2024 was a year of dual narratives. On the one hand, unprecedented volumes of solar PV capacity were deployed, led by China with an estimated 357.3 GW, followed by the European Union (62.6 GW), the United States (47.1 GW), and India (31.9 GW), and over 30 countries installed more than 1 GW each. On the other hand, the industry grappled with intense overproduction, steep price declines, and increasing pressure on manufacturers.
This paradoxical growth pattern serves as a perfect example of how quickly global PV markets are becoming more complex. Rapid deployment has outpaced regulatory and infrastructure development in many regions, straining systems, grid interconnections, and local manufacturing ecosystems. Because of this, stakeholders must re-evaluate supply chain resilience, financing models, and long-term policy frameworks.
In addition to market forces, climate policy and investor expectations play a major role in shaping PV expansion. The intersection of environmental targets and energy security concerns is driving countries to accelerate solar deployment, even as they struggle to integrate these systems into existing infrastructure. Managing this growth in a sustainable way will be critical to ensuring that the sector remains healthy in the long term.
Emerging markets
China reinforced its leadership in solar, becoming the first country to approach 1 TW of cumulative capacity. The country represented over half of global PV installations in 2024, driven by state support, manufacturing capacity, and low module prices.
Meanwhile, Brazil, India and Pakistan posted substantial gains. Pakistan's capacity reached 17 GW – 13 times its 2023 figure – though questions remain about grid stability and uncommissioned imports.
Beyond these headlines, emerging markets across Africa, Southeast Asia, and Latin America are quietly expanding their PV usage. However, political volatility and inconsistent grid planning in these regions could limit sustainable scale-up.
New alliances and regional cooperation frameworks are starting to form, such as power pool initiatives, joint R&D centers, and harmonized regulatory efforts. While early-stage, these developments could lead to greater cohesion and scalability among the world’s newest solar adopters.
In 2024, utility-scale PV dominated new capacity, particularly in China, India, and the United States, comprising over two-thirds of installations. While distributed solar is still vital in countries like Brazil and Germany, utility projects grew rapidly due to economies of scale and the urgency to utilize surplus modules.
Still, rooftop PV continues to play a crucial role in energy democratization. Households, small businesses, and community energy projects contribute to energy independence, especially in regions with higher electricity costs.
Hybrid models that integrate rooftop solar with battery storage and smart energy management systems are also gaining traction, as they provide resilience against grid congestion, outages and negative market prices, and open up new possibilities for local energy trading. Policies that support self-consumption, net metering, and energy communities will prove vital to unlocking the full potential of this segment.
Market risk
The global PV sector faces a paradox: explosive demand amid unsustainable production practices. Oversupply in China pushed global module prices to record lows, and while this benefited installers and system owners, it created financial strain across the supply chain. Module stocks in China and Europe surged, exceeding 150 GW by end-2023, with continued inventory buildup in 2024.
This market imbalance has sparked calls for strategic intervention. The report notes that overcapacity may lead to innovation in financing methods and alternative usages. Industry experts advocate for capacity capping mechanisms, stronger coordination between supply and demand forecasts, and efforts to diversify production away from a few dominant geographies.
The impact on small and medium-sized enterprises has been particularly strong. As larger manufacturers absorb market share through price wars, many smaller firms are forced to consolidate or exit. Preserving diversity in the supply chain may require targeted support for innovation hubs and flexible finance models.
Policy support remains essential. Several countries reinforced or revised PV targets in 2024, while mechanisms like tenders and corporate power purchase agreements grew more common. The report highlights evolving trends in remuneration schemes, from feed-in tariffs to market-based models that factor in environmental and social metrics.
Moreover, digitalization and decentralization are reshaping energy governance. Smart meters, dynamic tariffs, and real-time trading platforms are enabling new forms of consumer participation. However, these innovations require updated legal frameworks and cross-sectoral coordination.
Yet the variability in policy frameworks remains a challenge. Some countries offer stable multi-year incentives, while others experience frequent regulatory shifts. The report calls for more consistency and long-term visibility in solar policies to provide investor confidence and accelerate private sector engagement.
Grid integration
With PV penetration increasing, grid congestion and curtailment are growing concerns. High-penetration regions like Australia, Spain, and parts of the United States experienced frequent oversupply, leading to forced generation cutbacks and negative electricity prices.
Addressing these issues demands a multi-pronged approach. Flexible demand, vehicle-to-grid integration, and advanced forecasting tools are part of the solution, and grid operators are developing control strategies. Investments in digital grid infrastructure and cross-border interconnections could also alleviate regional bottlenecks and reduce the prevalence or severity of negative prices.
Global disruptions and trade tensions have accelerated interest in local PV manufacturing. The United States expanded its domestic capacity under the Inflation Reduction Act, reaching over 40 GW/year in 2024. Meanwhile, India revived its Approved List of Models and Manufacturers (ALMM) and added 60 GW/year of new module manufacturing capacity.
However, building competitive local industries goes beyond subsidies. The report calls for ecosystem development that includes upstream materials, skilled labor, and innovation clusters. Only by nurturing holistic value chains can governments achieve both energy security and economic competitiveness.
To ensure resilience, national strategies must also consider circularity and environmental standards. Sustainable manufacturing practices, recycling infrastructure, and lifecycle assessments are increasingly being factored into investment criteria, especially in jurisdictions with strong ESG mandates.
In 2024, PV accounted for 75% of new renewable energy capacity and 60% of new clean energy generation. As prices remain low, and policy frameworks mature, PV is cementing its place in the global energy transition.
This momentum is reshaping system planning. Transmission upgrades, integrated energy hubs, and multi-use infrastructure are gaining traction. Solar’s role is expanding beyond electricity to support hydrogen production, industrial decarbonization, and climate adaptation, making it a versatile anchor of net-zero strategies.
Structural imbalances
The IEA-PVPS report emphasizes the paradox facing the PV industry: historic expansion tempered by structural imbalances. Sustainable growth will require consistent and smarter policies, resilient supply chains, flexible grids, and deeper integration with other energy sectors.
By aligning financial, regulatory, and technical systems, the industry can mitigate risk and reinforce trust. The path ahead is not only about deploying more panels but doing so in a way that strengthens the broader energy and environmental systems they serve.
As the industry moves into the multi-terawatt era, scaling sustainably is not only desirable – it is imperative for climate, communities, and the global economy.
