IEA’s analysis and forecasts for photovoltaics to 2030

The International Energy Agency has published its October report, and here is a brief summary of their expectations for photovoltaic energy: IEA – Octubre 2024.

By 2030, global renewable electricity generation is expected to reach over 17,000 TWh, representing an increase of nearly 90% compared to 2023, sufficient to cover the combined demand of China and the United States. Significant milestones will be reached in the next six years:

• 2024 – the combined generation of solar photovoltaic and wind energy will surpass hydroelectric power.
• 2025 – electricity generation from renewables will exceed that from coal.
• 2026 – both wind and solar generation will surpass nuclear.
• 2027 – solar photovoltaic electricity generation will surpass wind.
• 2029 – solar photovoltaic will surpass hydroelectric power, becoming the largest renewable energy source.
• 2030 – solar and wind energy will together account for 30% of global electricity, with photovoltaic leading the renewables. Additionally, wind will surpass hydroelectric power.

In 2030, renewable energy sources will be used for 46% of global electricity generation, with wind and solar photovoltaic together representing 30%.

The increase in installed capacity for Utility-Scale projects in 2023 nearly doubled the 2022 value. China played an important role, as the country not only doubled but tripled its capacity. Module prices halved in 2023, and the government implemented a policy to accelerate the construction of large-scale solar photovoltaic plants in desert areas.

The United States recorded the second largest increase, nearly doubling its large-scale photovoltaic installations from 2022 to 2023. Meanwhile, global additions of distributed solar photovoltaic energy (including residential, commercial, and industrial projects) grew by more than 60% last year, driven mainly by acceleration in China and Europe.

After two consecutive years of decline, onshore wind energy installations rebounded by 65% to 107 GW in 2023, with growth again concentrated in China and, to a lesser extent, in India, while additions remained stable in Europe and decreased in the United States.

Solar photovoltaic (PV) energy contract prices continue to decline, while inflationary pressure persists for onshore wind energy. Over the past decade, average auction prices for utility-scale solar projects have continuously decreased in all regions, reaching an average of 40 USD/MWh in the first half of 2024. This decline is largely due to India, a leader in awarded capacity, with an auction price of 34 USD/MWh. In contrast, Europe obtained an average price of 67 USD/MWh for awarded projects in 2024, reflecting an 11% reduction.

This leads to an expected 7% decrease in annual capacity additions in Europe in 2024 compared to 2023, primarily due to reduced incentives for solar photovoltaic energy in Poland and lower auction volumes in Spain. The expansion of distributed solar photovoltaic energy is also slowing in Spain and remaining stable in Germany, as lower electricity prices make it less economically attractive than in 2022, when Russia’s invasion of Ukraine caused an increase in retail electricity prices.

Imanol Matanza Medina

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