More Price Hikes Ahead? Europe Faces Solar-Storage Supply Shortages, And Chinese Companies Are The Biggest Winners!

The ripple effects of shipping disruptions in the Strait of Hormuz continue to shake up Europe’s energy landscape, triggering a new surge in orders for local solar and energy storage markets and further exacerbating the imbalance between supply and demand.

In March 2026, under the dual pressure of escalating geopolitical conflicts and violent fluctuations in international natural gas prices, wholesale electricity prices in many European countries surged to their annual peak, directly triggering a surge in demand for photovoltaic and energy storage products. Prices for mainstream PV modules rose in tandem, while high-efficiency PV modules and residential energy storage systems faced supply shortages. Downstream distributors and system integrators rushed to secure inventory, marking the official onset of a demand surge in Europe’s PV and energy storage market.

Electricity Prices Hit New Highs; Natural Gas Dependency Emerges as Key Divergence Factor

According to the latest data released by AleaSoft Energy Forecasting, a leading European electricity market forecasting agency, electricity prices in key European economies such as Germany, the Netherlands, Italy, and Belgium all climbed to their highest levels of the year in March 2026. In Italy, the average daily electricity price reached 168.54 euros per megawatt-hour on March 10, marking the highest single-day price in nearly a year and highlighting the sharp rise in energy cost pressures.

From a regional perspective, electricity price increases across European countries showed significant divergence, with the core root cause lying in the varying degrees of reliance on natural gas-fired power generation within each country’s domestic electricity mix. Data from the consulting firm Ember indicates that Spain, benefiting from the large-scale expansion of renewable energy sources such as wind and solar power since 2019, saw natural gas influence electricity prices during only 15% of electricity consumption periods, with price volatility far below the EU average; In contrast, Italy remains highly dependent on natural gas for power generation and system flexibility, which directly drives up marginal electricity costs. This impact reached 89%, making it the primary driver of the EU’s highest electricity price increases and fully demonstrating the critical role of renewable energy in stabilizing electricity prices.

It should be objectively noted that high wholesale electricity prices do not directly equate to improved economic viability for end-users installing solar-plus-storage systems. Supporting regulations in various countries—such as retail electricity price control policies, grid connection rules, and net metering settlement mechanisms—continue to profoundly influence user investment decisions. However, the expectation of continuously rising electricity prices has significantly heightened awareness of energy price risks and concerns about supply security among European households, businesses, and industrial entities. The core value of solar-plus-storage systems—self-generation and self-consumption, as well as cost reduction and supply security—has gained widespread market recognition, becoming the primary driver of the surge in demand.

On March 15, the UK government announced a series of measures to accelerate the expansion of clean energy to ensure the country’s energy security. These include: bringing forward the launch of the AR8 offshore wind auction to July 2026; the first-ever launch of plug-and-play solar panels for households to purchase and install on balconies or outdoor spaces.

Demand Explodes Across the Board: Surge in Orders, Structural Price Increases

The explosive growth in market demand is clearly reflected in several key industry metrics: the European PV Purchasing Managers’ Index (PMI) surged to 69, hitting its highest level since May 2025, highlighting the industry’s continued upward momentum; German energy giant E.ON revealed that demand for solar PV installations among German households has doubled compared to previous periods, while demand for complementary green energy equipment such as heat pumps and EV charging stations has also risen in tandem, signaling a comprehensive expansion of the distributed green energy ecosystem.

The surge in demand, coupled with delays in the global supply chain’s response, has rapidly plunged the European PV-storage market into a “shortage crisis.” In particular, the supply-demand gap for core products such as residential energy storage and high-efficiency modules continues to widen, with delivery times lengthening and prices rising. According to an analysis by InfoLink Consulting this week, rising natural gas prices driven by geopolitical conflicts in the Middle East have further fueled demand for certain residential PV and solar-storage systems in Europe. Currently, prices in most markets—whether for distribution or project quotations—have reached the $0.12–0.13 per watt FOB range, with expectations that prices will continue to rise after April.

A European distributor noted, “Electricity prices in some parts of Europe have surged by 50%. Last week, we couldn’t even book a truck to pick up goods in Rotterdam. The 450W all-black modules, which best suit the distribution market’s needs, and energy storage products for emergency scenarios are in short supply.”

Moreover, local European distributors are also scrambling to secure inventory. According to incomplete statistics from Polaris Solar PV Network, since the start of 2026, leading PV companies have secured over 5 GW in module orders in the European market, with a high concentration of orders among top manufacturers: LONGi Green Energy secured 2.6 GW in orders, with a single partnership with Energy 3000 alone reaching 2 GW; Tongwei signed a 1.5 GW supply agreement for high-efficiency modules with distributors in Italy and Poland; JinkoSolar has signed nearly 1 GW in high-efficiency module orders with distributors in the UK, France, Germany, Italy, and other countries.

Demand in the energy storage sector is equally robust, with Chinese energy storage companies securing major orders in the European market thanks to their technological and production capacity advantages. Since the start of 2026, Chinese energy storage manufacturers have secured a total of 4.4 GWh in photovoltaic-storage orders in Europe: Sungrow signed a 1 GWh battery energy storage system framework agreement with Switzerland’s Delta Capacity; LONGi Green Energy secured a 600 MWh energy storage order in the Western European market; and Haiboshuichuang, having established a strong presence in more than ten European countries, has secured nearly 3 GWh in megawatt-hour-scale energy storage projects.

In the short term, there are no signs of easing in Europe’s geopolitical energy conflicts; natural gas supply bottlenecks are expected to persist, and high electricity prices are unlikely to reverse anytime soon, meaning demand for solar and storage installations will remain strong. In the medium to long term, the EU’s established renewable energy and emissions reduction targets remain unchanged, and member states’ aspirations to break free from dependence on energy imports and achieve energy independence continue to grow. Consequently, the robust growth of Europe’s solar and storage market is underpinned by solid policy and demand support.

However, it is important to note that the European PV-storage market is not without challenges. It currently faces multiple policy and structural risks, such as Germany’s planned phase-out of subsidies for new residential rooftop PV projects starting in 2027. Additionally, France’s energy regulator has reduced the feed-in tariff for PV systems of 100 kW or less during the period from April to July 2026, while simultaneously scaling back subsidies for surplus electricity fed into the grid.