Solar PV

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Tracking report — September 2022

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Solar PV generation increased by a record 179 TWh (up 22%) in 2021 to exceed 1 000 TWh. It demonstrated the second largest abs

Energy

Solar PV electricity generation achieved another record

increase in 2021; however, greater effort will be needed to get
on track with the 2030 milestones under the Net Zero Scenario
Power generation from solar PV increased by a record 179 TWh in 2021, marking 22% growth on 2020.
Solar PV accounted for 3.6% of global electricity generation, and it remains the third largest renewable
electricity technology behind hydropower and wind.  

Solar PV power generation in the Net Zero Scenario, 2010-2030 Open

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China was responsible for about 38% of solar PV generation growth in 2021, thanks to large capacity
additions in 2020 and 2021. The second largest generation growth (17% share of the total) was
recorded in the United States, and third largest in the European Union (10%). Solar PV proved to be
resilient in the face of Covid-19 disruptions, supply chain bottlenecks and commodity price rises
experienced in 2021 and achieved another record annual increase in capacity (almost 190 GW). This, in
turn, should lead to further acceleration of electricity generation growth in 2022.  

However, reaching an annual solar PV generation level of approximately 7 400 TWh in 2030, aligning
with the Net Zero Scenario, from the current 1 000 TWh requires annual average generation growth of
about 25% during 2022-2030. Although this rate is similar to the average annual expansion recorded in
the past five years, it will require increased effort to maintain this momentum as the PV market grows.  

Technology deployment

Distributed systems play an increasingly important role in

global solar PV deployment
Utility-scale plants were responsible for 52% of global solar PV capacity additions in 2021, followed by
the residential (28%) and commercial and industrial (19%) segments. The share of utility-scale plants
was the lowest since 2012, as generous policy incentives drove record distributed PV capacity
additions in China, the United States and the European Union in 2020-2021.  

Solar PV power capacity in the Net Zero Scenario, 2010-2030 Open

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Utility-scale Commercial and industrial Residential Off-grid Solar PV total

In the environment of increasing fuel and electricity prices in 2021, distributed PV became an
increasingly attractive alternative for many consumers, which has driven investment. Utility-scale PV
remains the most competitive source of PV generation in most parts of the world; however building
large-scale installations is becoming increasingly challenging in many parts of the world due to the
lack of suitable sites.  

Increased support for all segments will be needed to get on track with Net Zero Scenario milestones,
reaching annual solar PV capacity additions of about 600 GW to correspond with the 2030 capacity
level. Distributed and utility-scale PV need to be developed in parallel, depending on each country’s
potential and needs.  

Innovation

Crystalline silicon remains the dominant PV technology, with

new, more efficient cell designs expanding their market share
Crystalline polysilicon remains the dominant technology for PV modules, with over 95% market share.
The shift to more efficient monocrystalline wafers accelerated in 2021, with the technology capturing
almost all crystalline PV production. In parallel, more efficient cell design (PERC) is also expanding its
dominance with almost 75% market share. New, even higher-efficiency cell designs (using
technologies such as TOPCon, heterojunction and back contact) saw expanded commercial
production and captured about 20% of the market in 2021.  

Policy

Strong policy support for solar PV is driving the acceleration in

capacity growth
Policy support remains a principal driver of solar PV deployment in the majority of the world. Various
types of policy are behind the capacity growth, including auctions, feed-in tariffs, net-metering and
contracts for difference. The following important policy and target changes affecting solar PV growth
have been implemented in 2021-2022: 

● China published its 14th Five-Year Plan in June 2022, which includes an ambitious target of 33%
of electricity generation to come from renewables by 2025 (up from about 29% in 2021),
including an 18% target for wind and solar technologies. 

● In August 2022 the federal government of the United States introduced the Inflation Reduction
Act, a law significantly expanding support for renewable energy in the next 10 years through tax
credits and other measures. 

● In July 2021 the European Commission proposed to increase the bloc’s renewable energy target
for 2030 from 32% to 40%. The proposed target was further increased by the REPowerEU Plan to
45% in May 2022 (which would require 1 236 GW of total installed renewable capacity, including
600 GW of solar PV). Many European countries have already expanded their solar PV support
mechanisms in order to accelerate capacity growth with a view to the 2030 targets and in
response to the energy crisis caused by Russia’s invasion of Ukraine.  

