Solar PV will account for almost 80% of the 4.6TW of new renewable power expected to be added by 2030, according to the International Energy Agency (IEA).
The IEA’s Renewables 2025 report, released today, said that global renewables growth “remains strong” despite “Rising headwinds” from policy changes in the US and China.
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3,546GW of new solar PV capacity will be added globally by 2030, the IEA forecasts—77% of all the new renewable energy capacity expected. This is an increase from the 68% of all renewables added between 2019 and 2024, which solar fulfilled, and the 44% for which it accounted from 2013 to 2018.
Solar will lead the next half-decade of renewable energy due to its low costs, faster permitting and broad social acceptance compared with other renewables, the IEA said.
The IEA’s overall forecast was revised down by 5% compared with last year due to policy changes in the US and China.
The phaseout of Inflation Reduction Act (IRA) tax credits, foreign entity of concern (FEOC) restrictions on US renewable power supply chains and restrictions of solar and wind deployment on federal land saw the US forecast drop by almost 50%. Within that, the US solar PV forecast fell by almost 40%, with the IEA now forecasting around 140GW less solar capacity by 2030 than previously imagined.
China’s deployment forecast was revised down by just 5%, but the size of the market means that over 129GW less renewable energy capacity is expected to be built than before. The change is due to the government’s new policy around auctions and renewables integration.
The report also notes that the world is not on track to meet the COP28 pledge to triple total renewable energy capacity by the end of the decade.
Despite these headwinds, 2025 will be another record year for renewable energy installations. The IEA expects 750GW of new renewables capacity in its main case and up to 840GW in its accelerated scenario.
Distributed and small-scale solar PV installations are expected to expand this year, the IEA said, despite relatively negative forecasts for small-scale installations in the EU and US. SolarPower Europe said the European residential market is set to contract this year and lose 5% of its workforce, and distributed solar in the US will be hit hardest by the removal of tax incentives, the IEA added.
Residential, commercial, industrial and off-grid projects will account for 42% of all PV additions through 2030, the report forecasts, driven by high power prices in developed countries and off-grid installations in poorly connected regions to increase electricity access.
“In addition to growth in established markets, solar is set to surge in economies such as Saudi Arabia, Pakistan and several Southeast Asian countries,” said Fatih Birol, IEA executive director. “As renewables’ role in electricity systems rises in many countries, policymakers need to pay close attention to supply chain security and grid integration challenges.”
Manufacturing concentration to continue
Despite diversification efforts in the US and India, over 90% of solar manufacturing capacity will remain in China by 2030. China will also dominate the mining and refining of rare earth metals.
This “underscores” risks to supply chain security, today’s report said, even as Chinese firms continue to struggle with low prices and vanishingly small margins in recent months.
Last week, a report from Wood Mackenzie noted that new government policies in China will aim to tackle the “historic lows” in product prices, starting as early as the fourth quarter of this year.
