Global renewable power capacity is on track to more than double by 2030, led overwhelmingly by solar photovoltaics (PV), according to the International Energy Agency’s (IEA) Renewables 2025 report - the agency’s flagship annual analysis of renewable energy markets and policy trends.
The report forecasts an additional 4,600 gigawatts (GW) of renewable power capacity by the end of the decade, equivalent to the total generation capacity of China, the European Union and Japan combined. Solar PV will account for around 80% of this growth, with falling technology costs, faster permitting and strong policy support driving record installations across established and emerging markets.
IEA Executive Director Fatih Birol said although we are entering a solar boom, grid integration and supply chain challenges could constrain growth if left unaddressed.
“The growth in global renewable capacity in the coming years will be dominated by solar PV – but with wind, hydropower, bioenergy and geothermal all contributing, too,” said IEA Executive Director Fatih Birol.
“Solar PV is on course to account for some 80% of the increase in the world’s renewable capacity over the next five years. In addition to growth in established markets, solar is set to surge in economies such as Saudi Arabia, Pakistan and several Southeast Asian countries. As renewables’ role in electricity systems rises in many countries, policy makers need to play close attention to supply chain security and grid integration challenges.”
Solar remains the lowest-cost option in most countries, and deployment is accelerating across regions. Beyond China, India and Europe, rapid growth is forecast in Saudi Arabia, Pakistan and several Southeast Asian nations, supported by new auction programs and ambitious national targets.
Hydropower, bioenergy and geothermal will continue to play vital roles in balancing grids and providing system flexibility. Pumped-storage hydropower is undergoing a renaissance, with growth expected to be almost 80% faster over the next five years than in the previous five, driven by the need for storage to accommodate variable solar and wind output.
The IEA notes that growth expectations for China and the United States have been revised downward since last year’s report. In China, the transition from fixed tariffs to competitive auctions has impacted project economics, while in the US, the early phase-out of federal tax incentives has led to a nearly 50% reduction in expected renewable additions compared with earlier forecasts.
However, these declines are partly offset by surging growth in other regions. India is now set to become the world’s second-largest renewables growth market, with the country on track to comfortably meet its 2030 targets. Europe’s forecast has also been revised upward, driven by new policy frameworks, higher auction volumes and streamlined permitting.
In emerging economies across Asia, the Middle East and Africa, renewables are increasingly cost-competitive with fossil fuels. Governments are expanding support mechanisms and introducing large-scale auctions to attract private investment. Corporate power purchase agreements (PPAs), utility contracts and merchant plants are also playing a larger role, together accounting for 30% of global renewable capacity expansion to 2030, double last year’s share.
The report highlights persistent risks in global supply chains. For solar PV and the rare earth elements used in wind turbines, manufacturing and processing remain heavily concentrated in China, with more than 90% of key production segments expected to stay in Chinese hands through 2030. Although new manufacturing capacity is being established in Europe, India and the United States, diversification is occurring too slowly to significantly reduce dependency in the near term.
These vulnerabilities are compounded by rising geopolitical tensions and competition for critical minerals. The IEA urges governments to coordinate strategies for material security, recycling, and domestic manufacturing to avoid future bottlenecks.
As the share of variable renewables rises, electricity systems are facing mounting integration pressures. Curtailment and negative pricing events - when excess renewable generation pushes market prices below zero - are appearing more frequently. The IEA warns that urgent investment in grid infrastructure, energy storage, and flexible generation is needed to ensure reliability.
Several countries are responding with new capacity and storage auctions to incentivise flexibility services. Pumped-hydro projects, battery storage and demand-response programs will be central to enabling higher shares of renewables while maintaining grid stability.
While electricity dominates the renewable growth story, other sectors are lagging. Renewables’ share of transport energy use is expected to rise modestly from 4% today to 6% in 2030, driven by renewable electricity powering electric vehicles in China and Europe, and expanded biofuel use in Brazil, Indonesia and India. In heating, renewables’ share is projected to increase from 14% to 18% by 2030, as governments promote electrification and modern bioenergy for buildings and industry.
Despite supply chain headwinds and tighter financing conditions, developer confidence remains strong. Most major renewable companies have maintained or increased their 2030 deployment targets, signalling optimism in the sector’s long-term fundamentals. However, the IEA cautions that higher interest rates and cost inflation continue to pressure balance sheets, particularly in capital-intensive wind and hydropower projects.
The IEA’s Renewables 2025 report paints a picture of a resilient but uneven transition. Solar is poised to dominate new capacity, while wind and other technologies face structural and financial hurdles. The central challenge, according to the agency, lies not in generation but in integration - ensuring that electricity grids, markets and policies evolve fast enough to support the largest clean energy expansion in history.