EPIA President Winfried Hoffmann said that in sun-bathed southern Italy investments in photovoltaics would next year start to compete with electricity from the national power grid.
But problems with the administrative burden and difficulties connecting to the grid are holding the industry back.
If given sufficient initial support, photovoltaic would become competitive with other power sources in nearly three-quarters of the European Union by 2020, and could then stand on its own without subsidies, Hoffmann added.
He said solar power currently cost around 0.2-0.4 euros per kilowatt, four to eight times more expensive than fossil-fuel based power.
But the photovoltaic industry has cut costs in half every eight years and would continue to do so, while fossil-fuel based electricity will become increasingly expensive as the sector has to start buying permits to emit CO2 under the EU Emissions Trading Scheme from 2013.
EPIA expects photovoltaic power to supply between 4 percent and 6 percent of European electricity needs by 2020, up from less than 1 percent at present.
But with improved government support, that share could increase to 12 percent by 2020, helping the EU meet its goal of getting a fifth of its energy from renewable sources by the same date.