Diagnostic Toolkit for Reducing Regulatory Barriers to Solar, Wind and Pumped Hydro Storage in the European Union

4. Utility-scale PV

Abstract

Utility-scale photovoltaic (PV) systems represent the backbone of solar electricity generation, operating as larger installations designed to inject substantial volumes of power into the grid. These ground-mounted systems deploy extensive arrays of PV modules across open land, directly converting solar radiation into electricity at scale. Their strategic siting and design enable efficient energy production. However, their deployment often intersects with land-use planning, environmental protection, and grid connection requirements, which together shape project feasibility and investment certainty. This chapter examines the regulatory, administrative and frameworks governing utility-scale PV deployment (including auction design and Power Purchase Agreements), identifies recurrent barriers, and highlights emerging good practices to support authorities in facilitating streamlined and sustainable project development.

4.1. Characteristics of utility-scale PV

Utility-scale PV systems are predominantly ground-mounted, delivering large-scale renewable generation through installations typically exceeding 1 MW.1 Utility-scale PV systems are predominantly ground-mounted, given that rooftops or other structures lack sufficient space for the large number of panels required.2 While innovative approaches such as agrivoltaics and floating PV are capable of reaching utility scale, the vast majority of current utility-scale PV deployment is ground-mounted. Accordingly, for the purposes of this chapter, utility-scale PV is equated with ground-mounted PV and are used interchangeably.

Ground-mounted PV systems operate as large-scale, centralised generation facilities, strategically sited to maximise the contribution of solar energy to the electricity grid. These systems deploy extensive arrays of PV panels on open ground, directly converting sunlight into electricity for grid injection. By occupying ample land, utility-scale PV plants achieve high generation capacities and operational efficiencies, functioning in a manner similar to centralised thermal power plants – albeit with variability due to solar resource intermittency. The strategic siting of such facilities enables efficient energy production, and their integration into the energy mix supports the decarbonisation of multiple economic sectors (European Commission, 2022[1]).

Ground-mounted PV delivers substantial economies of scale and cost advantages over rooftop systems. Multi-megawatt ground-mounted plants benefit from bulk procurement, standardised infrastructure, and operational efficiencies, resulting in a lower levelised cost of electricity (LCOE) as well as lower maintenance costs compared to rooftop solar (Bao et al., 2022[2]) (Wild-Scholten et al., 2006[3]). By contrast, rooftop installations are limited by space, require site-specific designs, and tend to have higher unit costs due to smaller scale and bespoke construction.

Ground-mounted PV also offers greater design flexibility, operational efficiency, and ease of installation compared to rooftop systems. Panels can be oriented and spaced to optimise sun exposure, unimpeded by roof size or shading constraints, and installation is safer and more efficient since it is performed at ground level. These systems benefit from enhanced airflow, which supports cooling (Guoqing et al., 2021[4]) and can be further optimised with bifacial panel technology, collectively maximising system performance and reducing maintenance risks.

However, the extensive land requirements of ground-mounted PV introduce unique regulatory and permitting challenges. Securing suitable land can be costly, especially in urban or densely populated areas, and projects may face significant permitting hurdles, grid connection complexities, and local opposition due to land-use conflicts – factors less pronounced for rooftop installations.

Ground-mounted PV competes with other forms of land-use, especially agriculture (Bao et al., 2022[2]). To reduce the competition between agriculture and ground-mounted PV installations, there is a growing trend towards integrating both these practices. This integration involves installing solar energy systems in a way that preserves agricultural productivity for crops or livestock grazing. Known as agrivoltaics, this approach enables the dual use of land, simultaneously promoting sustainable energy generation and food production.

4.2. The potential of ground-mounted PV solar

Ground-mounted PV solar has experienced robust growth in the EU, but installed capacity remains highly concentrated among a few Member States. In 2024, the current installed capacity of ground-mounted PV solar in the EU is estimated at approximately 130 GW, 3 expanding at a compound annual growth rate (CAGR) of more than 11% since 2010, albeit with significant national variation. Figure 4.1 shows that almost half of this capacity (48%) is concentrated in Spain and Germany, with Spain’s growth driven favourable economics, abundant solar irradiation averaging over 1,600-1,800 kWh/kW per year, and regulatory stability (SolarPower Europe, 2023[5]). The top six countries – Spain, Germany, Italy, France, Poland and Greece – represent approximately 78% of the installed capacity.

