurity Directive (NIS2) and Cyber Resilience Act.

Rooftop or balcony PV cannot replace system planning, grid expansion or utility-scale clean power generation, but they could strengthen security of supply, as seen in Ukraine and Pakistan.

The EU is trying to match future equipment demand with domestic factories as encouraged by the Net-Zero Industry Act. It is suggested that accelerated balcony and rooftop deployment could encourage new and expanded European manufacturing.

Anticipatory policymaking

Treating rooftop solar and batteries as a security option implies integrating building-level renewables and storage on the same footing as gas storage targets or interconnection objectives. This would mean reflecting balcony and rooftop solar more systematically in national energy and climate plans and crisis preparedness assessments under the Internal Market for Electricity and the Gas Security of Supply Regulations. Distributed PV generation could provide both decarbonisation and energy security.

Several Member States have already moved in this direction. For example, Germany's simplified registration regime for balcony systems and reduced VAT rates on solar equipment in multiple EU countries demonstrate that barriers to entry can be lowered quickly. France is also moving forward with mandatory solar PV in commercial and industrial buildings, covered car parks, and support for collective self-consumption. These approaches offer transferable models for other Member States operating within the same EU regulatory framework.

The economics of grid financing will also require attention. As rooftop and balcony solar PV power generation rises, 'volume' network charges will collect less revenue, when grids require greater investment to cope with increasing electrification of end-uses and to manage bidirectional flows. Policymakers could press for tariff and market-design reforms that distribute network costs fairly without penalising prosumers (consumers that are also producers) or limiting deployment. Abrupt, retroactive measures should be avoided to maintain consumer confidence. Tariff design could also distinguish between those who add intermittent generation without storage from those who use batteries to mitigate negative impact on grid management.

Storage remains the key but costlier enabler. Battery prices have fallen sharply, but adding storage can still add substantially to the cost of a household system. However, the benefits of rooftop and balcony PV for both households and the electricity system can only be achieved if sufficient battery storage is put in place. Targeted policy interventions and clear price signals are therefore needed.