The EU Solar Sector-Identifying Opportunities and Fraud Risks for the Consumer

When gauged against its phenomenal growth in market value and the volume of power capacity generated, the EU solar sector is an astonishing success story. Capital investments in solar PV in the EU for example have risen from around €19 billion in 2020 to around €60 billion in 2023.

Another clear indication of the sectors success can be seen in the fact that while it took until 2018 for the European Union’s solar power capacity to first surpass 100 GW, it only took an additional 4 years for this capacity to be doubled, reaching the 200 GW milestone in 2022.

Data produced by Industry leaders such as SolarPower Europe have subsequently put the cumulative installed solar PV capacity of the EU-27 Member States at 269 GW at the end of 2023, while also indicating that the growth trend is only expected to continue.

While this is impressive, there are clear signals that the heady rates of growth associated with more recent years may be about to diminish somewhat. SolarPower Europe have already estimated that a significant deployment slowdown from 53% growth in 2023 to 4% in 2024 can be observed (this amounted to a 92% slowdown in solar growth) and it is now predicting that low single-digit annual growth rates of 3-7% will become the norm between 2025 and 2028.

Unfortunately, there is little to suggest an equally significant slowdown in the willingness of those engaged in explicitly criminal operations aimed at defrauding, misleading or otherwise exploiting consumers within the solar energy sector to desist from doing so.

Although more commonly directed at individuals at household or farm level, this kind of targeting has also been directed at EU agencies overseeing or implementing funding policies related to the installation of solar panel or micro-generation technology. On occasion it has even involved Governments as the alleged perpetrators of a fraud. For an example of the latter, we can point to the 2021 case reported by Journalismfund Europe a Brussels-based independent non‐profit who focused on the potential corruption of solar energy support in the Czech Republic and Slovakia. As reported by Journalismfund Europe, the government in the Czech Republic had been postponing the changes to the law allowing the state-guaranteed price of solar electricity to match the decline in investment in solar electricity. As a result, it claimed that the state guaranteed exorbitant prices until the end of 2010 to everyone who built a solar power plant.

With respect to Slovakia the issues revolved around an abuse of the tender process which allegedly favoured Slovak oligarchs.

Another case involving abuse of the tender process was seen in April 2023 when the Integrity Authority of Hungary, which is an independent public administration body overseeing the use of EU funds within that state, found that several companies dealing in solar panels had engaged in collusive practices in European Union tenders, thereby restricting competition.

This led the Authority to refer the matter to the Hungarian Competition Authority.

In a statement on the matter from the Integrity Authority, it revealed that it had conducted an investigation ex officio into the grant applications submitted under Call for tenders no. VP6-7.2.1.4-17 entitled “Household-scale development of electricity, water supply and sewage management on small farms” of the Rural Development Programme.

According to the notification, the successful tenderer ensured, by engaging in collusive practices with two other tenderers to exclude fair market price competition, that its own bids were always the most favourable and successful bids in the tenders concerning the installation of solar panel systems.

Further evidence of more complex illegitimate practices to affect the solar sector were seen in November 2024. At that time the Hong Kong Trade Development Council (HKTDC) reported that the Chinese solar‑panel manufacturers Wuxi Suntech Power and Zhejiang Sunflower lost their legal challenges against European Union decisions that removed them from a pricing arrangement designed to avoid punitive trade duties.

It was reported that the case revolved around the 2013 agreement between the EU and most Chinese solar panel producers to counteract alleged dumping practices. Under the “minimum import price undertaking.”

More recently The European Public Prosecutor’s Office (EPPO) in Ljubljana (Slovenia) has reported that it is leading an investigation into an attempted fraud involving €340 000 in EU funds, with house searches carried out on 7 and 8 January 2025.

The EPPO investigation in this instance centres around two companies suspected of attempting to fraudulently obtain funding for the co-financing of small-scale solar electricity generation plants, under a public call by the Slovenian Ministry for Infrastructure financed by the EU’s Cohesion Fund.

According to a statement the investigation by the EPPO, the companies submitted two separate applications, presenting them as distinct projects, while both referred to the same solar power plant located on one site. This alleged misrepresentation aimed to circumvent the requirement to obtain a building permit.

The EPPO stress however that the investigation is ongoing, and therefore all persons concerned are presumed innocent until proven guilty in the competent Slovenian courts of law.

Cases not involving this level of organised, attempted, or alleged fraud of EU funds, but nonetheless related to solar panel or solar power installations could be multiplied with ease.

In one sense this is hardly surprising. An industry expending tens of billions in capital expenditure reflects or at the very least anticipates a massive level of public demand.

The unfortunate reality is therefore that despite robust provisions already being in place in terms of EU directives on public procurement that cover tenders across a range of sectors including the solar sector, fraudulent activity of this kind is increasing.

In such a lucrative environment, rogue operators, like parasites acting within a host will often insert themselves to gain maximum advantage at the expense of ordinary investors who are merely seeking access to clean sources of renewable energy that will reduce their electricity and household energy costs.

Reporting from France has shown the growth of this kind of fraudulent activity with one criminal network accused of embezzled €27 million through MaPrimeRénov’, a French public aid program for energy-efficient home renovations. Investigations there revealed fraudulent practices targeting the most vulnerable households.

According to the Irish Times reporting, the couple had €10,000 removed from their bank account after an illegitimate company successfully engaged in a fake invoice scam. Examples of this kind could be multiplied with ease.

Incidents such as these are likely to increase as applications to the Irish Government’s Micro-generation Support Scheme (MSS) which provides capital grants through the Sustainable Energy Authority of Ireland (SEAI) for solar PV installations, in the form of the Domestic Solar PV and Non-Domestic Microgeneration schemes, increase.

This is a particularly attractive option for Irish households as Micro-generation is set to play a major role in in creating opportunities for homes, schools, community groups and small commercial customers in generating and consuming their own electricity.

As the Scheme largely relies on private installation, it is also highly likely that concerns relating to the rise in fake invoice scams will have to be addressed.

In this regard it is worth noting the recommendations contained within the publication of the Irish parliaments Joint Committee on Finance, Public Expenditure and Reform and Taoiseach Report on Authorised Push Payment Fraud in October 2024.

Push payment fraud involves fraudsters tricking an individual or business to send money from their account to one controlled by a fraudster.

The Committee recommended the publication of a National Economic Crime Strategy, the development of a shared fraud database, and greater coordination and communication between Government, Gardái, the banking sector and social media companies.

Efforts to combat this activity at the household level often focus on helping consumers to become aware that malicious targeting often involves solar panel offers at suspiciously inexpensive levels. This is often allied to exaggerated claims about energy autonomy and VAT fraud where the scammer will claim that the consumer can fully recoup VAT.

In conclusion then we can say that while there is a significant and growing public demand for solar panels and solar related energy there is also a widespread and often successful attempt to abuse this demand through fraudulent practices.

To protect consumers, to maintain the integrity of the solar sector and to protect ongoing laudable goals including the sale of micro-generated solar power back to the national grid, as is the case in Ireland, vigilance is urgently required.