Global Solar Market Faces First Annual Contraction Since 2006

The 2025 solar market added a record 664 GW of new capacity, pushing total worldwide photovoltaic installations past the 3 terawatt mark and delivering 9 % of global electricity demand. China contributed 382 GW (57 % of the total) but is projected to cut installations by roughly 24 % in 2026, driving the sector toward its first year‑on‑year decline since 2006. The Global Solar Market Outlook 2026‑2030 estimates a median‑scenario output of 612 GW for 2026, an 8 % drop that would mark the first contraction in two decades.

Germany rose to fourth place globally, adding 17.6 GW in 2025 for a cumulative 118 GW and outpacing southern‑European nations. While overall growth slowed to 12 % in 2025, the industry highlights mounting challenges: grid congestion, insufficient storage, and system‑integration limits that threaten further expansion. Stakeholders call for increased investment in transmission infrastructure and flexible storage solutions to accommodate variable solar generation.

Solar power now accounts for 27 % of incremental primary‑energy demand and has overtaken wind as the world’s leading energy‑growth engine. The sector’s rapid expansion underscores its central role in the global energy transition, even as policymakers grapple with integrating this growth into existing power systems.