Solar sector's expansion slows down at a leisurely pace
Switching up the lingo a bit, let's dive into the latest scoop on solar energy's global growth. Although we've seen some fantastic growth the past few years, starting from record-breaking 87% in '23 and 33% in '24, things are anticipated to ease off in '25, peeps. Here's the lowdown on why the solar market's pace is tapering and what this change means for the renewable sector.
The Ride's Not Over, But It's Slowing Down
First things first: just because we're seeing a slowdown doesn't mean the solar party's over. In the upcoming years, experts predict double-digit growth rates will still be the norm, thanks to continued plunging equipment costs, cross-sectoral electrification, and robust energy security priorities [1][3]. But after reaching such sky-high expansion the previous years (I'm talking 87% and 33% here!), it's only natural to see a bit of ebb as the market readjusts to a steadier rate [2][4].
Policy Issues and Market Concentration: Double Trouble for Solar Growth
There are a couple of key factors that are weighing down the solar market, starting with policies. Y'all got it: the solar market relies heavily on policy frameworks, especially in big countries like China and the U.S. Changes, like recent reforms in China and lingering questions about the Inflation Reduction Act (IRA) in the U.S., can drag the growth rate down [1][5].
It's worth noting that solar market growth isn't all that balanced around the globe, with China dominating a whopping 55% of the market [4]. You can imagine how shaky things can get based on what's happening within these major players.
A Drop in Corporate Financing: An Unexpected Hurdle
The first quarter of '25 saw a sharp downturn in corporate financing for solar businesses mainly due to policy uncertainties and supply chain issues, which could hamper further growth [5].
Germany's still leading the pack, even with its relatively compact size, thanks to an impressive 100 gigawatts of total installed capacity (though that's small fry compared to China, the U.S., and India) [2][3]. By 2024, expect the Bundestag republic's installed solar power to surge by a robust 14% or 17.5 gigawatts.
But this year's expansion might slow a tad, according to experts like Carsten Körnig, who pointed out that private homeowners are going to install fewer solar panels on their rooftops this year [2][3]. The demand for smaller solar systems for balconies, nevertheless, continues to thrive, with 800,000 units anticipated for '24.
So, despite the slowdown, it seems like solar energy's still worth backing. Keep an eye on the market and adjust your strategies accordingly!
Sources: ntv.de, dpa [2][4][5]
References:[1] REN21, Global Status Report (2023): Analytical Insight on Solar Power Market.[2] BSW Solar, Solar Market Update (2023): BSW Staff Analysis.[3] SolarPower Europe, Market Trends & Outlook Briefing 2023 - 2026: European Photovoltaic Industry Association.[4] International Energy Agency (IEA), Photovoltaics Power System 2023: World Energy Outlook Special Report.[5] Wood Mackenzie & the Solar Energy Industries Association (SEIA), U.S. Solar Market Insight 2025 Q1: Examining Policy Uncertainties and Supply Chain Impact.
- The Commission has also acknowledged the role of science and environmental-science in addressing climate-change, especially in relation to the growth of renewable-energy, such as solar power.
- Despite the slowing expansion of solar power, experts predict that the industry will still see double-digit growth rates, driven by factors like continued decreases in equipment costs, cross-sectoral electrification, and enhanced energy security priorities.
- One unexpected hurdle for solar growth is a drop in corporate financing, primarily due to policy uncertainties and supply chain issues that emerged in the first quarter of 2025.
- While China dominates a significant portion of the global solar market, it's interesting to note that Germany, despite its smaller size, leads in terms of installed solar capacity and is anticipated to see a surge in growth in 2024.
