Global Solar PV Expansion to Reach New Record Pace

A new forecast by the IEA indicates that the expansion of renewable energy capacities in emerging and developing countries outside of China will, for the first time, match that of industrialized nations, as the Strait of Hormuz crisis shifts focus toward domestic energy sources.

Renewable energy, which was already growing at a record pace before the current energy crisis, is expected to see strong growth across a broader range of countries worldwide in the coming years, as governments seek to strengthen energy security and reduce their dependence on imported fuels and price volatility, according to the IEA’s latest report.

Renewables 2026, this year’s edition of the IEA’s annual report on the sector, projects that global renewable energy capacity will increase by nearly 4,800 gigawatts (GW) between 2026 and 2031—almost 60% more than in the previous six-year period. Solar photovoltaics will account for more than three-quarters of the global capacity growth in renewable energy by 2031, followed by onshore wind power.

Amid unprecedented turbulence in global energy markets since the outbreak of the Iran war in late February, stronger political support and heightened concerns over energy security are accelerating the expansion of renewable energy in India, Southeast Asia, Africa, and the Middle East. For the first time, the newly installed renewable energy capacity in emerging and developing countries outside China is expected to match the newly installed capacity in industrialized countries during the forecast period.

China will continue to make the largest contribution to the global increase in renewable energy capacity, but its share is expected to decline from over 60% in 2025 to an average of 53% over the forecast period, due to changes in renewable energy policy. India is emerging as the world's second-largest growth market, with total renewable energy capacity expected to more than double by 2031. Growth is also accelerating in Southeast Asia, the Middle East, North Africa, and Sub-Saharan Africa. In these regions, the newly installed renewable energy capacity during the 2026–2031 period is projected to nearly triple compared to the previous six-year period.

“Previously, environmental concerns were at the heart of policy behind the growth of renewable energy, whose declining costs have made it a competitive option in many markets – but today, it is primarily energy security that is driving the expansion of renewable energy, as an increasing number of countries seek to reduce their dependence on imported fuels,” said IEA Executive Director Fatih Birol. “The new chapter in the growth story of renewable energy is truly global, as its deployment is spreading to every corner of the world, far beyond the major markets. This makes it a cornerstone of the global power sector. Today, it accounts for a third of global electricity generation; in the next five years, it will approach half.”

The growth in newly installed renewable energy capacity is not only the result of large-scale projects by utilities and developers, but is also being driven directly by consumers in many countries. Faced with high fuel prices and unreliable power supply in some markets, households and small businesses around the world are increasingly turning to more affordable, quickly installable rooftop photovoltaic systems. According to the report, these small-scale installations have already helped improve electricity access for approximately 70 million households worldwide.

The report forecasts that the use of renewable energy in the transport sector will increase by more than 60% by 2031, at which point it will cover 6% of the sector's global energy demand. Electricity from renewable sources used by electric vehicles accounts for approximately 45% of this increase, while biofuels make the second-largest contribution. In direct response to high fuel prices and supply shortages, several countries, particularly in Southeast Asia and Latin America, have raised blending mandates, which set the minimum share of biofuels that must be blended into gasoline or diesel sold at fuel stations. Our forecast for biofuels has been revised upward by 40% compared to last year's report.

The report also underscores the importance of secure and diversified supply chains, as renewable energy is playing an increasingly significant role in energy systems worldwide. India is emerging as a key alternative source; its share of global solar PV module production is expected to nearly double to 17% over the next five years, thereby contributing to the diversification of a market that remains highly concentrated.

As solar PV and wind energy continue to expand rapidly worldwide, enhancing the flexibility of power grids will become critical for energy security, while also opening up new opportunities. Top priority must be given to investments in power grids that keep pace with the growth in renewable energy capacity. This should be complemented by reforms that accelerate the grid connection of new renewable energy facilities. The volume of renewable energy and storage projects globally in advanced stages and awaiting grid connection increased by 60% last year to 3,000 GW – four times the wind and solar PV capacity connected to the grid in the previous year.

Meanwhile, the deployment of battery storage has accelerated in many countries, offering a crucial means to rapidly enhance grid flexibility. Measures to increase the flexibility of electricity demand are equally important and can be implemented swiftly. Digital technologies, including artificial intelligence, can help shift demand to periods when renewable energy is abundantly available, thereby enabling better utilization of variable renewable generation sources. Together, these measures will be instrumental in ensuring that the rapid global expansion of renewable energy leads to a safer, more affordable, and more reliable energy supply.