Solar energy is no longer a growing renewable energy technology, but rather a 'kickstart' for the world's energy transition, according to the report carried out by Wood Mackenzie. In 2023, solar energy reached 1,5 TW installed worldwide and another 3 TW of capacity is expected in the next ten years.
This year, the market will need to keep an eye on several important trends in the sector, such as slowing growth in several key markets and challenges for the solar industry. By 2024, solar will evolve from a rapidly developing sector to a consolidated industry, marking a transition to more moderate growth.
According to the analysis, if the total solar capacity in the world multiplies over the next ten years, per year, growth will begin to slow in 2024. The average annual growth from 2019 to 2023 was 28%, including a growth of 56% in 2023. With this analysis, the institute states that from 2024 to 2028 the average annual growth will be stable, including some years with reductions.
“The global solar market is following a typical S curve. In recent years, growth has risen rapidly to the steepest levels of the curve”, stated Wood Mackenzie.
“The global solar market is still larger than it was a few years ago, but it is natural for an industry's growth to slow as it matures,” he added.
Annual installation of solar photovoltaic energy by region
China leads the way in solar photovoltaic installations. Annual installations have multiplied almost six times since 2019, and with a large market (with almost 200 GW predicted by 2023 by the institution) it has a major impact on global growth.
In second place is Europe, which saw an increase in solar growth following the recent energy crisis. According to the report, the last two years have been strong, with annual installation growth of 38% in 2022 and 26% in 2023.
The regions of Africa and the Middle East remained in the same place along the S curve. Wood Mackenzie states that there is still a long way to go before the regions reach their growth deviation points.
“Distributed solar growth will slow as subsidies were recently cut and changes to distributed solar compensation schemes have reduced the viability of projects,” he said.
“China will remain a huge market, but these factors signal a much slower growth trajectory for the solar market,” he added.
Estimated solar manufacturing in 2024
As global solar installations have increased, so has solar manufacturing capacity. Several nations have significantly expanded solar manufacturing, with a particular focus on module production, to promote supply chain diversification, overcome trade barriers, and stimulate domestic economic investment.
According to the report, module manufacturing capacity has tripled in the past two years to over 1 TW. Wood Mackenzie estimates that global module manufacturing rates have fallen dramatically in the past two years, from 2% in 70 to less than 2021% in 40.
“As global demand growth slows, manufacturers will need to be as innovative as ever to remain a constant concern,” the report said.
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