When normalising for the national surface areas, the picture looks somewhat different. The countries that have installed most ground-mounted PV solar per km2 are Netherlands, Germany, Spain, Denmark and Italy (see Figure 4.1).

Figure 4.1. Current installed capacity of utility-scale PV solar

Source: For current installed capacity: GEM, TZ-SAM, OECD calculations. See Annex C.

Despite impressive growth, the technical potential for ground-mounted PV in Europe remains vastly underutilised. Even under the most stringent assumptions, the technical potential for ground-mounted PV solar is estimated at nearly 3 900 GW in Europe – equivalent to 30 times the current installed capacity. This indicates that approximately 97% of the EU’s ground-mounted PV potential has yet to be realised.4 Unlocking this potential is critical for achieving the EU’s solar targets, as ground-mounted systems account for 93% of the region’s overall PV solar potential (Castillo et al., 2024[6]).5

Realising this potential will require full exploitation of suitable land, subject to sustainability and technical constraints. Across Member States, the percentage of potential currently utilised ranges from 0.4% and 11.2% (see Figure 4.2), significant differences are also observed per region or municipality. Achieving the maximum potential would require use of the equivalent of 2.4% of the total area of the EU, subject to technical and environmental conditions.

Figure 4.2. Ground-mounted PV solar potential in the EU

Note: These numbers are based on the most restrictive scenario (“low scenario”), assuming strict land-use constraints.

Source: For current installed capacity: GEM, TZ-SAM, For potential: ENSPRESO dataset (JRC), OECD calculations. See Annex C.

Most ground-mounted PV potential is located in rural areas, highlighting the need for targeted regulatory reform at local and regional levels. A recent report at NUTS 3 level (Castillo et al., 2024[6]) indicates that 81% of the EU's ground-mounted PV potential is in rural areas, while towns and suburbs account for 17% and cities account for the remaining 2%. The scale of this opportunity, and its rural character, underscores the importance of alleviating or removing regulatory barriers – especially in land-use planning and permitting – to accelerate deployment and support the energy transition.

4.3. The relevance of auction design

Resource access auctions have become an increasingly important instrument for promoting renewable energy deployment. This is the case particularly in regions where suitable land and grid capacity are scarce. While renewable energy auctions have traditionally focused on price competition for financial support, there is a growing shift toward auctioning rights to essential resources – including grid access, public land, offshore areas, and other state-controlled assets. This evolution reflects the need to streamline project development, optimise grid access which is scarce,6 and address land-use constraints, especially for utility-scale PV solar projects in densely populated or high-demand regions.

The success of an auction, including those focused on resource access, depends critically on design choices and adaptation to local market conditions. Effective auction outcomes rely on balancing ambition with inclusivity. Poorly designed auctions – such as those with high financial prequalification thresholds – can reduce competition by excluding smaller actors. 7 Conversely, undersubscribed auctions often result when economic attractiveness is unclear, or market volatility is high. Therefore, auction design must consider market maturity, developer diversity, and project viability (UK Department for Business, Energy and Industrial Strategy, 2019[7]) (AURES, 2016, p. 5[8]).

Auction design elements – including volume, qualification criteria, pricing models, and seller liabilities – must be carefully calibrated to achieve policy objectives. Higher auction volumes can attract more bidders but may also lead to market concentration. Strict qualification requirements can ensure project quality but risk limiting participation. Remuneration models (e.g., pay-as-bid, marginal pricing, nonstandard approaches) each have distinct trade-offs in terms of cost efficiency and fairness.8 Imposing appropriate penalties for delays or non-completion supports project delivery but should not create excessive barriers for smaller players (IRENA and CEM, 2015[9])(see Figure 4.3).

Figure 4.3. Categories of auction design elements

Source: (IRENA and CEM, 2015, p. 16[9])

4.4. Regulatory barriers to ground-mounted PV solar deployment

Key strategic documents of the European Commission underline the significance of utility-scale PV solar installations for the EU’s energy transition (European Commission, 2022[1]). However, there are several barriers, including regulatory ones, which hinder the deployment of PV solar. They are discussed below.

