Solar energy in Finland is used primarily for water heating and by the use of photovoltaics to generate electricity. As a northern country, summer days are long and winter days are short. Above the Arctic Circle, the sun does not rise some days in winter, and does not set some days in the summer. Due to the low sun angle, it is more common to place solar panels on the south side of buildings instead of on the roof. Mounting them vertically reduces the average output by 22% from mounting at a 60° angle.
The PV capacity of Finland was (2006) 4.1 MWp. Solar power in Finland was (1993–1999) 1 GWh, (2000–2004) 2 GWh and (2005) 3 GWh. There has been at least one demonstration project by the YIT Rakennus, NAPS Systems, Lumon and City of Helsinki in 2003. Finland is not a member either in the IEA's Photovoltaic Power Systems Programme or the Scandinavian Photovoltaic Industry Association, SPIA.
The objective in solar heating is 163 000 m2 collector area (1995–2010). In 2006 the collector area in operation was 16 493 m2. Solar heat in Finland was (1997–2004) 4-5 GWh and (2005) 6 GWh. Thus, Finland has installed 10% of its objective in 11 years time (1995–2010). The solar heating has not been competitive due to cheap alternatives (electricity, fuel oil and district heating) and the lack of support systems. Companies and public organizations may receive 40% investment subsidies, but private houses do not receive subsidies yet. The Finnish Solar Industries (FSI) group was established in 2001. 2006/2005 the markets grew 43%. Finland's production capacity is 16 000 m²/a. New installations were: 2 380 m2 (2006), 1 668 m2 (2005) and 1 141 m2 (2004). There are growth opportunities in the solar heating.