Wood Mackenzie, a leading research and consulting firm, has released a comprehensive report detailing the outlook for the global solar energy sector in 2025. This report highlights significant trends and projections that will shape the solar market over the coming year.
Growth in Solar Capacity
According to Wood Mackenzie, India, the United States, and the Middle East are set to add a combined total of 100 gigawatts (GW) of solar capacity in 2025. This growth is crucial as it reflects the increasing commitment to renewable energy sources in these regions. Despite this expansion, China is expected to maintain its position as the dominant player in the global solar market, accounting for 75% of the world’s operational capacity for major solar components, which translates to around 1.2 terawatts (TW).
Rising Module Prices
One notable trend highlighted in the report is the anticipated increase in solar module prices after two years of low prices driven by global overcapacity. The decline in prices had benefited buyers but significantly impacted manufacturers’ profits. To address these losses, manufacturers are expected to implement price increases, which could stabilize the market.
Technological Advancements
The report also points to a shift towards advanced solar technologies. Specifically, two types of solar cell technologies— TOPCon (Tunnel Oxide Passivated Contact) and Heterojunction (HJT) —are predicted to become the primary choices for utility-scale applications. These technologies are expected to replace older p-type PERC (Passivated Emitter and Rear Contact) technology, leading to improved efficiency and higher power output from solar panels.
Policy Uncertainty
As many countries held elections in 2024, new administrations may bring changes to climate policies that could affect solar energy development. Wood Mackenzie warns that uncertainty surrounding renewable energy policies and future incentives could deter investment and slow down project development in various regions. In particular, protectionist policies and local content mandates might introduce additional costs for developers and manufacturers, complicating project timelines and economic viability.
For instance, in India, developers face challenges due to higher costs associated with domestic modules and upstream components. These factors could hinder the growth momentum observed in 2024.
Global Installation Projections
Despite these challenges, Wood Mackenzie projects that global solar installations will stagnate at 493 GW in 2025, a slight decrease from 495 GW installed in 2024. This stagnation is attributed to several factors including policy changes, reduced financial incentives, and a general shift towards less ambitious climate agendas in some countries.
Conclusion
In summary, Wood Mackenzie’s report sheds light on both the opportunities and challenges facing the global solar energy sector as it moves into 2025. With significant growth expected from emerging markets like India and the US, alongside China’s continued dominance in manufacturing, the landscape of solar energy is poised for transformation. However, uncertainties related to policy changes and rising costs could impact project development and overall growth in installations.
As countries navigate these complexities, it will be essential for stakeholders across the industry—from manufacturers to policymakers—to collaborate effectively to foster a robust environment for solar energy development. The coming year will be crucial for shaping the future of renewable energy on a global scale.
