IEA (2020), Solar PV, IEA, Paris https://www.iea.org/reports/solar-pv
Solar PV generation increased 22% (+131 TWh) in 2019 and represented the second-largest absolute generation growth of all renewable technologies, slightly behind wind and ahead of hydropower. Despite decelerating growth due to recent policy changes and uncertainties in China (the largest PV market globally), 2019 was a year of record global growth in PV capacity. As competitiveness continues to improve, solar PV is still on track to reach the levels envisioned in the SDS, which will require average annual growth of 15% between 2019 and 2030.
Power generation from solar PV is estimated to have increased by 22% in 2019, to 720 TWh. With this increase, the solar PV share in global electricity generation is now almost 3%. In 2019, PV generation overtook bioenergy and is now the third-largest renewable electricity technology after hydropower and onshore wind.
Solar PV electricity generation increased by 131 TWh globally in 2019, second only to wind in absolute terms, to account for 2.7% of the electricity supply. This growth was significantly lower than in 2018, however, because global solar PV capacity additions stalled in 2018 and China’s deployment further contracted in 2019. This was mainly as a result of a sudden change in China’s solar PV incentives to curb costs and address grid integration challenges to achieve more sustainable PV expansion. The European Union, India and the United States contributed equally to the solar output increase.
Solar PV generation rose sharply in Southeast Asia, driven by a surge in new capacity in Viet Nam from 0.1 GW to 5.4 GW. Capacity additions increased in the United States, the European Union, Latin America, the Middle East and Africa, which together compensated for the slowdown in China, resulting in a record year for PV deployment – 109 GW were installed in 2019.
Solar PV is well on track to reach the Sustainable Development Scenario (SDS) level by 2030, which will require electricity generation from solar PV to increase 15% annually, from 720 TWh in 2019 to almost 3 300 TWh in 2030.
Stimulated by strong policy support concentrated mostly in Europe, the United States and Japan, deployment of distributed solar PV systems in homes, commercial buildings and industry has been growing exponentially over the last decade.
In most countries, commercial and residential systems already have electricity generation costs that are lower than the variable portion of retail electricity prices. The increasing economic attractiveness of distributed PV systems could therefore lead to a rapid expansion in the coming decades, attracting hundreds of millions of private investors.
In China, solar PV capacity additions slowed for the second year in row to 30.1 GW in 2019. This expansion is significantly lower than the 53.1 GW in 2017, when the government phased out feed-in tariffs and introduced deployment quotas (in June 2018) to control costs and tackle grid integration challenges. Overall, this policy shift is expected to make solar PV technology more cost-competitive within and outside China, leading to more sustainable development over the longer term. A large number of subsidy-free projects were already in development in multiple provinces in 2019.
Distributed solar PV capacity is expected to increase rapidly in China, driven by new auctions for commercial and industrial applications and subsidies for residential systems.
Growth in the United States was stable, with 13.2 GW of solar PV becoming operational in 2019, one- quarter higher than 2018 additions, as a result of federal tax incentives and state-level policies. In the European Union, solar PV additions increased 98% year-on-year in 2019 owing to faster deployment in Spain, Germany and the Netherlands.
Brazil installed a record-level 2.1 GW of new solar PV capacity in 2019, more than doubling its achievement in 2018. Generous net metering incentives stimulated this rapid expansion, as residential and small commercial consumers receive significant returns on their investments.
Covid-19 has led to construction delays, supply chain disruptions and weaker investment in the PV sector. Utility-scale projects are susceptible to supply chain concerns, labour constraints and construction delays, all leading to delays in project commissioning. The distributed PV sector is more at risk as it relies on both individuals and SMEs, who are more severely affected by lockdown measures and any economic downturn resulting from Covid-19.
Despite the slowdown expected in 2020, acceleration of PV capacity deployment is likely to continue in the medium-term, as the cost of electricity generation from solar PV is increasingly cheaper than alternatives. The rapid recovery of the distributed PV sector will depend on the pace of economic recovery and government policies.
The impact of the Covid-19 crisis on PV deployment is extensively covered in the IEA Renewable Energy Market Update released in May 2020.