Solar PV

Countries and regions making notable progress to advance solar PV include:

• China continues to lead in terms of solar PV capacity additions, with 260 GW added in 2023, close to triple of previous year growth. The 14th Five-Year Plan for Renewable Energy, released in 2022, provides ambitious targets for deployment, which should drive further capacity growth in the coming years.
• The European Union is accelerating solar PV deployment in response to the energy crisis, with 61 GW added in 2023, a 45% increase compared to 2022. New policies and targets proposed in the REPowerEU Plan and The Green Deal Industrial Plan are expected to be important drivers of solar PV investment in the coming years.
• The United States included generous new funding for solar PV in the Inflation Reduction Act (IRA) introduced in 2022. In result, PV additions increased in 2023 by 70%, reaching a record 32 GW. Investment and production tax credits will give a significant boost to PV capacity growth and supply chain expansion in the coming years.
• India installed 12 GW of solar PV in 2023, one-third below 2022 growth. However, deployment is expected to ramp-up significantly in 2024 as supply-chain challenges ease and expanded auction volumes translate into projects pipeline.
• Brazil added 15 GW of solar PV capacity in 2023, close to 30% more than in a previous year. Deployment is expected to remain on this level in the medium term thanks to continuous demand for renewable energy from industry and electricity retailers.
  

Power generation from solar PV increased by a record 320 TWh in 2023, up by 25% on 2022. Solar PV accounted for 5.4% of total global electricity generation, and it remains the third largest renewable electricity technology behind hydropower and wind.

China was responsible for half of solar PV generation growth in 2023, thanks to record-breaking capacity additions in 2022 and 2023. The second largest generation growth (a 12% share of the total) was recorded in the European Union, followed by the United States (9%). Growing overcapacity in solar PV supply chain and fierce competition among producers led to 50% decrease in global PV module spot prices between December 2022 and December 2023. Low equipment prices together with continued policy support led to almost doubling of capacity additions in 2023, with almost 430 GW installed. PV module prices continued to decline in 2024 which is expected to be an important factor leading to further acceleration of global capacity growth.

Reaching an annual solar PV generation level of approximately 9 200 TWh in 2030, in alignment with the NZE Scenario, up from the current 1 600 TWh, will require annual average generation growth of around 28% during 2024-2030. This rate is similar to the expansion recorded in 2023, but maintaining this momentum as the PV market grows will require continuous effort.

Utility-scale plants were responsible for 57% of global solar PV capacity additions in 2023, followed by distributed capacity in the commercial and industrial (23%) and residential (19%) segments. Utility-scale plants growth more than doubled in 2023, driven by record installations in China, increasing this segment’s share in total PV additions from 52% in 2022 to 57% in 2023.  

The 50% decrease in solar PV module spot prices observed in 2023, was an important driver of increased investment. Utility-scale systems are the cheapest source of electricity generation in most parts of the world. However, building large-scale installations is becoming increasingly challenging in many countries due to the lack of suitable sites and complicated permitting procedures, which favours small-scale, rooftop PV systems.

Continuous support for all PV segments will be needed for annual solar PV capacity additions to increase to about 900 GW, in order to reach 6 700 GW of total installed capacity in 2030 envisaged in the NZE Scenario. Distributed and utility-scale PV need to be developed in parallel, depending on each country’s potential and needs.

The solar PV market is dominated by crystalline silicon technology, for which the production process consists of four main steps:

1. production of high purity polysilicon;
2. crystallisation into ingots and slicing into thin wafers;
3. production of PV cells;
4. assembly of PV modules.

In 2023, global solar PV cells manufacturing capacity almost doubled, polysilicon manufacturing increased close to 90%, nidyke 75% and wafer 60%. By the end of the year, the manufacturing of the lowest-capacity segment, polysilicon, reached 850 GW. China accounted for almost 95% of new facilities throughout the supply chain.

