During the years 2001-2005, a European solar radiation database was developed using a solar radiation model and climatic data integrated within the Photovoltaic Geographic Information System (PVGIS). The database, with a resolution of I km x I km, consists of monthly and yearly averages of global irradiation and related climatic parameters, representing the period 1981-1990. The database has been used to analyse regional and national differences of solar energy resource and to assess the photovoltaic (PV) potential in the 25 European Union member states and 5 candidate countries. The calculation of electricity generation potential by contemporary PV technology is a basic step in analysing scenarios for the future energy supply and for a rational implementation of legal and financial frameworks to support the developing industrial production of PV. Three aspects are explored within this paper: (1) the expected average annual electricity generation of a 'standard' 1 kW(p) grid-connected PV system; (2) the theoretical potential of PV electricity generation; (3) determination of required installed capacity for each country to supply 1% of the national electricity consumption from PV. The analysis shows that PV can already provide a significant contribution to a mixed renewable energy portfolio in the present and future European Union. (c) 2007 Elsevier Ltd. All rights reserved.