Global solar PV capacity approached 3 TW after 690 GW of additions in 2025 with distributed solar accounting for 41% share
Solar PV could generate around 12% of global electricity consumption at current installed capacity, according to IEA PVPS report
Manufacturing capacity continued to exceed production across key stages of the PV supply chain
The annual distributed solar PV installations reached 282 GW in 2025, up from 228 GW in 2024, accounting for 41% share of the approximately 692 GW record global solar additions that year. This is a strong growth for a segment that accounted for under 19 GW annual installations until 2016.
According to the International Energy Agency’s Photovoltaic Power Systems Programme (IEA PVPS), with approximately 2.96 TW of PV capacity installed worldwide, solar could generate about 3,846 TWh of electricity annually, assuming an average yield of 1,300 kWh/kW. This would equal around 12% of global electricity consumption.
In its Trends in Photovoltaic Applications 2026 report, IEA PVPS attributes the growing importance of distributed solar to increasing self-consumption, lower module prices and the expansion of rooftop and locally supplied electricity systems.
However, its development varies considerably across markets, depending on electricity prices, policy support, grid conditions and the economics of consuming or exporting locally generated power.
Distributed PV Additions Gain Ground Beyond China
China remained the largest distributed PV market in 2025, adding 159 GW, representing around 38% of its total 415 GW DC additions last year. This was higher than the 35% share recorded in 2023 and 33% in 2024, although centralized systems continued to dominate the country's market (see China Sets New Annual Solar PV Installation Record In 2025).
Pakistan's entire estimated 14 GW of new installations in 2025 came from distributed solar. The country's cumulative capacity reached approximately 36 GW, reflecting the growing role of privately deployed systems. This eases their exposure to inflation and rising energy costs (see Pakistan: Rooftop Solar Helps Tackle Fuel Supply Disruptions).
India added 12 GW of distributed capacity, accounting for around 22% of its 54 GW total additions. The country is now the second largest solar PV market globally after China, followed by 43 GW installed in the US, 18 GW in Germany, and 14 GW in Pakistan as the top five PV markets by annual installations in 2025.
Germany added 9.2 GW of distributed PV last year, while Brazil installed 7.9 GW and the United States added 7.6 GW. France, Türkiye, Italy and Japan completed the top 10 markets, with additions of 5 GW, 4.2 GW, 4 GW and 3.5 GW, respectively.
The cumulative distributed PV capacity in China reached 533 GW by the end of 2025, making it the largest market by a considerable margin. Germany followed with 83 GW, the US with 74 GW and Japan with 61 GW. Brazil and India had cumulative distributed capacities of 43 GW and 36 GW, respectively.
Continued Overcapacity Concerns
The report also highlights a “significant industrial imbalance” in the solar PV sector, with manufacturing capacity exceeding demand across the supply chain. This overcapacity has kept product prices low, even as efforts to curb further expansion continue, particularly in China.
According to the report, global PV module production reached 722 GW in 2025, down 0.6% from the previous year, while manufacturing capacity rose to an estimated 1,531 GW per year. The report says China’s manufacturing capacity continued to exceed demand across the PV supply chain, contributing to persistently low product prices, and increased pressure on manufacturers.
China accounted for 79% of global module production and 71% of manufacturing capacity, although its share of output declined from 86% in 2024 as capacity expanded in other markets including India and the US. India produced 45 GW of modules in 2025, while the US produced 42 GW.
Global solar cell production reached 779 GW in 2025, compared with annual manufacturing capacity of 1,405 GW. The imbalance was also evident upstream: wafer production stood at 742 GW against capacity of 1,319 GW, while polysilicon production, including semiconductor-grade output, totaled 743 GW against capacity of 1,820 GW.
The report also highlights the growing deployment of standalone battery storage in markets with high solar penetration. Annual BESS energy-capacity additions in Europe and the United States combined increased from 2.9 GWh in 2020 to 79 GWh in 2025.
In 2025, BESS additions totaled 79 GWh, up from 2.9 GWh in 2020, representing more than 27-fold increase, as per the report.
At the broader electricity-system level, IEA PVPS highlights the need for greater flexibility as solar penetration increases. Storage, stronger electricity networks, flexible demand and improved forecasting are becoming important to manage generation during periods of high solar output.
“The next phase of PV development concerns not only installing additional capacity, but using cumulative PV capacity more effectively through appropriate grid rules, reliable operation, system services, resilience and flexibility,” concludes the report.
The IEA PVPS report is available for free download on its website.