4.4.1. Power Purchase Agreements

Power Purchase Agreements (PPAs) are increasingly essential for unlocking investment in utility-scale renewable energy. They provide long-term revenue certainty and thus support market-based deployment. PPAs have become a primary route to market for large-scale solar and wind projects, enabling producers and buyers to agree on long-term supply arrangements outside government support schemes. By guaranteeing predictable revenues over several years, PPAs reduce investor risk, facilitate project financing, and shield both producers and consumers from wholesale price volatility. This mechanism is particularly valuable as Member States move away from subsidy-driven models and seek to scale renewables in line with EU targets.

Corporate Power Purchase Agreements (CPPAs) offer direct access to renewable energy for businesses. CPPAs, negotiated between corporate buyers and renewable energy developers, allow companies to lock in electricity prices and demonstrate sustainability commitments. These contracts have grown rapidly, with volumes reaching almost 13 GW in 2024 (Figure 4.4). Increasing price volatility (see Figure 4.5), the electrification of industry and transport, and recent EU reforms that promote long-term contracts are all set to drive further demand.9

A stable and enabling legal framework is critical for realising the full potential of PPAs. To ensure broad access to PPAs, Member States should clarify the legal status of these agreements. This may require also standardising contract templates, addressing accounting and taxation issues, and ensuring efficient dispute resolution mechanisms.10 Clear guidance and regulatory certainty will encourage participation from a wide range of market actors – including smaller producers and aggregators – while supporting efficient risk allocation and system integration.

Figure 4.4. Corporate renewable PPA volume in the EU (annual additions (l) and cumulative (r) from 2013-24 (MW)

Source: WindEurope Intelligence Platform

Figure 4.5. Measure of energy price volatility (l) and commercially contracted capacity in Europe by company in 2024 (MW, top 25) ®

Source: Price-data – Ember, OECD analysis, PPAs: WindEurope Intelligence Platform

4.4.2. Spatial planning and permitting

(To undertake a self-assessment on spatial planning and permitting, see questionnaire in section 4.5, as well as spatial planning and permitting chapter)

The identification of suitable areas via spatial planning is crucial for determining where ground-mounted PV solar projects can be developed. Given the substantial land area required for ground-mounted PV, limitations in zoning or spatial availability can be decisive (European Commission et al., 2023[10]). Indeed, it has been considered to restrict or prevent ground-mounted projects in all-but-a-few Member States (European Commission et. al., 2023[11]).

4.4.3. Permitting

In terms of permitting, lengthy and complex permitting procedures are identified as a major bottleneck also for ground-mounted PV solar (European Commission et al., 2023[10]). There are large differences between Member States and the reported duration varies from one year in Bulgaria to 4 years and 6 months in Greece, while Ireland and Spain have procedures lasting more than three or even four years (European Commission, 2024[12]).

4.4.4. Environmental impact assessment procedures

(To undertake a self-assessment on EIAs, see questionnaire in section 4.5, as well as spatial planning and permitting chapter)

While EIAs are discussed in detail in Chapter Spatial Planning and Permitting, ground-mounted PV projects present unique considerations that merit attention in this context. Large-scale PV solar parks have prompted concerns regarding potential habitat degradation and broader environmental impacts (Tinsley et al., 2023[13]). The EU Environmental Impact Assessment (EIA) Directive (2011/92/EU) addresses these risks by requiring certain ground-mounted PV projects to undergo comprehensive environmental assessments. Annex I mandates EIAs for specific projects with significant impacts, while Annex II extends assessment requirements to energy projects – including solar – at the discretion of national authorities, based on set criteria (European Commission, 2024[14]). This flexibility allows Member States to tailor EIA obligations to local and project-specific factors but may also result in inconsistent implementation and outcomes. To tackle the issue, some good practices have been identified (see Box 4.1).

Box 4.1. Several good practices have emerged across Europe to improve EIA processes and promote environmentally responsible siting of ground-mounted PV projects

Spain has introduced a national environmental sensitivity mapping tool, enabling early-stage identification of locations best suited for renewable development and informing strategic siting decisions.