According to investment announcements by manufacturers and the expected impact of industrial policies introduced in the United States (IRA), India (Production Linked Incentive) and the European Union (The Green Deal Industrial Plan), global capacity will reach almost 1000 GW in 2030. However, despite these efforts to geographically diversify the supply chain, announced projects indicate that China is likely to maintain its 80-90% share in solar PV manufacturing capacity.

While solar PV manufacturing capacity in 2030 is expected to be above what is required to cover 2030 demand in the NZE Scenario, greater efforts are needed to increase the resilience and geographic diversification of the supply chain. 

Crystalline polysilicon remains the dominant technology for PV modules, with a market share of more than 98%. Various different types of wafers and cells are used for crystalline polysilicon solar, with some more efficient than others. The shift to more efficient monocrystalline wafers accelerated in 2022, with the technology capturing almost all crystalline PV production. In parallel, a more efficient cell design (Passivated Emitter and Rear Cell [PERC]) also expanded its dominance with almost 60% market share. Currently, manufacturers are investing heavily in retooling their plants and switching mostly to TOPCon technology, which is expected to obtain a market share of over 70% in 2024.

Policy support remains a principal driver of solar PV deployment in the majority of the world. Various types of policy are behind the capacity growth, including auctions, feed-in tariffs, net-metering and contracts for difference. The following important policy and target changes affecting solar PV growth have been implemented in the past couple of years:

• China published its 14th Five-Year Plan for Renewable Energy in June 2022, which includes an ambitious target of 33% of electricity generation to come from renewables by 2025 (up from about 29% in 2021), including an 18% target for wind and solar technologies. 
• In August 2022 the federal government of the United States introduced the IRA, which significantly expands support for renewable energy in the next 10 years through tax credits and other measures. 
• In May 2022 the European Commission proposed to increase the European Union’s renewable energy target for 2030 to 45% as part of the REPowerEU Plan (which would require 1 236 GW of total installed renewable capacity, including 600 GW of solar PV). Many European countries have already expanded their solar PV support mechanisms in order to accelerate capacity growth with a view to the 2030 targets and in response to the energy crisis caused by Russia’s invasion of Ukraine. In addition, in February 2023 the Commission announced The Green Deal Industrial Plan, aiming to support the expansion of clean energy technology manufacturing, including solar PV.  
• During COP26, held in November 2021, India announced new 2030 targets of 500 GW of total non-fossil power capacity and 50% renewable electricity generation share (more than double the 22% share in 2020), as well as net zero emissions by 2070, with solar PV being one of the main technologies used to achieve these goals. 
  

Global solar PV investments in capacity additions increased by about 30% in 2023 and surpassed USD 480 billion, marking another record year. Solar PV investment in 2023 amounted more than all other power generation technologies combined. Investment in PV is expected to grow further in the coming years thanks to ambitious government targets, policy support and increasing competitiveness. 

For more information, please see World Energy Investment 2024.

Beyond global renewable energy initiatives that include solar PV (see Renewables), there are numerous international organisations, collaboration programmes, groups and initiatives aimed specifically at accelerating solar PV growth around the world, such as:  

• The IEA Photovoltaic Power Systems Technology Collaboration Programme, which advocates for solar PV energy as a cornerstone of the transition to sustainable energy systems. It conducts various collaborative projects relevant to solar PV technologies and systems to reduce costs, analyse barriers and raise awareness of PV electricity’s potential.
• The International Solar Alliance, which is a treaty-based intergovernmental organisation that provides a platform to promote solar energy across 86 member countries in a safe, affordable, sustainable and equitable manner. 
  

The private sector’s main activity in solar PV deployment can be divided into two categories: 

• Companies investing in distributed (including rooftop) solar PV installations on their own buildings and premises – responsible for 25% of total installed PV capacity as of 2023.
• Companies entering into corporate power purchase agreements (PPAs) – signing direct contracts with solar PV plant operators for the purchase of generated electricity. Solar PV plants dominate renewables PPAs, with a share of almost 70% in 2023.