Solar is a renewable energy source that has seen huge growth across the European continent, especially in 2022. RealClearEnergy reports that solar power soared by almost 50% in Europe after installing a record-breaking 41.4 GW of solar. This can power 12.4 million homes, making it a very successful feat for solar.
This can be attributed to solar being the most renewable and sustainable energy source, as discussed in our article ‘A New Sustainability Champion Emerges for Europe’. As such, many organisations and groups initiated solar projects, making them more common across the continent. Despite this growth, green banks are another institution that can push solar development. These are financial institutions that help fund clean energy projects.
On that note, here’s how these banks support solar growth.
Supporting rejected solar farm plans
Many solar farms were rejected in the past two years. The Engineer discloses that 23 solar farms’ planning permissions were refused across England, Wales, and Scotland between January 2021 and July 2022. This prevented Europe from gaining a combined energy capacity of 748MW that could’ve powered millions of homes and establishments.
The rejections were because country leaders wanted to use the land for farming instead of collecting solar energy. A possible solution is for solar farms to install panels on rooftops. Green banks can financially support this potential change of plans, especially since this may be more expensive. After all, surveying buildings’ ability to hold solar panels and install converters per establishment may require more labour.
Funding solar technicians’ training
It was earlier established that Europe successfully generated solar power in 2022. Euronews notes that they can increase solar power in 2023 if more qualified technicians install panels and connect them to the power grid.
Green banks can fund this training if an organisation launches an initiative to train solar technicians and professionals due to their commitment to helping clean energy projects. Training more personnel for installations will increase Europe’s solar growth.
Provide funds despite climate-related financial risks
Climate-related financial risks are potential risks that may result from climate change and affect financial institutions, including green banks. One example is increasing natural disasters due to rising temperatures. These disasters can destroy physical assets, like establishments, halting green banks’ operations.
Fortunately, they’re protected from these risks if they’re Basel-compliant. Wolters Kluwer outlines how the Basel framework encourages banks to examine their risks and rethink their strategies, so they can detect weaknesses and improve them. As a result, banks enhance their growth and competitiveness. The Basel committee released climate risk principles in 2022 that banks must follow to prepare themselves to manage climate-related risks. Thus, green banks that are Basel compliant can continue funding clean energy projects—including solar—no matter the climate-related problems they face.
Helping fulfil the European Green Deal
Europe has a goal to decarbonise the continent by 2050. This is called the European Green Deal (EGD), a set of proposals to make climate, energy, transport, and taxation policies fit to reduce greenhouse gases—including increasing solar energy. Since its approval in 2020, there has been little progress in achieving the EGD’s goals.
To address this, Energy Post suggests having a Regional Green Bank in Europe. This bank will provide green finance at the regional and community levels, where decarbonisation should take off. Moreover, it will create a stable market for EU-made clean technologies, furthering solar energy’s growth within the continent.
Green banks are vital in supporting solar growth. These can fund rejected solar plans and technicians’ training and help fulfil the EGD—all despite the climate-related risks it may face.