Global Renewable Energy Capacity Set To More Than Double By 2030, Driven By Solar PV, Says IEA’s Renewables 2025 Report

Renewable sources of electricity generation continue to expand strongly worldwide, with global capacity expected to more than double by 2030, according to the latest medium-term forecast from the International Energy Agency (IEA). This growth is being driven primarily by the rapid rise of solar photovoltaic (PV) technology, even as the sector faces challenges such as supply chain constraints, grid integration issues, financial pressures, and evolving policies. The IEA’s annual report, Renewables 2025, projects that global renewable power capacity will increase by 4,600 gigawatts (GW) by 2030—roughly equivalent to adding the combined power generation capacity of China, the European Union, and Japan.

Solar PV is expected to account for about 80% of this growth over the next five years, due to its declining costs and faster permitting timelines. Other renewable sources, including wind, hydropower, bioenergy, and geothermal, will also contribute to the expansion. Geothermal capacity is projected to reach historic highs in markets such as the United States, Japan, Indonesia, and several emerging economies. The growing complexity of integrating renewable energy into grids is renewing interest in pumped-storage hydropower, whose growth is expected to be nearly 80% faster over the next five years compared with the previous period.

Emerging economies in Asia, the Middle East, and Africa are experiencing faster renewable energy growth due to improved cost competitiveness and stronger policy support, including new auction programs and higher national targets. India is expected to become the second-largest renewables growth market globally, after China, and is on track to achieve its ambitious 2030 targets. At the corporate level, confidence in renewables remains high. Most major developers have maintained or increased their 2030 deployment targets compared with last year, reflecting resilience and optimism in the sector. Offshore wind, however, faces a weaker growth outlook—about 25% lower than last year—due to policy shifts in key markets, supply chain bottlenecks, and rising costs.

IEA Executive Director Fatih Birol noted, “The growth in global renewable capacity in the coming years will be dominated by solar PV, but wind, hydropower, bioenergy, and geothermal will also contribute. Solar PV is expected to account for around 80% of the increase in the world’s renewable capacity over the next five years. In addition to growth in established markets, solar is set to surge in economies such as Saudi Arabia, Pakistan, and several Southeast Asian countries. Policymakers need to address supply chain security and grid integration challenges as renewables’ role in electricity systems grows.”

The report slightly revised the global growth outlook downward compared with last year, mainly due to policy changes in the United States and China. In the U.S., the early phase-out of federal tax incentives and other regulatory changes reduced expected renewable energy growth by almost 50% compared with last year. In China, the shift from fixed tariffs to auctions has impacted project economics, lowering growth expectations in the Chinese market.

These downward adjustments are partly offset by stronger growth prospects in India, Europe, and most emerging economies, where expanded auction volumes, faster permitting, and increased rooftop solar deployment have improved the outlook. Corporate power purchase agreements, utility contracts, and merchant plants are also a major driver of growth, accounting for 30% of global renewable capacity expansion to 2030—double their share compared with last year’s forecast.

Solar PV is expected to remain the lowest-cost option for new generation and dominate renewables’ growth to 2030. Wind power, despite short-term challenges, is projected to expand significantly as supply bottlenecks ease, particularly in China, Europe, and India. Hydropower and other renewable technologies will continue to play important roles in supporting electricity systems and enhancing flexibility. Global supply chains for solar PV and rare earth elements used in wind turbines remain heavily concentrated in China, presenting ongoing risks to supply chain security.

While investments to diversify supply chains are increasing worldwide, China is expected to continue producing over 90% of key components through 2030. The rapid rise of variable renewables is also placing increasing pressure on electricity systems, with curtailment and negative price events already occurring in some markets. To address these challenges, urgent investment is needed in grids, storage, and flexible generation. While some countries have begun introducing new capacity and storage auctions, much more will be required to integrate variable renewables in a cost-efficient and secure manner.

Renewables are also expected to play a growing, though still limited, role in transport and heating. In the transport sector, their share of energy use is forecast to increase from 4% today to 6% in 2030, driven largely by renewable electricity for electric vehicles in China and Europe, as well as biofuels in Brazil, Indonesia, India, and other markets. In heating, renewables’ share of energy used for buildings and industry is projected to rise from 14% to 18% over the same period.