Global Solar Deployment Hit New Records in 2025

in Japanese

Solar photovoltaic (PV) continues to make significant progress worldwide. Its success is driven primarily by its strong cost competitiveness. Other key factors include its contribution to energy security and the decarbonization of economies. At the distributed level, solar PV is also valued for the energy independence it provides. In 2025, solar PV set new annual growth records for both installed capacity (510 GW) and electricity generation (636 TWh). This remarkable expansion has also brought economic and technical challenges, including negative wholesale electricity prices and increased curtailment. At the same time, it has accelerated the development of solutions such as battery storage systems and innovative retail electricity plans.

China led growth, followed by the EU, India, and the United States

In 2025, global solar PV capacity increased by a record 510 GW [Figure 1], bringing total cumulative installed capacity to 2,383 GW.

Figure 1. World – Annual Solar PV Capacity Additions, 2010–2025

China alone accounted for 62% of the global increase, adding 314 GW [Figure 2]. The European Union (EU) and India completed the top three with additions of 56 GW and 37 GW, respectively, while the United States (US) ranked fourth with 34 GW. Japan lagged far behind these leading markets, with only 3 GW of new capacity added.

Figure 2. Selected Countries – Annual Installed Solar PV Capacity, 2025

Each country faces unique circumstances, and the growth of solar PV depends on specific domestic developments.

For example, in China, a key factor behind the accelerated growth of solar PV in 2025 (314 GW, compared with 277 GW in 2024) was the introduction, on June 1, 2025, of a less favorable contract-for-difference mechanism. The implementation of this new policy triggered a surge in installations between January and May, with 63% of the annual capacity increase achieved during the first five months of the year.

In the EU, electricity prices on power exchanges remain high by global standards, particularly in member states where fossil fuels and carbon pricing continue to play a significant role in price formation.

In Germany, despite renewable energy (RE) accounting for 59% of the electricity mix in 2025, high gas and carbon prices pushed the annual average power exchange price to $101/MWh.¹ This was nearly twice the generation cost of new solar PV in the country ($54/MWh).² As a result, Germany added 15 GW of new solar PV capacity last year.

In France, where decarbonized nuclear power plays a major role in electricity price formation, power exchange prices are lower than in Germany, averaging $69/MWh in 2025.³ The generation cost of new solar PV in France is similar to that in Germany. As a result, the economic incentive to add new solar capacity is less pronounced than in Germany, although it remains attractive. France added 6 GW of new solar PV capacity last year.

In India, coal-fired power generation remains competitive ($30/MWh) due to low fuel costs and the absence of carbon pricing. However, solar PV is even more cost-competitive ($25/MWh), supported by low capital expenditures and high capacity factors (typically 19%). In addition, electricity demand in India is growing rapidly, having increased by one-third since 2020.⁴ Solar PV also offers a significant advantage in deployment speed: a solar project typically takes only two years to develop and construct, compared with seven years for a coal-fired power plant.⁵

In the US, solar PV additions remained robust in 2025 despite President Trump beginning to scale back clean energy incentives, such as tax credits, and imposing high import tariffs. Annual capacity additions declined only slightly compared with 2024, reaching 34 GW versus 38 GW the previous year. It is important to note that, unlike in China, the EU, or India, solar PV is not the most cost-competitive generation technology in the US. At around $30/MWh, the generation cost of existing combined-cycle gas turbines (CCGTs) is roughly half that of new solar PV. This helps explain the continued importance of policy incentives for solar PV deployment in the country.⁶

Finally, in Japan, solar PV expansion remains modest, with annual additions of around 3 GW in both 2024 and 2025. At $69/MWh, the generation cost of new solar PV is slightly higher than that of existing coal-fired power plants ($54/MWh), but significantly lower than that of existing CCGTs ($92/MWh). Solar PV is also likely to be cost-competitive with existing nuclear reactors, although only limited and incomplete cost data are publicly available for the latter. Therefore, the main barriers to solar PV deployment in Japan are not economic, but rather regulatory (such as priority dispatch rules that exacerbate curtailment), societal (including coexistence with local communities), and geopolitical (notably the reluctance to rely on imported Chinese equipment).

Solar to provide 25–40% of the world’s electricity by 2040

In line with record capacity additions, electricity generation from solar power (almost entirely solar PV, as concentrated solar power remains negligible) increased by a record 636 TWh in 2025 [Figure 3]. This represented the second-largest annual increase ever recorded among all electricity generation technologies. Only the rebound in coal-fired generation in 2021 was larger (+719 TWh), following the sharp decline caused by the COVID-19 pandemic in 2020.