● During COP26, held in November 2021 in Glasgow, India announced new 2030 targets of 500
GW of total non-fossil capacity and 50% renewable electricity generation share (more than
double the 22% share in 2020), as well as net zero emissions by 2070, with solar PV being one of
the main technologies used to achieve these goals.  

Policies

PolicyCountryYearStatusJurisdiction

Rural Clean Energy Initiative & Support to rural energy transitionUnited States2023In forceNational

Inflation Relief Package 2Austria2022In forceNational

EUR 8 million for small houses' energy efficiencyEstonia2022In forceNational

Increase in grants for thermal insulation of roofs and installation of photovoltaic systems on homesCyprus2022In force
National

RePowerEU Plan : Joint European action on renewable energy and energy efficiencyEuropean Union2022In force
International

"France 2030 investment Plan"- Investment in renewable energy innovationFrance2022In forceNational

Showing 6 of 646 View all

International collaboration

Many global and bilateral collaboration initiatives are

advancing technological development and policy support for
solar PV
Beyond global renewable energy initiatives that include solar PV, there are numerous international
organisations, collaboration programmes, groups and initiatives aimed at accelerating solar PV growth
around the world, such as:  
● The IEA Photovoltaic Power Systems Technology Collaboration Programme, which advocates for
solar PV energy as a cornerstone of the transition to sustainable energy systems. It conducts
various collaborative projects relevant to solar PV technologies and systems to reduce costs,
analyse barriers and raise awareness of PV electricity’s potential. 

● The International Solar Alliance, which is a treaty-based intergovernmental organisation that

provides a platform to promote solar energy across 86 member countries in a safe, affordable,
sustainable and equitable manner.  

Private-sector strategies

Solar PV is the main renewable technology of choice in the

private sector
The private sector’s main activity in solar PV deployment can be divided into two categories: 

● Companies investing in distributed (including rooftop) solar PV installations on their own

buildings and premises – responsible for almost 30% of total installed PV capacity as of 2021. 

● Companies entering into corporate power purchase agreements (PPAs) – signing direct
contracts with solar PV plant operators for the purchase of generated electricity. Solar PV plants
dominate renewables PPAs, with a share of almost 75% in 2020.  

Recommendations for policy makers

Facilitate permitting for utility-scale systems

Lengthy and complicated permitting processes are one of the main challenges to the faster
deployment of utility-scale solar PV plants in many parts of the world, especially in Europe.
Establishing administrative one-stop shops, developing clear rules and pathways for developers
applying for a construction permit, determining strict timeframes for application processing, and
public engagement in the identification of land suitable for investment could significantly accelerate
solar PV deployment.  

Establish a balanced policy environment for distributed PV

Distributed solar PV expansion, driven by rapid cost reductions and policy support, is transforming
electricity markets. Currently, some distributed solar PV policies can have undesirable effects in the
long term, disrupting electricity markets by raising system costs, challenging the grid integration of
renewables and reducing the revenues of distribution network operators. Tariff reforms and
appropriate policies will be needed to attract investment into distributed solar PV while also securing
sufficient revenue to pay for fixed network assets and ensuring that the cost burden is allocated fairly
among all consumers.  

Support adoption of off-grid electrification systems

The wide array of system designs now available – off-grid, mini-grid and on-grid – increases the
number of methods available to obtain electricity access. Such decentralised systems can help fill the
energy access gap in remote areas by delivering electricity at a level of access that is currently too
expensive to be met through a grid connection, and in urban areas by providing back-up for an
unreliable grid supply.  
Maintain the cost reduction trajectory for solar PV
While dramatic scale effects have been achieved in solar PV, R&D efforts focused on efficiency and
other fundamental improvements in solar PV technology need to continue to get on track with the Net
Zero Scenario. Public support for R&D in solar PV technology can be an important factor in achieving
further efficiency gains and costs reductions. 

Support the development of smarter inverter systems and

balance-of-system cost reductions
Higher PV shares, particularly in distribution grids, necessitate the development of new ways to inject
power into the grid and to manage generation from solar PV systems. Making inverters smarter and
reducing the overall balance-of-system cost (which includes inverters) should be a key focus of public
R&D support, as they can account for 40-60% of all investment costs in a PV plant, depending on the
region. 

Resources

Learn more:
IEA Photovoltaic Power Systems Technology Collaboration Programme
International Solar Alliance

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Renewable Electricity More efforts needed

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