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FRANKFURT (Reuters) - Solar power panel sales rose for the first time in four years in Europe last year, but only because of a rush in Britain to get new solar power supplies hooked up to the grid before the government cuts the feed-in tariffs to be paid to electricity producers on new installations.
About 8 gigawatts (GW) of new photovoltaic generation capacity was connected up to electricity grids last year across Europe, an increase of about 15 percent on the previous year, said the Brussels-based SolarPower Europe industry association, formerly known as EPIA.
It said last year's rise, the first since 2011, was driven by demand in the UK market, where 3.32 GW of new capacity was installed in 2015, data from the UK Department of Energy and Climate Change (DECC) showed.
However, the British government confirmed in December it would cap total spending on feed-in-tariffs as well as cutting tariff rates from February 2016 and close the so-called Renewable Obligation, a support scheme aimed at utilities, to new solar PV capacity of 5 megawatts and below from April.
As a result UK demand for new installations is expected to drop sharply this year, with German solar panel maker SolarWorld, expecting the UK market to amount to just 1.7 GW of new capacity this year. Across Europe, installations are expected to drop by 6 percent this year, research firm IHS says.
"Investors need a secure political framework for generation, self-consumption and storage of solar energy," said SolarPower Europe's chief executive, James Watson.
European demand for solar panels peaked in 2011, when more than 22 GW of new generating capacity was installed to take advantage of the generously subsidised feed-in tariffs still on offer. But these guaranteed tariffs have since been cut for new installations by governments worried about the spiralling cost.
The drop in subsidies has made for a fiercely competitive market for equipment suppliers, causing a number of high-profile casualties in Europe, including former heavyweights such as Solon and Q-Cells, which was bought up by South Korea's Hanwha in 2012.
European solar companies that have avoided collapse following radical restructurings include SolarWorld, SMA Solar and Phoenix Solar, all based in Germany.
At the same time, however, the global market has shifted to other countries including the United States, China and Brazil, which according to IHS now account for more than half of the global photovoltaic equipment industry's project pipeline.
Today, eight of the world's top 10 solar module makers are Asian, with the top three -- Trina Solar, Yingli Green Energy and Canadian Solar -- based in China.
Globally, grid-connected photovoltaic installations, including roof-top installed panels in private households, rose by more than a quarter to more than 50 GW, SolarPower Europe said.
Editing by Greg Mahlich