Global solar capacity expected to quadruple in the next decade

In 2023, the world stepped into solar’s “terawatt era,” with installations reaching nearly 1.5 terawatts. In the next decade, though, PV capacity is expected to double, and then double again.

• The top line: Between 2024 and 2033, developers are expected to add 4.7 terawatts of new direct current solar capacity to the grid, according to research from Wood Mackenzie. Those terawatts would account for 59% of the total global renewable capacity expected to come online in the next decade. 
• The market grounding: These projections are dramatic, but the reality could very well outstrip them. As The Economist outlined in a recent much-circulated chart, developers have consistently installed more solar than organizations like the International Energy Agency, the Energy Institute, or BloombergNEF predicted — far more. In 2009, for instance, installed capacity was 23 gigawatts and the IEA predicted that it would reach just 244 GW in 2030. (The world met and then exceeded that number in 2016, and more than doubled last year.)

In the first quarter of 2024, developers in the United States have already installed more solar than they did all year in 2019. Installations in China and India also both ticked up substantially, though Europe’s installations contracted somewhat in light of dropping retail rates.

Looking forward, installations are expected to increase further and faster. According to WoodMac’s projections, developers are expected to quadruple the world’s cumulative installed solar capacity by 2033.

In the United States, 2023 was actually a mixed year for solar: module prices plunged, transformers were in short supply, and interconnection constraints persisted.

But on a global scale, those same ultra-low prices spurred deployment in both Europe and China, leading cumulative capacity to cross the terawatt milestone. In an interview on The Carbon Copy podcast earlier this year, WoodMac’s head of global solar Michelle Davis said that solar is “one of the fastest growing, most important energy technologies, period…like the gas of today.” 

And according to Davis’ colleague, distributed solar analyst Juan Monge, low prices are expected to continue to fuel growth in the near-term. But the researchers expect that 2026 will bring a two-year slowdown in annual installed solar capacity, as developers pause some project activity “before the next round of planned procurement drives higher deployment.”

In the next decade, WoodMac anticipates that half of the 4.7 TW of direct current solar capacity will be built in China. That said, Davis said in January that China’s growth rate is expected to slow somewhat after the country doubled its capacity in 2023. 

“A lot of that was due to government procurements…but a lot of that comes online, we anticipate that that capacity won't be at exactly the same growth rate as it was the year before,” she told host Stephen Lacey. “Doubling again, that would be quite astounding.”

She added that, just as they seem to be doing in the U.S. and Switzerland, grid constraints are starting to take their toll in China, as installers are limited by both land capacity and grid capacity. 

All renewables rise

The combined solar, wind, and storage capacity added to the grid each year is expected to jump from the roughly 500 gigawatts installed in 2023 to a projected average of 560 GW over the next decade.

Storage especially is expected to soar from its current lows. WoodMac is projecting a 636% increase in capacity between 2024 and 2033, with 926 GW or 2,789 GWh added to the grid in the next decade. That deployment is expected to have “the most balanced geographic footprint” as compared with other renewable power sources, the researchers found.

In 2023 alone, storage deployment jumped 162% compared to 2022, to 45 GW or 100 GWh. 

"While impressive, the growth represents just the start for a multi-TW market as policy support in terms of tax exemption and capacity and hybrid auctions accelerate storage buildout across all regions,” said WoodMaC storage analyst Anna Darmani.