Role of solar energy

Why is solar PV important?

Solar photovoltaics (PV) is a very modular technology that can be manufactured in large plants, which creates economies of scale, but can also be deployed in very small quantities at a time. This allows for a wide range of applications, from small residential roof-top systems up to utility-scale power generation installations.

What is the role of solar PV in clean energy transitions?

Despite increases in investment costs due to rising commodity prices, utility-scale solar PV is the least costly option for new electricity generation in a significant majority of countries worldwide. Distributed solar PV, such as rooftop solar on buildings, is also set for faster growth because of higher retail electricity prices and growing policy support.

Where do we need to go?

The exceptional growth in PV deployment in recent years will need to continue and scale up to follow the Net Zero Emissions by 2050 Scenario, requiring continued policy ambition.

Solar PV still dominates renewable energy capacity additions

Solar PV generation increased by a record 270 TWh (up 26%) in 2022, reaching almost 1 300 TWh. It demonstrated the largest absolute generation growth of all renewable technologies in 2022, surpassing wind for the first time in history. This generation growth rate matches the level envisaged from 2023 to 2030 in the Net Zero Emissions by 2050 Scenario. Continuous growth in the economic attractiveness of PV, massive development in the supply chain and increasing policy support, especially in China, the United States, the European Union and India, are expected to further accelerate capacity growth in the coming years. The tracking status of solar PV has therefore been upgraded in 2023 from “more effort needed” to “on track”. 

Maintaining a generation growth rate aligned with the Net Zero Scenario will require reaching annual capacity additions that are close to three times higher than those of 2022 until 2030. Achieving this will require continuous policy ambition and effort from both public and private stakeholders, especially in the areas of grid integration and in addressing policy, regulation and financing challenges.

New, ambitious policies and targets introduced in the biggest solar PV markets will further accelerate capacity growth

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

China continues to lead in terms of solar PV capacity additions, with 100 GW added in 2022, almost 60% more than in 2021. 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 38 GW added in 2022, a 50% increase compared to 2021. 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. Investment and production tax credits will give a significant boost to PV capacity and supply chain expansion.  

India installed 18 GW of solar PV in 2022, almost 40% more than in 2021. A new target to increase PV capacity auctioned to 40 GW annually and dynamic development of the domestic supply chain are expected to result in further acceleration in PV growth in the near future. 

Brazil added almost 11 GW of solar PV capacity in 2022, doubling its 2021 growth. 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 270 TWh in 2022, up by 26% on 2021. Solar PV accounted for 4.5% of total global electricity generation, and it remains the third largest renewable electricity technology behind hydropower and wind. 

China was responsible for about 38% of solar PV generation growth in 2022, thanks to large capacity additions in 2021 and 2022. The second largest generation growth (a 17% share of the total) was recorded in the European Union, followed by the United States (15%). Solar PV proved to be resilient in the face of supply chain bottlenecks, high commodity prices and the increase in interest rates experienced in 2022, and achieved another record annual increase in capacity (220 GW). This should lead to further acceleration of electricity generation growth in 2023.