What is the global market outlook for solar power in 2023?

Solar is on the fast track. In 2022, the world installed 239 GW of new solar, finally surpassing the TW-scale. That’s 45% more solar power capacity than the year before. The positive market developments in the first months of 2023 promise another solar boom year, expected to result in 341 GW of newly-added solar to the grid, by the end of the year – equal to 43% growth.

This solar rush comesafter more modest progress in preceding years, which were characterised by pandemic triggered lockdowns, supply chain turbulence, and high productprices along the value chain. However, even in trickier times, the solar industry demonstrated very strong resilience, with newly installed local capacities increasing by 19% in 2020 and 18% in 2021.

The reasons for this spectacular performance are obvious. It comes down to the unmatched versatility of solar – powering individual energy self-sufficiency and comparatively quick-deploying utility-scale projects at competitive low cost. Despite solar’s levelised cost of electricity (LCOE) sliding upwards – for the first time – due to supply chain issues and inflation, it remains profoundly cheaper to produce electricity from solar than from new fossil fuel and nuclear power sources.

What changed for solar power in 2022 – and why we consider the year an inflection point – is the technology’s newly discovered image by a growing number of policymakers. Solar power now enjoys widespread acceptance as the key tool to achieve local energy security in the midterm. During the recent fossil fuel sparked energy crisis, the International Energy Agency (IEA) used two reports to highlight solar’s critical role to reduce the European Union’s dependence on Russian gas. The EU Solar Strategy of May 2022 even called solar the ‘kingpin’ of the continent’s effort to get off Russian gas. Such geostrategic considerations are applicable for other energy importing countries as well. In other words, solar has now untangled what was previously considered a gordian knot – the so-called energy trilemma of sustainability, affordability, and security of supply.

The annual Global Market Outlook for Solar Power is a project that comes to life with the support and in-depth knowledge of the world’s major regional and local solar industry associations. These organisations are working hard to improve the policy frameworks that are essential for solar power to thrive around the world. From these organisations, this report contains in-depth features on the 26 countries that added at least 1 GW of solar in 2022. There are nine more GW-scale solar markets in 2022, compared to the 17 in 2021. The number of the world’s serious solar markets will more than double to over 50 by 2025.

This edition has both a regional and a topical focus – this time on Southeast Asia and PPAs in emerging markets. The idea was to highlight advances and challenges in countries that are often not on the global solar map. These features have been created in cooperation between SolarPower Europe, the Global Solar Council (GSC), through its member, the Asian Photovoltaic Industry Association (APVIA), and GET.invest.

With global supply chain issues largely overcome, and gigantic PV production capacities being built up, prices have dropped significantly across the value chain in recent months and are expected to dip below pre-pandemic levels soon. That will propel demand to the next level. In general, we are more confident than ever that solar will remain on the fast track in the years to come. How fast will depend on the regulatory environment needed to enable that growth – from simpler permitting and stronger grid capacities, to supported solar-storage hybrid solutions. Our 2023 High Scenario foresees 402 GW new solar this year and close to 800 GW in 2027. Having achieved over 1 TW of total solar capacity in 2022, we now see the potential for an annual TW-scale market by 2030.