Solar's Unmatched Expansion
Solar power's expansion in 2022 outshone all other power generation technologies. Solar photovoltaic (PV) claimed a staggering two-thirds of all new renewable power capacity added last year. Notably, it boasted the highest growth rate in electricity generation among all power generation technologies, at an impressive 24%. However, despite this remarkable progress, solar still represents a mere 4.5% of global electricity demand, with over 70% of energy being sourced from non-renewable resources.
Challenges and Cost Competitiveness
While 2022 brought about record installations, it was not without its challenges. Supply chain disruptions, lingering effects of the COVID-19 pandemic, and inflationary pressures stemming from the conflict in Ukraine led to the first increase in solar's levelized cost of electricity (LCOE) in over a decade. Nonetheless, this increase did not undermine solar's cost competitiveness. Solar PV remains substantially more affordable than new fossil fuels and nuclear energy. Furthermore, recent months have seen a decline in product prices, signaling a return to pre-crisis levels in the near future.
Global Leaders and Regional Shifts
China, the undisputed leader in the solar market, played a pivotal role in the record installations of 2022, adding nearly 100 GW of capacity at an astonishing 72% annual growth rate. Despite a tumultuous year, the United States maintained its position as the second-largest market with 21.9 GW of new capacity, albeit experiencing a 6% annual decrease. India continued its rebound with 17.4 GW of new installations, reflecting a 23% growth rate. Brazil, doubling its installation rate to 10.9 GW, and Spain, emerging as the largest European market with 8.4 GW, rounded out the top 5 countries for solar installations in 2022. The Asia-Pacific region saw its share rise to 60%, thanks to China's dominance, while Europe maintained its stability at 19%, and the Americas experienced a decline to 17%. Notably, Australia led in terms of installed solar capacity per capita, with almost 1.2 kW/capita, compared to the global average of an estimated 144 W/capita.
Bright Prospects for 2023 and Beyond
Solar industry analysts are confident that the momentum of 2022 will carry into 2023 and beyond. While the extent of growth is the question at hand, projections suggest robust expansion. The Medium Scenario anticipates a global installation of 341 GW in 2023 – a remarkable 43% growth mirroring the outstanding performance of the previous year. However, if market conditions improve, the installation figure could surpass 400 GW by the end of 2023. This positive trajectory is expected to continue, with 401 GW added in 2024 and an impressive 617 GW market reached by 2027. These projections signify a total operating capacity of over 2 TW by early 2025 and a staggering 3.5 TW by the close of 2027.
Proliferation of Solar Markets
The surge in solar expansion during 2022 led to an unprecedented rise in 'developed' solar markets. The number of countries boasting GW-scale solar markets – those installing a minimum of 1 GW – surged from 17 in 2021 to an impressive 26 in 2022. The momentum is expected to continue with projections of 32 GW-scale markets in 2023, followed by 39 in 2024, and a robust estimation of at least 53 such markets in 2025.
