Skip to main content


Global Solar PV Market Report

Key Regional Markets


Solar PV Capacity

2.49 GW

GDP (Current Prices) USD (2022)


GDP Growth Forecast (constant prices) (2023-2027)



Danish Krone

Country Credit Rating (S&P)
Renewable Energy capacity (2022)


Solar PV Share in Renewables (2022)


Renewable Energy Target

2030 target of reducing GHG emission by 70% from 1990 level renewable energy share to be 100% in electricity generation and 55% in overall consumption

GDP Source: IMF WEO, S&P and IRENA

Prior to 1973, over 90% of Denmark’s energy supplies were derived from imported fossil fuel. The 1973 oil crisis marked a turning point in the country’s energy policies, forcing it to diversify its energy sources. Since then, in order to be self-sufficient Denmark developed a long and hefty tradition of developing and using renewable energy.

According to Danish Energy Agency (DEA) data, although, Denmark’s energy consumption dropped by 1.5% in 2022, renewable energy consumption increased by 5.3%. Wind and solar PV production reached record levels, with 21.2TWh generated in 2022 versus 17.3TWh in 2021. The growth represents a 22% increase, accounting for nearly 60% of the nation’s electricity. Green electricity exports from Denmark increased considerably in the first half of 2022, as Denmark exported c.9.2TWh, an increase of 19% from the same period of 2021.


  • Promotion of renewable electricity through premium tariff and net-metering scheme

  • Robust funding and decarbonization strategies put forward to encourage the extensive use of renewables
  • Significant growth experienced by utility-scale solar systems attributable to subsidy-free projects


  • Upcoming producer tariffs are expected to result in significant cost increases for renewable energy plants

  • Shortage of grid connections standing out to be a substantial barrier to solar energy expansion

Renewable Energy Mix

Source: IRENA Renewable Capacity Statistics April 2023
Wind energy has been the dominant renewable source in Denmark, accounting for 61% share in the renewable mix in 2022. However, the share of wind energy went down 7% compared to 2021, which was replaced by increasing share of bioenergy and solar PV. In case of solar energy, a modest growth rate was observed in the country. In 2020, the share of solar energy in the renewable mix was 13%, which expanded to 16% in 2021 and to 21% in 2022. The increasing level of solar radiation and adoption in Denmark paired with decreasing cost of installation and operations has paved the way for profitable future of the sector in coming years.

Installed Capacity: Status and Trend

Trend in Installed Solar PV Capacity

Trend in Installed Onshore Wind Capacity - Denmark

Source: IRENA Renewable Capacity Statistics April 2023

Although the main PV market in Denmark is BAPV (Building Applied Photovoltaics) and BIPV (Building Integrated Photovoltaics), in last few years the utility-scale solar systems in the country have experienced significant growth because of subsidy-free projects financed through merchant revenues and bilateral contracts.

Between 2013-2022, the cumulative solar PV capacity of Denmark grew at CAGR of 16%, with highest annual addition of 786MW taking place in 2022. The annual capacity additions experienced a robust growth in 2022 with total solar PV capacity in Denmark reaching 2.5GW, marking a 46% year-on-year growth over 2021. Further, the recent Russia-Ukraine conflict will boost solar PV growth since nearly 75% of Denmark’s gas imports are supplied by Russia via a pipeline through Germany. In a move to ensure Denmark’s long-term energy security, the Danish government has pledged to increase the number of solar PV and onshore wind farms by 2030.

Demand Drivers

A premium tariff and net-metering are used to promote renewable electricity in Denmark, which ensures successful development levels, particularly for commercial and industrial projects. It is supported, however, by the Danish Climate Agreement for Energy and Industry, which promotes a market-driven expansion approach for solar power and onshore wind. The agreement included DKK2.5 billion being allocated in the form of subsidies for electrification and energy efficiency improvements in industry, and DKK2.9 billion for low-carbon gases. Additionally, it increased taxes on fossil fuels being used for heating buildings and introduced tax incentives for using renewable electricity. All these are part of 2020 Climate Act, which sets a target to reduce Denmark’s greenhouse gas emissions by 70% in 2030 compared to 1990 levels and climate neutrality by 2050. In 2021 the act was amended to include the emission reduction target for 2025 of 50-54%.

Recent years have seen a rapid proliferation of unsubsidized utility-scale PV projects in the country. Unsubsidized solar PV represented the lion’s share of all PV systems deployed in 2022, followed by commercial and industrial installations. Corporate bilateral PPAs are the foundation of this segment. Few notable deals that took place in the market involve large conglomerates like Telia, Telenor, Toms Group and Carlsberg signing deals to offtake considerable amount of renewable electricity thereby facilitating the construction of PPA solar plant projects.

