Austria’s photovoltaic (PV) capacity additions fell by approximately 20% year-on-year in the first quarter of 2025 compared to the same period last year, according to preliminary industry estimates released by PV Austria on Wednesday.
The decline continues a downward trend observed in 2024, when the sector’s momentum faltered. A report by regulatory authority E-Control showed Austria added 497 MW of PV capacity in the first three months of 2024, but demand weakened significantly by year-end, with total new installations reaching 2.2 GW—down from nearly 2.5 GW in 2023. The first-quarter data for 2025 suggests the slump is deepening.
PV Austria attributed the decline to policy shifts by the current government. Despite referencing “affordable energy” goals over 20 times in its plans, the administration, which took office in March 2025, has reversed course on its stated commitment to “affordable energy”—a target mentioned over 20 times in government planning documents.
Since taking office in March 2025, the government has terminated value-added tax (VAT) exemptions for small-scale PV systems—a policy originally set to remain in place until year-end. PV Austria criticized the move, arguing the government’s justification—using funds to balance the budget—relied on “dubious estimates of potential additional tax revenues.”
Simultaneously, the government extended and tightened the so-called Electricity Contribution for Energy Crisis (EKB-S), a measure PV Austria says disproportionately impacts medium-sized domestic power producers. Additionally, all environmental subsidies were slashed. These policy shifts have dealt a severe blow to Austria’s PV sector, which had already shown signs of stress in 2024.
“Instead of leveraging a growing renewable energy market to secure additional budget funds, successful businesses are being penalized,” Herbert Paierl, CEO of PV Austria, stated. “Those now strangling PV and energy storage companies will later face massive job losses and will have to pay exorbitant prices to import electricity from abroad.”
PV Austria attributed the decline to policy adjustments by the current government, which took office in March 2025. Despite referencing “affordable energy” goals over 20 times in its agenda, the government immediately scrapped a value-added tax (VAT) exemption for small-scale PV systems—a policy originally set to last through year-end. The association argued the move relied on “dubious estimates of potential tax revenue gains” to balance the budget.
The government also extended and tightened the so-called Electricity Contribution for Energy Crisis (EKB-S), disproportionately impacting mid-sized domestic power producers, PV Austria said. Additionally, all environmental subsidies were slashed, dealing a severe blow to the sector.
“Instead of leveraging the growing renewable energy market to raise additional funds for budget consolidation, successful businesses are being penalized,” Herbert Paierl, CEO of PV Austria, warned. “Those now strangling PV and energy storage firms will later face massive job losses and costly electricity imports.”
PV Austria urged the government to finalize the adoption of the Electricity Industry Act (ElWG) and the Renewable Energy Expansion Acceleration Act (EABG), which are critical for legally advancing energy system restructuring and delivering affordable energy. “This does not require additional state budget funds—just legal certainty,” Paierl stressed. “If the sector already faces severe budget cuts and loss of planning security, at least the announced laws must be passed by summer.”
Currently, confidence in stable regulatory frameworks is rapidly eroding in Austria’s PV sector. Some projects have been halted, and financing costs have surged. PV Austria warns that failing to achieve affordable energy goals through such measures will have severe consequences for Austria’s industry. Thousands of jobs could be lost, representing “a setback for Austria as a hub for green technology innovation.”
The association urges the government to finalize the adoption of the new Electricity Industry Act (ElWG) and the Renewable Energy Expansion Acceleration Act (EABG), which are critical for legally advancing energy system restructuring and delivering affordable energy. Paierl stressed that these acts require no additional state budget funding but rather legal certainty. “If the sector already faces severe budget cuts and planning insecurity, at least the announced laws must be passed by summer,” he urged.
Currently, confidence in stable regulatory frameworks is rapidly eroding within Austria’s PV sector. Some projects have been halted, and financing costs are rising. PV Austria warns that failing to achieve affordable energy goals under such conditions will have severe consequences for Austria’s industry. “Thousands will lose jobs, representing a setback for Austria as a hub for green technology innovation,” the association cautioned.
