Solar PV generation increased by a record 179 TWh (up 22%) in 2021 to exceed 1 000 TWh. It demonstrated the second largest absolute generation growth of all renewable technologies in 2021, after wind. Solar PV is becoming the lowest-cost option for new electricity generation in most of the world, which is expected to propel investment in the coming years. However, average annual generation growth of 25% in the period 2022-2030 is needed to follow the Net Zero Emissions by 2050 Scenario. This corresponds to a more than threefold increase in annual capacity deployment until 2030, requiring much greater policy ambition and more effort from both public and private stakeholders, especially in the areas of grid integration and the mitigation of policy, regulation and financing challenges. This is particularly the case in emerging and developing countries.

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.

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.

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.

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.

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 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.