Global Solar Installations In 2025 To Stagnate At 493 GWdc: Report

Globa Solar Installations In 2025 To Stagnate At 493 GWdc: Report

The global solar market continued its growth trend in 2024 to reach 495 GWdc installed capacity, with a 14% increase compared to 2023. A latest Wood Mackenzie report estimates a rise in power demand across regions due to the proliferation of data centers and growing electrification trends.

However, the research report also cautions against several limitations such as policy uncertainty, protectionist measures, and interconnection and transmission bottlenecks that can bring the annual growth trend of solar buildout to a halt, even under current module oversupply conditions. It estimated these factors, along with regional market dynamics, can result in new global capacity reaching 493 GWdc in 2025, a slight contraction year-on-year. Thus, the report predicts, will drive solar installations to stagnate at 493 GWdc after years of exponential growth.

Global solar installation

2025 To Be A Year Of Rationalisation 

The report evaluated, “For the past two years, the world has experienced unprecedented low prices for solar panels as global overcapacity forced manufacturers into fierce competition. While module buyers were excited to experience record-low prices, others were concerned about the impact of those low prices on the manufacturing industry.” It foresees that 2025 can bring a substantial shift as prices will increase to around US$0.15/W FOB China, reaching levels not seen since 2021.

Companies Limit Production 

Wood Mackenzie’s report estimated that manufacturers have pledged to limit production even though there is still significant overcapacity in every segment of module component manufacturing. The report noted, “Polysilicon manufacturers GCL and Tongwei agreed to limit their production, while top module manufacturers like Trina, Longi, Jinko, JA, Canadian Solar, and Tongwei have reached a consensus on minimum pricing. Module manufacturers also decided to limit production to the levels of global demand, which will lead to a seller’s market once again.”

The report forecasts, China to continue to be the world’s solar manufacturing center, with 75% (1.2 TW) of the global operational capacity for major module components. It further added, “It still, manufacturing hubs driven by government initiatives will emerge. For instance, India’s cell capacity will increase as the government introduced the Approved List of Cell Manufacturers in an attempt to reduce reliance on China-sourced cells. More module, cell, and even wafer capacities will come online in the US as cells and modules from Cambodia, Malaysia, Thailand, and Vietnam will face tariffs. The Middle East is emerging as a solar manufacturing hub, attracting multiple players to build the region’s polysilicon, wafer, cell, and module capacities. Billions in investment and incentives motivate Chinese manufacturers to establish their manufacturing hubs in Saudi Arabia, Oman, the UAE, and Egypt. This capacity will feed growing local demand and supply the US market, avoiding tariffs on Southeast Asian modules.” 

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New Era Of Asset Efficiency

The study predicts innovation to continue to push the envelope for solar module technology. It mentioned, “In 2025, TOPCon and Heterojunction (HJT) will be the predominant cell technologies for utility-scale applications, displacing p-type PERC technology. This shift will result in better module efficiencies and higher power densities. At the start of 2025, Trina achieved 25.44% efficiency for its HJT solar panel. Leading manufacturers like Jinko, JA, and Canadian Solar already offer modules with over 650-700 Wp ratings, and some manufacturers such as Risen offer over 750 Wp modules. We expect panel wattages will exceed 800 Wp in 2025. Larger modules can increase solar density and thus reduce land use by 15%, which will translate to overall project cost savings of 5-10%. However, the larger physical size of the module poses installation and transportation challenges that could offset some of the savings.” 

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