Germany has fostered cooperation between the solar industry and nature conservation groups, resulting in joint criteria for the environmentally sound planning of ground-mounted PV.

The Netherlands has launched an online “All in One Permit for Physical Aspects” platform, streamlining permitting for PV and wind projects. Additionally, the industry association HollandSolar has developed a code of conduct for ground-mounted solar – endorsed by environmental NGOs – which sets principles and measures that exceed legal requirements, facilitating constructive dialogue between developers, regulators, and nature organisations.

These examples demonstrate how strategic tools, collaborative standards, and streamlined permitting can support both regulatory compliance and high environmental standards in the deployment of ground-mounted PV solar.

Source: https://sig.mapama.gob.es/geoportal/; https://www.nabu.de/imperia/md/content/nabude/energie/solarenergie/210505-nabu-bswkritereien_fuer_naturvertraegliche_solarparks.pdf; (European Commission, 2024[12]); (SolarPower Europe, 27 June 2022[15]); https://hollandsolar.nl/uploads/files/gedragscode-zon-op-land.pdf

4.4.5. Grid connection

Grid connection is another major barrier for the deployment of ground-mounted PV solar. According to recent data, the average lead time for ground-mounted PV projects to connect to the electrical grid is approximately eight years, with a mean duration of around 4 years (SolarPower Europe, 2023[5]). Grid connection is discussed in Chapter 10.

4.5. Self-Diagnostic Questionnaire

4.5.1. Instructions for Use

The self-diagnostic questionnaire is designed as a practical tool for policymakers to assess the regulatory and administrative conditions affecting renewable energy deployment. Each question or set of questions targets a specific barrier identified – such as permitting delays, grid connection, and asks whether a legal or regulatory obligation exists to address it. Responses are scored on a simple 0–1 scale, with 0 representing best practice (clear legal obligation enabling efficient deployment) and 1 representing the most burdensome conditions (no enabling framework). This structure allows policymakers to systematically identify gaps, benchmark performance, and prioritise reforms based on areas where national, regional or local rules fall short of good practice.

The questionnaire is divided between questions relevant to national and sub-national authorities. In jurisdictions where energy, environmental, or planning powers are decentralised, certain national-level questions should be completed by the relevant regional or devolved authority. Sub-national questions are further distinguished between regional and local levels, depending on how permitting and infrastructure responsibilities are distributed within the Member State. Policymakers at all levels should consult internal legal frameworks to determine which authority is competent to answer each question and ensure coordination where competencies overlap.

To ensure a comprehensive evaluation of barriers to deployment in your jurisdiction for this market segment or technology, to the results from the current questionnaire, users should also use the Spatial Planning and Permitting chapter, as well as the Grid Connection and complete the relevant questionnaires, taking into account the analysis contained in the current chapter. Cross-referencing these sections will provide a complete picture of the regulatory environment and help identify priority areas for reform.

Scoring

The questions in this section are meant to enable two types of scores:

A. A score specific to a barrier within a market segment (technology): a market segment/barrier-specific score. An example is a score for permitting for PHS; and

B. A score specific to a market segment, hence including all barriers for that specific market segment: a market segment‑specific score. An example is utility-scale solar PV. A market segment/barrier-specific score forms part of the technology-specific score.

A. Market segment/barrier-specific score

This score determines the importance of a barrier for this technology. The score can be determined through the following steps:

i. Select a barrier within a market segment for analysis

ii. Score each relevant question for that aspect of the analysis (at the relevant level of government). For this scoring, one designates a score between 0 and 1.

Please note, for a scoring of the barrier Spatial planning and permitting, one needs to score the questions in this section (excluding for this market segment the questions for “permitting for small installations”), and for grid connection and flexibility, one needs to score the questions in this section.

iii. Add up the scores for each question to obtain the Market segment/barrier total score: Market segment/barrier total score = Sum(all individual questions for that barrier)

iv. Scale the Market segment/barrier total score to arrive at a (weighted) Market segment/barrier score, namely a score between 0 and 6 (see Annex C):

