Executive Summary

1. Global Renewable Energy Overview

The global renewable energy sector has reached a pivotal inflection point in 2025. For the first time, solar and wind are expanding fast enough to meet all new electricity demand growth worldwide. This milestone, achieved in the first three quarters of 2025, signals a fundamental shift in the global power system.

According to data from the International Renewable Energy Agency (IRENA), global renewable power capacity amounted to 4,448 GW by the end of 2024. With 2025 additions projected at 793 GW, total renewable capacity will exceed 5.2 TW by year-end. This represents an 11% increase over the 717 GW added in 2024, maintaining the sector's trajectory toward the global goal of tripling renewable capacity by 2030.

1.1 Market Scale and Growth

The renewable energy market has achieved unprecedented scale, with the global market size reaching $1.4-1.5 trillion in 2025. This represents a compound annual growth rate of 12-15% over the past five years, establishing renewables as a dominant force comparable to entire national economies.

Global Renewable Capacity by Technology (2024)

Technology	Capacity (GW)	Share of Renewables	YoY Growth
Solar PV	1,865	42%	+30%
Hydropower	1,283	29%	+2%
Wind	1,133	25%	+12%
Bioenergy	151	3%	+5%
Geothermal	15	0.3%	+3%

Solar and wind together account for approximately 66% of total renewable capacity, with solar commanding the largest share at 42%. This dominance reflects the dramatic cost reductions and technological improvements these technologies have achieved over the past decade.

1.2 Regional Distribution

The geographic distribution of renewable capacity additions reveals significant regional disparities. China, the United States, and Europe together account for 84% of new renewable capacity added in 2024, highlighting the concentration of deployment in major economies.

The Asia-Pacific region controls 55% of the global renewable energy market ($700-800 billion), driven primarily by China's massive deployment. Countries outside the G7 and China have also achieved significant growth, with their wind and solar pipeline expanding from 2.7 TW to 2.9 TW in 2025.

However, the G7's wind and utility-scale solar pipeline has remained mostly unchanged at around 520 GW since 2023, despite IRENA's calls for these countries to more than double their annual renewable energy capacity additions through 2030. This misalignment between current pipelines and required progress represents a significant challenge for meeting global climate goals.

2. Solar Energy Analysis

Solar photovoltaic technology has cemented its position as the dominant force reshaping the global power system. In 2025, solar growth was more than three times larger than any other source of electricity, confirming its role as the primary driver of the energy transition.

2.1 Capacity Additions and Forecast

The global solar PV market is expected to grow by 10% in 2025, reaching 655 GW under the medium scenario according to Solar Power Europe's Global Market Outlook. This follows extraordinary growth of 85% in 2023 and 33% in 2024, representing a continuation of the deceleration trend but maintaining robust absolute growth.

Solar PV Market Scenarios for 2025

Scenario	Capacity (GW)	Growth vs 2024	Key Drivers
High	774	+30%	Low prices, policy stimulus
Medium	655	+10%	Continued cost competitiveness
Low	548	-8%	Policy headwinds, market contraction

The IEA forecasts that solar PV will account for nearly 80% of the total global renewable electricity capacity increase between 2025 and 2030. Growth in utility-scale and distributed solar PV is expected to more than double, representing the largest share of renewable expansion.

Key factors driving solar's continued expansion include:

• Low module costs: Record-low solar panel prices have made solar the most cost-competitive electricity source in most markets
• Efficient permitting: Streamlined approval processes in many jurisdictions have accelerated deployment timelines
• Broad social acceptance: Solar enjoys high public support compared to other energy technologies
• Versatility: Solar can be deployed at utility scale, distributed rooftop, and off-grid applications

2.2 Market Dynamics and Investment

Investment in solar energy reached record levels in 2025, though with notable shifts in capital allocation. While renewable energy investments overall rose 10% to $386 billion in H1 2025, asset finance for utility-scale solar was down 13%, reflecting an adverse policy environment in some key markets.

Small-scale solar emerged as a surprise winner in H1 2025 investments, driven by rising retail electricity prices and supportive policies for distributed generation. In Latin America, higher retail prices have spurred distributed solar PV system buildouts, while in Europe, residential PV growth has slowed due to policy changes.

China remains the dominant market, with solar capacity growing by 30% to 329 GW in 2024, representing a 55% global market share. However, China is implementing major changes to its solar market design in 2025, which may lead to a temporary dip in global growth in 2026.

3. Wind Energy Analysis

Wind energy, both onshore and offshore, continues to play a critical role in the renewable energy transition. While facing headwinds from policy changes and supply chain challenges, the sector maintains a robust long-term pipeline that positions it for significant growth through 2030.

3.1 Onshore Wind Developments

Onshore wind has demonstrated remarkable resilience in 2025. Awarded auction volumes in the first half of 2025 showed a significant shift in technology shares, with onshore wind accounting for around 33% of global auction volumes, the highest awarded capacity in any six-month period before 2024.

