The growing emphasis on climate policies at all levels—international, national, regional, and subregional—has positioned solar energy as a key alternative to carbon-intensive power sources like coal.

Over the next decade, the solar power industry is expected to experience remarkable growth. Projections indicate that solar energy’s share of global power generation will rise significantly, from 3.3% in 2020 to an estimated 9.0% by 2030, marking a transformative shift in the global energy landscape.

Asia, led by China, is set to take the lead in the renewable energy revolution, particularly in photovoltaic (PV) power generation. Meanwhile, North America and Western Europe will stand out as regional markets with the lowest project risk in the solar power sector. These regions present prime opportunities for investment due to their strong policy support and well-established project pipelines.

Project tenders and renewable energy auctions are expected to remain the main avenues for investment in the global solar industry. Additionally, technological advancements in solar modules, digitization, and calcium titanium ore solar cell technology will likely enhance conversion efficiency and significantly lower costs in the mid-to-late stages of the next decade.

Fitch Solutions projects that the global total installed solar capacity will rise dramatically from 715.9 GW in 2020 to 1747.5 GW by 2030, reflecting an impressive 144% growth. This surge will be primarily driven by China, the U.S., and India, which together are expected to account for more than two-thirds of the total solar capacity additions.

China is projected to remain the world’s largest solar market, with its total installed solar capacity anticipated to grow from 253.4 GW in 2020 to an impressive 690.3 GW by 2030. This growth will represent 42% of global solar additions by 2030. The expansion of distributed photovoltaic (PV) systems, driven by government incentives and increasing consumer interest, will play a pivotal role in propelling China’s solar market forward.

The United States is poised to remain the second-largest solar market globally, following China. Solar power generation in the U.S. is forecasted to grow at an average annual rate of 12.2 GW between 2023 and 2030. This growth will be fueled by a strong pipeline of projects, supportive government policies, and increasing demand for renewable energy. Additionally, the integration of solar + storage projects will constitute an expanding portion of the overall solar market, enhancing energy reliability and efficiency.

India’s solar market is set to experience significant expansion, driven by regulatory incentives such as government-backed financing schemes, tax benefits, and the implementation of net metering systems. These measures are designed to make solar energy more accessible and financially viable, fostering widespread adoption and supporting the country’s renewable energy goals.

Prime Minister Narendra Modi announced ambitious targets at the 26th United Nations Climate Conference (COP26), setting a goal for 50% of India’s electricity to come from renewable sources by 2030 and increasing non-fossil energy capacity to 500GW, surpassing the earlier 450GW target set in 2015. Beyond India, emerging markets like Australia, Indonesia, Spain, Chile, Brazil, Colombia, Namibia, Morocco, and Malaysia are becoming increasingly attractive destinations for solar energy investments, driven by supportive policies and growing renewable energy demand.

Cost competitiveness remains pivotal to the sustained expansion of solar energy. Over the last ten years, solar power generation costs have dropped dramatically due to declining module prices, economies of scale, and intensified supply chain competition. Looking ahead, ongoing technological innovations are expected to drive further reductions in solar energy costs, solidifying its position as an increasingly affordable and globally competitive energy source.

Solar module manufacturers are continuously advancing technology to create more powerful and efficient modules, with high-power modules exceeding 600W increasingly becoming the standard. These advanced modules reduce the number required for equivalent capacity, significantly cutting costs associated with installation, construction, trackers, and cable routing. This, in turn, lowers the overall balance of system (BOS) expenses. Additionally, in some cases, these higher-power modules lead to savings in land use fees, further enhancing their cost-effectiveness.

Smart solar tracking systems are proving to be highly effective on complex terrains, leveraging local conditions to enhance PV power generation efficiency. Dual-axis tracking systems, specifically, can boost power output by up to 40%. To further optimize these systems, manufacturers are focusing on technological advancements that simplify assembly, installation, and maintenance processes. These innovations help reduce operational costs, narrowing the cost disparity between fixed-tilt and tracking systems. As a result, the entire life cycle cost of solar energy projects is decreasing, making solar energy increasingly competitive and accessible.

Data analytics and digitization are revolutionizing solar energy projects, significantly reducing both development and operational costs. Artificial intelligence (AI) and machine learning (ML) are being utilized to design more efficient solar power systems, optimizing their layout and performance. The implementation of digital twins—virtual models of physical solar equipment—enables predictive maintenance by identifying potential equipment failures and analyzing operational data. This innovation not only cuts maintenance expenses but also enhances plant performance and energy output. The future of solar energy is set to be smarter, cleaner, and more cost-effective, driven by these technological advancements.