Figure 3. World – Annual Growth in Solar Power Generation, 2010–2025

In 2025, global electricity demand increased by 849 TWh, with solar meeting 75% of this growth.

As a result, the share of solar in the global electricity mix rose to 8.7% [Figure 4], up from just 0.2% in 2010.

Figure 4. World – Electricity Generation Mix, 2025

In 2025, electricity generation from solar power surpassed that from wind. In 2026, it is expected to overtake nuclear generation as well. According to the International Energy Agency’s latest World Energy Outlook, solar PV is projected to become the world’s leading electricity generation technology by 2040, with a share of approximately 25–40% depending on the scenario.⁷

The main reason behind this inexorable rise is the outstanding cost competitiveness of solar PV. The industry initially expanded thanks to strong policy support, which enabled technological progress and economies of scale to develop over time. In addition, the recurring oversupply in the solar PV supply chain continues to put pressure on manufacturers to further reduce costs.

Against this backdrop, solar PV has become the most cost-competitive among new electricity generation technologies [Figure 5].

Figure 5. World – Power Generation Costs for New Power Plants, 2025

Another major advantage of solar PV is its exceptional versatility: it can be deployed at almost any scale and in a wide variety of locations, from residential rooftops and commercial buildings to utility-scale solar farms, parking lots, and even floating installations. This flexibility gives solar PV enormous global deployment potential.

Negative prices drive battery expansion and new retail plans

Solar PV is characterized not only by low generation costs, but also by near-zero marginal costs. Under the merit-order principle, it is therefore dispatched first in electricity markets (as is the case for wind power).

Solar PV generation is concentrated around midday. In many power systems, solar PV now supplies such large volumes of electricity during these hours that power exchange prices frequently turn negative.

In Western Europe, France, Germany, the Netherlands, and Spain each recorded between 650 and 800 hours of zero or negative electricity prices in 2025.⁸

Another challenge is curtailment. For example, in Chile, where solar accounted for 25% of total electricity generation in 2025, solar curtailment reached 17%.⁹

On the positive side, these challenging conditions are creating opportunities for new solutions, particularly battery storage systems and innovative retail electricity plans.

In 2025, the world recorded a new high in battery capacity additions, with 247 GWh installed [Figure 6].

Figure 6. World – Annual Installed Battery Storage Capacity, 2016–2025

Like solar PV, batteries benefit from mass production, with costs declining by 84% between 2016 and 2025 due to learning effects, technological improvements, and intense competition—particularly among Chinese manufacturers.

Batteries have moved beyond their initial niche role in providing grid stability services and have become essential infrastructure for storing excess electricity generated during the day and releasing it in the evening and at night.

Because utility-scale solar PV is particularly exposed to price cannibalization, the co-location of solar PV and batteries is emerging as a mainstream development model across global power markets. In 2025, one-quarter of all utility-scale solar plants were built with battery storage.¹⁰ Storage systems can maximize the use of grid connections, create new bankable revenue streams, and shift solar generation to higher-value hours.

Finding ways to encourage the consumption of low-cost electricity generated by solar PV is also important. In this regard, two noteworthy initiatives deserve to be highlighted.

First, the Australian government’s “Solar Sharer Offer.”¹¹ Starting on July 1, 2026, electricity retailers will be required to offer households in New South Wales, South Australia, and Southeast Queensland a tariff that includes at least three hours of free electricity during the daytime, typically around midday. Households in these regions are expected to save between $0.20 and $0.28 per kilowatt-hour consumed during these periods.¹²

Second, the French distribution system operator Enedis has begun implementing a nationwide reform of peak and off-peak electricity hours, effective from November 1, 2025, to better align electricity consumption with solar PV generation.¹³ Consumers will continue to benefit from eight off-peak hours per day, including at least five consecutive hours overnight. During the summer, up to three of these off-peak hours will be shifted to daytime periods. In France, under regulated residential tariffs, electricity consumed during off-peak hours is approximately $0.05/kWh cheaper than electricity consumed during peak hours.¹⁴

Solar PV is profoundly transforming the global power sector. This transformation is largely positive, as the technology is delivering on its promise to provide affordable and decarbonized electricity while strengthening energy security and resilience. The economic and technical integration of solar PV remains a challenge, but one that can be addressed through a range of solutions, including smarter and more adaptive market rules.