Solar’s Boom in Europe Is Reaching Places Once Deemed Too Dark

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(Bloomberg) — For decades, Europe’s renewable energy map looked straightforward: solar was mostly used in the sunny south, while the north relied on wind. But plunging equipment costs and higher electricity prices have made solar projects viable in places once considered too dark, cold or remote to pay off.

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Large solar farms are being built around the Arctic Circle in the Nordics, rooftop panels are spreading across northern Scotland and the technology has even found a role in the notoriously cloudy Faroe Islands in the Atlantic Ocean. Its rise is giving governments another way to electrify their economies while producing more energy at home.

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Across the Nordic region, for the first time, investors and utilities added more new solar capacity than wind in 2025, a lead expected to continue this year, according to BloombergNEF. Governments have upgraded their own forecasts as installations exceed expectations. Sweden reached its original 2030 solar target in 2023 and is already close to meeting a newer, more ambitious goal. Finland hit its end-of-decade target six years early.

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“The question isn’t whether solar works this far north anymore,” said Warren Campbell, chief executive officer of Swedish solar developer Alight AB. “It’s how much we’re going to build.”

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Developers are already planning the next wave of projects. Companies have proposed at least another 300 megawatts of solar in Finland’s northern Lapland region. Projects of around 600 megawatts are seeking grid connections in the north of Sweden. 

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The industry’s momentum in Europe’s northern flank is in sharp contrast to its struggles further south. So much solar has been installed in Spain that power prices are plunging and investors get very little or no return at all for their buck. 

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But in the Nordics, the shift has been driven by a sharp improvement in economics. Panels and related equipment costs in Europe have fallen 30% since 2021 according to Aurora Energy Research, while higher electricity prices have made projects far more attractive. Nordic wholesale rates averaged about €11 per megawatt-hour in 2020 before surging to more than ten times that level during the energy crisis that followed Russia’s invasion of Ukraine in 2022. They averaged €79 during the first six months of this year.

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Few projects illustrate that transformation better than Exilion’s Simo solar park, just south of the Arctic Circle. Tommi Riski, the company’s director of business development and electricity markets, says that in the early days of the project, the typical response was “Who the hell builds a solar plant in Lapland?”

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Less than three years later, the €40 million ($46 million) project is generating electricity for almost 22 hours a day at the height of summer. 

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The park earns most of its revenue during the summer months. The European Commission’s solar calculator show that a project in northern Finland would generate around 82% of its annual output between April and September. For a similar project in Madrid, it would be 58%.