Global Market Outlook For Solar Power 2021

Despite the severe impact of the COVID-19 pandemic across the world in 2020, the year still saw 138.2 GW of solar installed, representing an 18% growth compared to 2019, yet another global annual installation record for the solar PV sector. This brings the global cumulative solar capacity to 773.2 GW, a 22% increase, and marks a new milestone for the solar sector by exceeding three quarters of a terawatt.

Solar’s cost competitiveness progressed further in 2020, resulting in an even wider spread to conventional generation technologies as the cost of gas, coal, and nuclear increased. Solar’s cost improved across the board for all segments with utility-scale solar now superior to fossil fuels in all unsubsidised investment cases, which also applies to solar + storage used to meet peak demand compared to gas peakers, according to investment bank Lazard.

The strong performance of China, growing by 60% to 48.2 GW, easily overcompensated for India’s losses in 2020, pushing up demand for solar in the Asia-Pacific region to a global share of 62%. While an exceptionally good year for solar in the United States carried the Americas to a higher share of 19%, Europe’s slower growth rate than the global average meant a market share reduction to 17%. Despite China’s market growth, the number of volume markets entering the GW-level has only marginally increased to 18 in 2020, up from 17 the year before.

As vaccination rates reach necessary levels across the major solar markets, and with the silicon supply issue solved, the next four years are expected to be very strong for solar power around the world. For each year up to 2025, we have considerably increased our forecasts, but 2022 will stand out. In our Medium Scenario, we see the global solar market increase by 25% to 203 GW in 2022, the first time that annual PV installations will cross the 200 GW level, which we had previously expected to be accomplished only in 2024. With continued growth to annual additions of 266 GW in 2025, the operating global solar power generation portfolio will reach close to 1.9 TW, and in the most optimistic scenario even exceed the 2 TW level in four years’ time.