BMI says Asia Pacific, led by Mainland China, Australia and India, has the largest chunk of the global active solar projects pipeline
Government support, and private sector investments in developed markets help reduce project risks
As lead times reduce, the possibility for a large number of projects from the active pipeline being commissioned is higher
BMI, a Fitch Solutions Company, counts the global solar power project active project pipeline to have expanded by 11% since December 2023. As of November 2024, the global solar projects pipeline stands at about 2,781 projects with 892 projects representing 310 GW in the Asia Pacific region, led by Mainland China, Australia, and India.
China alone has over 60 GW of active projects in the pipeline. Having already achieved its 1.2 TW target for wind and solar for 2030 6 years ahead, BMI forecasts the Asian giant to exceed 2.5 TW by the end of this decade (see China Hits 2030 Wind & Solar PV Capacity Target 6 Years Earlier).
India will fall short of its 280 GW solar energy target for 2030, achieving about 232 GW. Australia is likely to add over 28 GW of new capacity by the end of this decade, even though it has more than 75 GW of new projects in the pipeline.
Another large market, the US accounts for over 450 solar projects in its pipeline as solar is expected to drive the country’s achievement of its 100% clean electricity goal by 2035. BMI sees the country adding more than 300 GW of new solar capacity between 2024 and 2033. It has more than 134 GW of solar capacity in the current project pipeline.
Even though the Inflation Reduction Act (IRA) has been the major driver of increased investments in the sector, Donald Trump’s presidency ‘looks less likely’ to impact the pace of adoption even with risks to the IRA.
By 2030, the Asia Pacific region is projected to account for over 70% of the global solar capacity, and North America 10%.
Lower risk profile
The analysts also see a large number of these projects as carrying low risks on BMI’s Infrastructure Project Risk Metric (PRM), especially in North America and Europe backed by government tax credits and subsidies. Favorable policy environments are supported by growing governmental and private sector investments. They explain that this means such projects have a higher likelihood of coming online, with 97% of the global solar project pipeline categorized as medium or low risk.
While it lends reliability and viability to solar projects, it also reflects strides in project management, financing and technological stability, according to the analysts.
On the other hand, projects in Sub-Saharan Africa (SSA), the Middle East and North Africa (MENA), and Latin America are predominantly medium risk, owing to poor political stability, regulatory frameworks, and technological reliability.
Nonetheless, analysts expect investor confidence to grow with the solar sector’s low-risk profile, which should facilitate more capital flow and encourage the adoption of new technologies.
Lead time reducing
There are more chances for these projects to come online as lead times for large projects have been coming down steadily, declining from about 66 months prior to 2016 to around 32 months post-2020. This is due to technological advancements, economies of scale and improved project management.
“As a result, we expect the number of completed solar projects to increase by over 20% annually over 2024-2025. Over the next decade, as the industry continues to mature and system efficiencies continue to improve, we expect to see further improved completion rates in solar projects, driving growth in the sector and creating new opportunities for developers, investors, and other stakeholders,” according to BMI.
The global large-scale solar PV project pipeline with an announced completion year of 2024 stands at about 95.3 GW, as of November 2024, according to the Key Projects Data (KPD) of BMI. However, the overall scope of solar capacity should be much larger since this represents only 22% of its forecasted 2024 solar capacity additions as it does not include distributed generation (DG).
Additionally, projects delayed from 2022 and 2023 due to limited grid infrastructure and supply chain issues, may also be coming online in 2024.
According to most market experts, global solar PV installations in 2024 are likely to exceed 500 GW, reaching a maximum of 593 GW this year (see 2024 Global Solar PV Market Demand Projected To Reach Up To 533 GW).