For the first time, onshore wind auction volumes were similar to awarded solar PV capacity. This surge results mainly from permitting condition improvements that addressed years of undersubscribed auctions, particularly in Germany.

The IEA forecasts that cumulative onshore wind capacity additions will increase 45% over 2025-2030 compared to 2019-2024, reaching 732 GW. Despite recent challenges concerning supply chain bottlenecks, inflation, and long permitting and grid connection wait times, strong onshore wind expansion is expected as policies in both advanced and developing countries have partly addressed these barriers.

Wind Energy Capacity Outlook (2025-2030)

Segment	2024 Additions	2030 Annual	Cumulative 2025-2030
Onshore Wind	~110 GW	~150 GW	732 GW
Offshore Wind	9.2 GW	37 GW	140 GW

3.2 Offshore Wind Expansion

Offshore wind represents one of the most dynamic segments of the renewable energy market, though it has faced significant challenges in 2025. The global offshore wind sector experienced a slowdown in new capacity additions, with only 6 GW installed worldwide in 2025 compared to 11.1 GW in 2024.

Despite this short-term slowdown, the long-term outlook remains strong. By the end of 2025, global offshore wind capacity in operation reached 84.5 GW, with more than 50% installed in China (42.31 GW). The global construction pipeline reached a record 33.3 GW, providing a strong foundation for accelerated deployment in the coming years.

The IEA has revised its global offshore wind capacity forecast down 27% from last year, reflecting policy changes in the United States, macroeconomic pressures, and supply chain challenges that have raised costs and undermined project bankability in several European markets and Japan.

The United States market has been particularly impacted by policy changes. The IEA revised its U.S. renewable capacity forecast down approximately 50% for the 2025-2030 period following executive actions that suspended offshore wind leasing and restricted permitting of onshore wind and solar PV projects on federal land. Wind energy specifically saw a 60% downward revision, representing 57 GW of capacity that is now unlikely to be built during the forecast period.

4. Investment and Policy Landscape

The renewable energy investment landscape in 2025 reflects both the sector's maturation and the increasing complexity of global energy policy. While overall investment flows remain robust, shifting policy environments are driving capital reallocation across regions and technologies.

Renewable energy investments set another record in the first half of 2025, rising 10% from the same period last year to reach $386 billion. However, this headline figure masks significant shifts in capital allocation. Investors are increasingly rethinking capital allocation and putting money where project returns are strongest, leading to geographic and technological rebalancing.

Key investment trends include:

• Capital reallocation: Signs of capital movement from the US to Europe are emerging, with major developers like TotalEnergies and RWE reducing US activity while expanding in the North Sea
• Small-scale solar surge: Distributed solar emerged as a surprise winner in H1 2025 investments, driven by retail price dynamics
• Utility-scale caution: Asset finance for utility-scale solar and onshore wind was down 13%, reflecting policy uncertainty in key markets
• Offshore wind repositioning: Major pension funds are rebalancing investment to Europe from the US in response to policy headwinds

The global pipeline of planned wind and utility-scale solar projects reached 4.9 TW in 2025, up 11% from 4.4 TW in 2024. This pipeline represents a significant milestone toward achieving global targets to triple renewable energy capacity, since wind and solar are expected to comprise 94% of renewable additions toward the tripling goal.

5. Conclusion and Outlook

The renewable energy sector has reached a watershed moment in 2025. Solar and wind are now expanding fast enough to meet all new electricity demand growth globally, a milestone that signals a fundamental shift in the energy landscape. Together, these technologies supplied 17.6% of global electricity in the first three quarters of 2025, pushing the total share of low-carbon sources to 43%.

For the first time across a sustained period, renewables generated more electricity than coal, marking a historic transition in the global power system. At the heart of this shift is solar energy, whose growth has been more than three times larger than any other source of electricity in 2025.

Looking ahead, several key factors will shape the renewable energy landscape:

Technology Leadership: Solar PV will continue to dominate capacity additions, expected to account for nearly 80% of renewable electricity capacity expansion through 2030. Cost competitiveness, improving efficiency, and versatility will drive continued adoption across all market segments.

Wind Recovery: While facing near-term headwinds, wind energy maintains a robust long-term pipeline. Offshore wind is projected to more than double its growth rate, reaching 37 GW annually by 2030. Policy clarity and supply chain stabilization will be critical for realizing this potential.

Geographic Rebalancing: The concentration of deployment in China, while driving global cost reductions, creates dependencies that may shift as other markets scale. Emerging markets are increasingly leveraging solar's potential to leapfrog fossil generation.

Investment Resilience: Despite policy uncertainties, capital continues to flow into renewable energy at record levels. The sector's fundamental economics remain compelling, with investors demonstrating willingness to reallocate across regions in pursuit of returns.

Tripling Target: At current growth rates, only a modest increase in annual additions is needed for the world to stay on track to triple global renewables by 2030. However, achieving this goal will require addressing the misalignment between current pipelines and required progress, particularly in G7 countries.