Global solar PV capacity will exceed 3 TW by end-2025, led by China and Europe, according to the latest DNV report
Solar’s share in global power generation is expected to double to 20% by 2029 and reach 40% by 2045
By 2060, behind-the-meter systems will contribute 30% of all solar capacity as costs continue to decline
Global solar PV capacity is projected to surpass 3 TW by the end of 2025, according to DNV’s Energy Transition Outlook 2025 with China and Europe leading with their 47% and 20% share of total installations, respectively.
The report highlights that solar PV currently accounts for 10% of global power generation, a share expected to rise to 20% by 2029 and 40% by 2045. Solar and wind will generate most electricity in all regions in 2060, with a global share of 47% and 32%, respectively, adds the report.
Further, solar—with and without storage—and wind energy will account for 32% of the global power mix by 2030.
Declining costs of solar panels and batteries are driving wider adoption, particularly of behind-the-meter (BTM) systems. By 2060, BTM solutions are expected to provide 30% of all solar capacity and 13% of total global power generation.
From the mid-2030s onwards, analysts project around half of all new installations to be co-located with storage, up from 6.6% at present. Distributed generation will make up half of this capacity rising from 33% currently. In fact, the report writers expect distributed solar (comprising BTM residential and commercial solar and off-grid solar‚ to outpace utility scale installations in some key regions.
Utility scale solar installations are forecast to decline during the early 2030s, with the highest share expected in the OECD Pacific, Europe, Latin America, and Greater China. DNV lists constricted grids, price cannibalization, and the marginally lower revenue-adjusted LCOE of onshore wind as the reasons for this drop in utility-scale solar.
The levelized cost of electricity (LCOE) for solar will stabilize over the coming years, according to the report. It expects around 5% average annual drop in solar LCOE for the rest of the decade compared to 8% over the last 10 years. In the 2030s, it will further go down to 3%, before dropped below 1% in 2050s.
“Solar’s meteoric rise has been driven by falling costs of modules as production moved to China. The LCOE is now sufficiently low to maintain the rate of installations, which are set to plateau overall, but continue increasing in the Global South,” reads the report.
As the Chinese government-backed solar PV industry expanded its manufacturing capacity to massive proportions, solar module prices now account for only 18% of the CapEx of a global utility-scale project. Remaining 74% share is a balance of system including labor, racking, installations, etc., and 7% is grid costs.
Future cost reductions will come from installation efficiencies and learning curves in other components such as inverters, it adds.
Overall, the DNV analysts the global energy transition will continue unabated through the 2050s despite policy headwinds in the US.
“However slow it may be, the transition is inevitable. No policy reversals, budgetary deficits, or geopolitical crisis will stop it. Solar PV, onshore wind, and batteries — the three most important technologies needed for the transition — are now so inexpensive that they outcompete fossil energy in a constantly growing number of areas. While the direction of the transition is set, the pace of the transition is not a given,” as per the report.
The complete report can be downloaded for free on DNV’s website.