## 2 Analysis of Electricity Price Trends  
The massive expansion of PV in Europe is motivating component suppliers to expand their manufacturing capacities for PV modules, which are primarily concentrated in China. While previous years have seen a supply shortage due to various factors, the current situation is the opposite. Chinese manufacturers are producing so many PV panels that they are causing a global surplus. Up to 80 percent of global PV production is based in China. The sheer volume of panels produced, coupled with weaker demand, has led to a sharp decline in their prices. Presently, these panels have flooded the market and become so inexpensive that some people in the Netherlands and Germany are using them to clad fences. The improved availability and low cost of panels are also motivating households to install small solar power plants on their rooftops. Overall, PVs have become a more accessible and attractive option for households, leading to increased interest in their installation. The price of PV panels has significantly decreased in recent years. According to [21], the price per 1 Wp dropped from 1.4 USD/W in 2011 to less than 0.2 USD/W (see \begin{table}
\begin{tabular}{c c c} \hline \hline
**Year** & **Installed PV Capacity [GW]** & **Change between Years [\%]** \\ \hline
2000 & 0.8 & \\  
\hline \hline \end{tabular}
\end{table} 
Table 1: Installed PV capacity across the world from 2000 to 2022 [20]. Figure 1: Cumulative capacity of solar panels (photovoltaics) in gigawatts (GW) across the world. [20]. Figure 2). The boom in solar energy did not start by chance. During times of energy crises, many households began looking for options to reduce their expensive energy bills, with installing solar panels being one of the primary choices [21; 22; 23; 24]. Electricity prices in 2022 reached significant peaks due to a combination of multiple factors. These factors included geopolitical events, increased energy demand, supply chain disruptions, and climatic conditions. A detailed analysis of electricity price trends in 2022 reveals that one of the most significant factors influencing electricity prices was the war in Ukraine. This crisis led to substantial disruptions in the supply of natural gas and oil from Russia--a major energy supplier for Europe. Sanctions imposed on Russia and restrictions on gas supplies caused a sharp increase in energy prices on global markets. Since natural gas is often used for electricity generation, the rise in its price directly impacted the costs of electricity production. Following the lifting of pandemic restrictions in 2021, there was a significant revival in economic activity, which increased energy demand. Industrial sectors sought to make up for lost time and ramped up production, leading to higher electricity demand. This increased demand contributed to higher prices, as supply could not keep pace with the growing needs. The COVID-19 pandemic caused significant disruptions to global supply chains, resulting in shortages of critical components and materials necessary for the production and distribution of electricity. The shortage of components, such as semiconductors and other technologies, affected the manufacturing and maintenance of energy infrastructure, subsequently impacting the stability and reliability of electricity supplies. Extreme weather conditions also contributed to elevated electricity prices. In 2022, several extreme heatwaves and droughts were recorded, affecting the production of electricity from renewable sources, such as hydroelectric power plants. Figure 3 shows the electricity generation trends from hydropower plants in Europe for the years 2022, 2023, and 2024. The data confirm the aforementioned statement about 2022. The year 2024 currently records the highest levels of electricity generated by hydropower plants. Reduced production from renewable sources increased dependence on fossil fuels, whose prices were already high due to supply disruptions.