Sharp drop in solar panel demand amid lower energy prices, political uncertainty

The demand for solar panels has fallen sharply, said ING Research in a new report published this week. Experts from the bank think this has to do with falling electricity prices. The uncertainty about the future of the scheme for sending surplus electricity to the grid also appears to be leading to the delay or cancellation of solar panel orders.

ING Research did not have exact figures on the number of solar panels, but looked other aspects, like the online search behavior of consumers. Due to the sharp rise in energy prices, interest in energy-saving measures increased enormously last year. But now the number of Google searches for solar panels has almost returned to pre-energy crisis levels.

"The declining interest clearly follows the falling electricity prices again. Consumers appear to be particularly sensitive to the consequences for their wallets when purchasing solar panels," said experts at the bank.

Turnover growth in the installation sector also now appears to have peaked, and installers have recently been less satisfied with the volume of orders in their portfolio, according to ING. Due to the enormous demand for energy-saving measures, sales growth rates of between 15 and 20 percent were recorded for several quarters in a row. But in the third quarter of this year turnover growth was less than 14 percent compared to the same period a year earlier.

According to the bank, the fact that the order books are less full is also due to declining demand from new construction. Far fewer houses have been built than the 100,000 per year government target. This is unlikely to change for the time being, the bank's economists said. ING Research estimates that the number of newly-built homes will be approximately 73,000 this year and will decrease to 65,000 next year. This will only begin to recover in 2025.

Experts previously warned of a significant contraction in construction production in 2024. This year the construction sector will grow by around 3 percent, but a contraction of 2.5 percent is expected next year. Many large infrastructure projects are currently at a standstill due to, among other things, the nitrogen emissions problem.

"Increased wages allow consumers to borrow more, which can cause sales prices of new construction to rise again," the bank said. This could lead to one small bright spot in the area of residential construction. "New construction projects that were not previously feasible due to higher construction costs are now more often seen as viable."