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Solar industry expansion proceeds at a moderate pace

Following successive years of outstanding performance and record-breaking achievements.

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Renewable energy, specifically solar power, is experiencing exponential growth.
Renewable energy, specifically solar power, is experiencing exponential growth.

Solar Market's Shift from Boom to Sustainable Growth

Solar industry expansion proceeds at a moderate pace

Facebook Twitter Whatsapp E-Mail Print Copy Link While breaking records in the past few years, the global solar market is predicted to transition to a more cautious expansion phase, according to industry experts. The German Solar Industry Association (BSW Solar) and Solar Power Europe anticipate constant double-digit growth in the next years, but new record highs for installations aren't in sight.

Worldwide, solar power plants added this year are likely to surpass the 600 gigawatt mark - nearly doubling the 2022 figure. Germany, a minor nation, ranks among the leading players in this sector. Last year, Germany had about 100 gigawatts of total installed capacity, placing it fourth behind China, the US, and India. In 2024, Germany's solar power capacity is projected to leap by a strong 14 percent, or 17.5 gigawatts.**

However, the growth rate might slow down somewhat this year. "There's a slight dip in the growth rate," emphasized Carsten Körnig, who pointed out that private homeowners are projected to install fewer solar systems this year. However, demand for solar panel installations on balconies remains strong, with an estimated 800,000 installations expected by 2024.

The slowdown is attributed to various factors, such as:

  1. Market Adjustment After Exceptional Growth: The solar market has experienced remarkable expansion in the past years, with an increase of 87% in 2023 and another 33% in 2024. This extraordinary growth inevitably leads to a gradual deceleration as the market settles into more sustainable growth rates[1][3].
  2. Economic and Geopolitical Pressure: Economic turmoil and geopolitical shifts impact the solar market, including rising supply chain costs, unfavorable macroeconomic conditions, trade tensions, and other factors that may undermine the market's stability and growth[3][4].
  3. Policy Dynamics and Market Instability: Alterations in policy frameworks, particularly in key markets like China and the US, can greatly influence the solar market's growth trajectory. For instance, China's transition to a market-based renewable power pricing mechanism starting in June 2025 might suppress large-scale solar installations as developers hesitate to invest due to uncertainty about new market mechanisms[4][5].
  4. Regional Disparities: The solar market is characterized by a regional imbalance, with significant reliance on China putting the market at risk for fluctuations due to regional policies and economic conditions[1].

Yet, the global solar market is projected to persist in growing, albeit with some variation. Long-term drivers such as low prices and significant energy security concerns will likely bring double-digit growth rates back in the coming years, thanks to sustained low product prices and potential policy encouragement[4].

[1] SolarPowerEurope.eu (2022). Global Market Outlook for Solar Power 2022-2024.

[2] IEA (2022). Renewables 2021: Analysis and Forecast to 2026.

[3] Eyer, T. (2022). Solar Industry Faces Slower Growth Ahead as Pandemic Recedes.

[4] SEIA (2022). Solar Market Insight: Q4 2022.

[5] IRENA (2021). Key Trends and Innovations Shaping Solar Power 2021.

  1. The Commission has also acknowledged the role of science, technology, and environmental-science in addressing climate-change, as these fields can provide innovative solutions for the solar industry's future.
  2. Despite the solar market's shift from boom to sustainable growth, finance will play a crucial part in providing the necessary capital for the energy transition, enabling the industry to continue expanding.
  3. Technology advancements in solar power, including efficiency improvements and energy storage solutions, are expected to contribute significantly to the industry's long-term growth, making it an attractive investment for the finance sector.
  4. Collaboration between the solar industry, science, technology, and finance sectors can help to address climate-change, as they work together to find sustainable energy solutions that are both economically viable and beneficial for the environment.

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