The International Energy Agency (IEA) has released its Renewables 2025 report, painting a picture of significant growth in global renewable power capacity. By 2030, the world is set to add an additional 4600GW of renewable capacity, more than doubling the current capacity. This growth is equivalent to the combined generation capacity of China, the European Union, and Japan.
Solar photovoltaic (PV) energy is poised to dominate this expansion, accounting for about 80% of the increase. “The growth in global renewable capacity in the coming years will be dominated by solar PV – but with wind, hydropower, bioenergy and geothermal all contributing, too,” said IEA executive director Fatih Birol. He added that solar PV is on course to account for some 80% of the increase in the world’s renewable capacity over the next five years.
This surge in solar PV is driven by declining costs and faster permitting processes. Emerging economies across Asia, the Middle East, and Africa are accelerating their growth due to cost competitiveness and stronger policy support. India, for instance, is on track to become the world’s second-largest renewables growth market after China and is expected to comfortably reach its 2030 target.
At the company level, developers have largely maintained or raised their 2030 deployment goals, signaling confidence in long-term growth. However, offshore wind remains an exception, with forecasts around 25% lower than last year’s due to policy shifts, supply chain bottlenecks, and cost pressures.
The IEA noted that the overall growth outlook for renewables has been revised slightly downward from last year, reflecting policy changes in the United States and China. Early phase-out of federal tax incentives and regulatory shifts in the US have reduced expected capacity growth by almost 50% compared with the previous forecast. Similarly, China’s move from fixed tariffs to auction-based pricing has constrained expansion.
These downward adjustments are partly offset by stronger momentum in India, Europe, and other emerging economies. Ambitious policies, expanded auction programs, and faster permitting are boosting deployment in these regions. Corporate power purchase agreements, utility contracts, and merchant plants are expected to account for 30% of global capacity additions to 2030 — double their share from last year’s report.
Solar PV remains the lowest-cost generation option in most countries, with wind power expected to regain pace as supply bottlenecks ease in China, Europe, and India. Hydropower, bioenergy, and geothermal will continue to play key roles in grid stability and flexibility.
However, the IEA warned that global supply chains for solar PV and rare earth elements used in wind turbines remain heavily concentrated in China, where more than 90% of production is expected to remain through 2030. Rapid growth of variable renewables is also putting increasing pressure on electricity systems, with curtailment and negative price events emerging in more markets. The agency stressed the urgent need for investment in grids, storage, and flexible capacity to ensure secure integration of renewable power.
The report further projects modest gains for renewables in transport and heating. Their share of energy use in transport is expected to rise from 4% to 6% by 2030, driven by renewable electricity for electric vehicles in China and Europe, and biofuels in Brazil, Indonesia, and India. In heat generation, renewables’ share is projected to increase from 14% to 18%.
This news shapes the development of the sector by highlighting the critical role of policy and market conditions in driving renewable energy growth. The dominance of solar PV and the challenges in offshore wind underscore the need for diversified strategies in renewable energy deployment. The concentration of supply chains in China and the pressure on electricity systems also point to areas requiring urgent attention and investment. As the sector evolves, these factors will likely influence policy decisions, investment strategies, and technological advancements, shaping the future of renewable energy.