Market segment/barrier score =

(Market segment/barrier total score) x $\frac{6}{\mathrm{N}\mathrm{u}\mathrm{m}\mathrm{b}\mathrm{e}\mathrm{r}\mathrm{ }\mathrm{o}\mathrm{f}\mathrm{ }\mathrm{q}\mathrm{u}\mathrm{e}\mathrm{s}\mathrm{t}\mathrm{i}\mathrm{o}\mathrm{n}\mathrm{s}\mathrm{ }\mathrm{s}\mathrm{c}\mathrm{o}\mathrm{r}\mathrm{e}\mathrm{d}}$

B. Market segment-specific score

The next step is to combine the (Weighted) Market segment/barrier scores to arrive at a Market segment-specific score. The score can be determined by adding up the Market segment/barrier scores and divide them by the number of barriers:

Market segment-specific score = $\frac{\mathrm{T}\mathrm{e}\mathrm{c}\mathrm{h}\mathrm{n}\mathrm{o}\mathrm{l}\mathrm{o}\mathrm{g}\mathrm{y}-\mathrm{B}\mathrm{a}\mathrm{r}\mathrm{r}\mathrm{i}\mathrm{e}\mathrm{r}\mathrm{ }\mathrm{s}\mathrm{c}\mathrm{o}\mathrm{r}\mathrm{e}\mathrm{s}\mathrm{ }}{\mathrm{N}\mathrm{u}\mathrm{m}\mathrm{b}\mathrm{e}\mathrm{r}\mathrm{ }\mathrm{o}\mathrm{f}\mathrm{ }\mathrm{b}\mathrm{a}\mathrm{r}\mathrm{r}\mathrm{i}\mathrm{e}\mathrm{r}\mathrm{s}}$

Questions

 

Questions	Scoring of answers
National level
Does the legal and regulatory framework clearly permit Power Purchase Agreements (PPAs) for renewable energy and addressing key accounting and taxation issues to ensure regulatory certainty for all market actors?	Yes, PPAs are explicitly legal, with clear guidance on contract types (including standardised templates) and comprehensive rules on accounting and taxation, ensuring regulatory certainty.	0
	PPAs are generally permitted, but guidance on contract forms, accounting, or taxation is partial or ambiguous, creating some uncertainty for market actors.	0.5
	There is no clear legal basis for PPAs.	1
Spatial Planning (See section 4.4.2)
Do land-use classifications restrict ground-mounted PV installations to limited zones (e.g., industrial land)?	No land-use classifications are predefined that restrict land-use for ground-mounted PV installations.	0
	Ground-mounted PV installations are prohibited in certain land-use classifications, moderately restricting PV installations in designated areas.	0.5
	Ground-mounted PV installations are entirely restricted or heavily prohibited across most land-use classifications.	1
Can a utility-scale PV solar project be classified as being of overriding public interest?	Utility-scale PV projects are automatically granted "overriding public interest" status	0
	Utility-scale PV projects can be classified as "overriding public interest," but this is not automatically granted and requires additional documentation or justification	0.5
	Utility-scale PV projects cannot be classified as overriding public interest or whether they may be covered is unclear	1

References

[8] AURES (2016), Pre-qualifications and penalties.

[2] Bao, K. et al. (2022), A bottom-up GIS-based method for simulation of ground-mounted PV potentials at regional scale, https://www.sciencedirect.com/science/article/pii/S2352484722007429?via%3Dihub.

[6] Castillo, C. et al. (2024), Renewable Energy production and potential in EU Rural Areas, https://publications.jrc.ec.europa.eu/repository/handle/JRC135612.

[12] European Commission (2024), Guidance to Member States on good practices to speed up permit-granting procedures, https://energy.ec.europa.eu/document/download/ad850f73-ab84-4ce1-9e66-7430f8f0c7e5_en?filename=SWD_2024_124_1_EN_autre_document_travail_service_part1_v3.pdf.

[14] European Commission (2024), Interpretation of definitions of project categories of Annex I and II of the EIA Directive.

[1] European Commission (2022), EU Solar Energy Strategy, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2022%3A221%3AFIN&qid=1653034500503.

[11] European Commission et. al. (2023), RES Simplify, https://op.europa.eu/en/publication-detail/-/publication/949ddae8-0674-11ee-b12e-01aa75ed71a1.

