IEA forecasts 3.6TW of new solar PV by 2031

More than half – 2TW – of the 3.6TW of new solar PV will come from utility-scale solar, while distributed solar, which includes residential solar, commercial & industrial (C&I) and off-grid systems, is set to grow by 1.5TW by 2031.

According to the IEA, low generation costs relative to other renewables and conventional technologies, combined with robust policy support, make solar PV economically attractive for developers, businesses and consumers alike.

China will remain the key market driving renewable energy growth in the coming years. However, this growth will be at a more moderate pace, as its share will drop from 60% in 2025 to 53% during the forecast period.

India, on the other hand, will see its renewables grow 2.6 times faster between 2026-2031 than it did over the previous six-year period. The South Asian country will be the second-largest contributor to global expansion, with nearly 8.5% of the global contribution until 2031.

Not only will India be the second-largest contributor to global expansion of renewables, the IEA also expects the country to be the only country outside of China able to manufacture every major component of the solar PV supply chain at scale.

ASEAN, MENA, and sub-Saharan Africa are collectively expected to triple the pace of their renewable capacity growth over the next six years, primarily through solar PV installations, while Latin America’s solar PV installations are set to decline by 2031 compared with their peak in 2026, as shown in the chart below. The decrease in new solar PV additions in the coming years will be driven by slower growth in Brazil, while Mexico, Chile and Colombia remain broadly stable.

Across the four regions, ASEAN is projected to have the highest annual solar PV additions by 2031. According to the IEA, this is driven by the region’s rapid implementation of ambitious targets across many ASEAN countries following the recent energy crisis.

If most regions will see the growth driven primarily by the utility-scale sector, this will not be the case in Latin America and Sub-Saharan Africa, where most of the PV installations will come from distributed solar in the next six years.

South Africa and Nigeria will remain the main growth markets for new solar PV in the coming years in Sub-Saharan Africa, with the two countries accounting for nearly half of the region’s new capacity.

Along with Latin America, the European Union is the only other region that will see a decrease in solar PV additions throughout the period analysed by the IEA. The US is set to have ups and downs throughout that period, with a peak of more than 50GW in 2027 before dropping to 40GW of new additions in 2031.

Energy security driving renewables growth

One of the key highlights of the IEA report is that the importance of energy security has strengthened the importance of renewables.

The ongoing war in the Middle East, initiated by the US and Israel against Iran, has brought renewables to the top of the policy agenda in many countries around the world, as the current energy crisis underscores their role in strengthening energy security and diversifying supply.

“Previously, environmental concerns were the policy priority behind the growth of renewables, whose falling costs have made them a competitive option in many markets – but today, it’s mainly energy security that is driving renewables’ expansion as more and more countries seek to reduce their exposure to imported fuels,” said IEA executive director Fatih Birol.

“The new chapter of the renewables growth story is a truly global one as their deployment spreads well beyond major markets into every corner of the world. This is making them a key pillar of the global power sector. Today, they account for a third of global electricity generation; in the next five years, they will be getting closer to half of it.”

Furthermore, the report highlights that faster implementation of auctions, grids, energy storage and permitting reforms could make the COP28 target of tripling global renewable energy capacity achievable in 2031. The main case scenario – on which the chart is based – would be short of that target, while the accelerated scenario forecasts a renewable energy capacity growth that is 20% higher than the normal forecast.

System flexibility becomes key challenge and opportunity

Renewables are expected to generate almost 45% of global electricity in 2031, up from 33% in 2025. Electricity generation from solar PV and wind combined is set to more than double between 2026 and 2031 and represent more than 28% of total power generation by 2031.

By 2029, solar PV is expected to overtake hydropower as the world’s largest source of renewable electricity.

The growth of renewables in the coming years will also require stronger grids and interconnections, affordable storage, more dispatchable supply, and enhanced demand-side flexibility in 17 countries due to their share of variable renewables in the power mix exceeding 50% by 2031.

Technical curtailment of wind and solar PV output in key markets almost doubled in both 2024 and 2025. It reached almost 200 terawatt-hours (TWh) in 2025 and could exceed 800 TWh by 2031, the equivalent of almost 8% of total variable renewable generation.

In Europe the number of negative electricity prices continues to rise, which is in itself reducing revenues for merchant projects and corporate power purchase agreements. Deployment of battery energy storage systems (BESS) is addressing some of the challenges solar PV and wind are facing but not fast enough, said IEA.

Hybridising energy storage with solar PV and wind is emerging as an attractive option for increasing system flexibility.

“Hybrid systems combining solar PV and/or wind with batteries can already deliver electricity generation costs below USD 75 per megawatt-hour in many regions, with significantly greater dispatchability than standalone solar or wind projects,” wrote the IEA, adding that hybrid systems are expected to play a growing role in the next phase of renewable energy expansion.

Finally, global grid connection queues for advanced-stage renewable energy projects increased by 60% over the past year to 3TW. Battery storage and hybrid renewable energy project applications have accounted for the entire increase, according to the IEA.

Meanwhile, stricter connection rules and queue management reforms in India, the UK and the US removed almost half of early-stage standalone wind and solar PV projects from queues, helping to prioritise more viable projects.

The IEA report can be accessed here.