What's Happening?
The world has surpassed 3 terawatts (TW) of installed solar capacity, marking a significant milestone in the rapid growth of photovoltaic energy. According to BloombergNEF (BNEF), it took approximately 10 years for global solar capacity to increase from
100 GW in 2012 to 1 TW. The second terawatt was added in less than three years, and the third terawatt was achieved in under two years. This acceleration is expected to continue, with BNEF projecting global solar capacity to exceed 9 TW by 2036. China has been the primary driver of this growth, combining rapid deployment of solar capacity with large-scale manufacturing, which has helped reduce technology costs globally. While developed countries accounted for most of the first terawatt, China has led the expansion for the second and third terawatts. Solar adoption is also expanding to countries like Pakistan, Nigeria, and the Philippines, and the number of countries with at least 1 GW of installed solar capacity increased from 42 in 2020 to 74 in 2025.
Why It's Important?
This milestone signifies solar energy's transition from a niche technology to a central component of global power capacity expansion. The rapid growth, particularly driven by China, has made solar more accessible and affordable worldwide. However, this expansion also presents new challenges for power systems, especially concerning grid infrastructure and energy storage. In China, for instance, solar deployment has outpaced the necessary infrastructure for transmission and storage, leading to increased curtailment where some solar generation is reduced during high output periods. This highlights a critical need for advancements in energy storage capacity and grid flexibility to effectively utilize the growing solar generation. The shift in focus towards integrating renewable generation and expanding consumption capacity will be crucial for the next phase of solar development, impacting energy policies and investments globally.
What's Next?
The next phase of solar expansion will heavily focus on addressing challenges related to transmission, storage, and demand flexibility. BNEF projects that the share of developing countries in new solar installations will begin to increase from 2026, with more than a quarter of global installed solar capacity expected to be in these regions by 2036. This shift will require significant investment in infrastructure and technology in these emerging markets. Energy storage, particularly lithium-ion batteries, will become a decisive factor in fully utilizing additional solar capacity by absorbing excess electricity during peak generation and discharging it later. A slowdown in new Chinese installations is anticipated as the country prioritizes integrating renewable generation and expanding its capacity to consume it. The ability to use solar electricity efficiently, at the right time and place, will be paramount for converting installed capacity growth into effectively utilized generation.
Beyond the Headlines
The rapid global adoption of solar energy, while positive for decarbonization efforts, also brings deeper implications for international energy markets and geopolitical dynamics. China's dominant role in solar manufacturing and deployment gives it significant influence over global energy transitions and supply chains. The increasing reliance on solar power necessitates robust and resilient grid systems, pushing innovation in smart grid technologies and energy management. Furthermore, the projected increase in solar capacity in developing countries could foster economic growth and energy independence in these regions, but it also requires substantial international cooperation and financial support to overcome infrastructure and technological barriers. The evolving landscape of solar energy underscores a broader global shift towards decentralized energy systems and the critical importance of energy storage in ensuring grid stability and reliability.