[10] European Commission et al. (2023), Technical support for RES policy development and implementation – simplification of permission andadministrative procedures for RES installations (RES Simplify), https://op.europa.eu/en/publication-detail/-/publication/949ddae8-0674-11ee-b12e-01aa75ed71a1.

[4] Guoqing, L. et al. (2021), Ground-mounted photovoltaic solar parks promote land surface cool islands in arid ecosystems, https://www.sciencedirect.com/science/article/pii/S2667095X21000088.

[9] IRENA and CEM (2015), Renewable Energy Auctions – A Guide to Design.

[5] SolarPower Europe (2023), EU Market Outlook for Solar Power 2023-2027, https://www.solarpowereurope.org/insights/outlooks/eu-market-outlook-for-solar-power-2023-2027.

[15] SolarPower Europe (27 June 2022), Simplyfing the permitting process in Italy and Europe to accelerate the deployment of renewables, https://www.elettricitafutura.it/public/editor/News/2022/220627_JB_RES%20Simplify%20Webinar.pdf?utm_source=chatgpt.com.

[13] Tinsley, E. et al. (2023), Renewable energies and biodiversity: Impact of ground-mounted solar photovoltaic sites on bat activity, https://doi.org/10.1111/1365-2664.14474.

[7] UK Department for Business, Energy and Industrial Strategy (2019), Rapid Evidence Assessment: The Role of Auctions and their Design in Renewable Energy Deployment; A report by Technopolis Ltd on behalf of BEIS.

[3] Wild-Scholten, M. et al. (2006), A cost and environmental impact comparison of grid-connected rooftop and ground-based PV systems.

Notes

← 1.  Following established conventions (e.g., IEA, NREL, TZ-SAM, and Global Energy Monitor), we classify PV installations above 1 MW as utility-scale.

← 2.  Indeed, the segmentation used by SolarEurope (see previous footnote) equates ground-mounted to utility-scale. However, it is important to note that not all ground-mounted solar is utility-scale, and conversely, not all utility-scale projects are ground-mounted.

← 3.  According to the OECD database (see Annex C), which uses data from Eurostat, GEM, IRENA, TZ-SAM and EMBER.

← 4.  The ENSPRESO dataset from the Joint Research Centre (JRC) provides technical potential estimates for ground-mounted PV solar under three scenarios: low, medium, and high. These scenarios are based on different assumptions about land availability and restrictions, which are derived from GIS-based land-restriction analyses.

← 5.  The share of rooftop PV has traditionally been around 50% of the total PV solar installed capacity. However, its share has increased to over 60% in 2024 due to a growth of more than 28% per year since 2019.

← 6.  In this context aligning auctions with grid planning – by, for example, bundling projects with grid upgrades – can help resolve infrastructure bottlenecks and accelerate deployment.

← 7.  Apart from design choices and country-specific goals and circumstances, achieving renewable energy auction goals will also depend on the existence of several conditions such as sufficient competition, low-cost financing, institutional capacity, grid access and bidding procedures, a clear communication strategy and a participatory approach, and contracting schemes (UK Department for Business, Energy and Industrial Strategy, 2019, p. 23[7]).

← 8.  Three main approaches to remunerate winners exist in renewable energy auctions: (i) Pay-as-bid pricing: This is the most common approach, where each project developer is paid based on their own bid. While cost-effective, bidders face the risk of underbidding, which can jeopardize their ability to fulfil contracts.(ii) Marginal pricing schemes: All winning bidders receive the same price, determined by the highest accepted bid. This encourages bidders to reveal their true costs but can be criticized for potentially overpaying, leading to concerns about fairness and burdening consumers. (iii) Nonstandard pricing schemes: These involve unique methods, such as ex-post negotiations between the auctioneer and the winner, but they can be seen as less transparent and fair.

← 9.  For instance, article 4 of RED III requires Member States to establish a framework, which may include support schemes and measures facilitating the uptake of renewables PPAs, Moreover, the new EU Electricity Market Design (EMD) (Regulation EU/2024/1747) also instructs Member States to encourage the use of PPAs (see article 19a (1)).

← 10.  Commission Recommendation on speeding up permit-granting procedures for renewable energy projects and facilitating Power Purchase Agreements (C/2022/3219).