In Denmark, the government is increasingly putting forward robust funding and decarbonization strategies to encourage extensive use of renewables. The Danish parliament and the government reached three agreements in June 2022 covering a green investment fund, an enhanced unified carbon tax, and a renewable energy package that will quadruple solar and onshore wind energy production by 2030. The fund covers €7.2 billion in investments from 2024 to 2040 prioritizing larger and longer-term investments in climate, green energy and the environment.

The carbon tax emphasises the government’s intention to decarbonize the economy, especially the commercial and heavy industrial sectors at a cost-effective pace. The proposed agreement introduces an increased CO2 tax at a rate of DKK750 per tonne of emitted CO2 for companies not covered by EU Emissions Trading System (ETS), DKK375 per tonne for companies covered by ETS and DKK1,125 per tonne for companies who are large emitters and exempted from both agreements. Mineralogical companies receive a charge of DKK125 per tonne emitted. The charge will be increased over time, from DKK350 in 2025 to DKK750 per tonne in 2030. The reform is set to reduce Denmark’s CO2 emissions by 4.3 million tonnes, representing the largest single contribution to Denmark’s 2030 climate goals since the adoption of the Climate Act.

Another reason for the high volume of utility-scale installations in 2022 is probably the upcoming tariff scheme for grid connection that will significantly increase grid connection costs. The scheme will introduce a per-MWAC grid connection charge between €17,600 and €329,000 depending on connection voltage (from 10 kV at DSO level to 400 kV at TSO level) and geographical zone (production dominated vs. consumption dominated).

Market Opportunity

The electricity sector in Denmark has successfully met long-term demand while keeping costs down by fostering competition. At the same time clean energy has always been prioritized. Supporting the same cause, in H2 2021, European Commission approved the Danish aid scheme of EUR400 million for the production of electricity from renewable energy sources including solar PV.

This aid will be provided under competitive tendering, creating an opportunity for the projects to present themselves and receive funds. The process will continue till 2024 and aid can be paid out for a maximum of 20 years after the renewable electricity is connected to the grid. The fact that solar PV has reached grid parity and LCOE of PV plants is stable, helping the case of building solar parks without subsidies. Among others, Danish renewable energy developer, European Energy, has been an active participant in Danish solar sector, accounting for significant market activity. On the other hand, another renowned developer Better Energy announced new solar PPA with 12 Danish companies in the beginning of 2022, seeking to build a subsidy-free solar plants.

Considering the dominance of wind power in the country, growth opportunities for the PV sector also lie in new high-power mixed wind-PV systems. Hybrid systems offer a plethora of benefits such as maximizing land and infrastructure use, increasing plant utilisation and reducing grid connections costs. More cost-efficient ways like the upgradation of Denmark’s enormous pool of pre-existing wind farms to PV-hybrid plants also present new venues to accelerate further growth. In January 2023, Danish renewable company GreenGo Energy announced plans to develop a 4GW hybrid solar and wind energy park in western Denmark.


Source: BNEF Global PV Market Outlook

Insights from International Energy Agency (“IEA”) indicate Denmark’s renewable electricity capacity to double during 2022-2027, led by wind and solar PV. The unsubsidized utility scale solar projects are expected to drive the solar market in coming years, while real-time self-consumption models and community solar projects would perform the supporting roles. According to a study by Norwegian research company Rystad Energy, the Nordic region has the potential to add 12.8GW of PV capacity by 2030. Denmark is predicted to be the leader in the region, adding 9GW, or three-quarters of the total projected capacity.

While the present balance of achievements in the country’s renewable agenda is positive and the ambitions for the future are high, there are also significant challenges ahead.

One of the challenges lies in Denmark’s plan to introduce producer tariffs from 2023, which will result in significant cost increases for renewable energy plants. The new tariff model will require renewable energy producers to pay for grid connections in accordance with their geographical location. This will increase the overall grid cost by more than 50%, thereby rendering most PV projects in the pipeline as uncompetitive due to unplanned charges according to the new geographical zoning principle. Energinet and several other grid companies have already developed and submitted tariff models which are awaiting the Danish Utility Regulator’s approval. Despite recent progress in solar energy, producer tariffs may prove to be a substantial barrier to further expansion.

Market operators are betting on cable pooling to tackle shortage of grid connections. The solution aims for infrastructure sharing allowing power plants use a single connection to feed the electricity they generate into the grid. This helps in the optimisation of existing grid connection points, reducing investors’ costs and the investment needs of power grid operators.

The Danish renewable sector is undergoing a major shift where unsubsidized large scale PV projects are continuously gaining market share in a market dominated by wind power. Almost 95% of the total capacity deployed in the past 2 years has been utility scale solar. The motion is primarily driven by corporations’ willingness to purchase green electricity under bilateral PPAs. PPAs signed by corporations are signed at a slightly higher price than grid electricity. In spite of this, corporations and conglomerates sign PPAs above grid prices to ensure future price protection and to raise the share of renewable energy in their final consumption. A decline in government support for solar technology will lead to an increase in PPA-backed utility-scale solar deployment in the future.