2. Solar Energy Sector

Solar photovoltaic (PV) technology has emerged 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

Global solar installations surged 64% in the first half of 2025, with 380 GW of new capacity added compared to 232 GW during the same period in 2024. In 2024, global solar capacity additions did not surpass 350 GW until September, whereas in 2025, this milestone was reached by June.

The rapid expansion of solar capacity has positioned it as the fastest-growing source of new electricity generation. In 2024, global solar output rose by 28% (+469 TWh) compared to 2023, outpacing all other energy sources.

Country/Region	H1 2025 Additions	Global Share	YoY Growth
China	256 GW	67%	+100%+
India	24 GW	6%	+49%
United States	21 GW	6%	+4%
Rest of World	79 GW	21%	+22%

China's dominance in the solar market continues to grow. In the first half of 2025, China added more than twice as much solar capacity as the rest of the world combined, making up 67% of the global total, up from 54% in the same period of 2024.

2.2 Investment Trends

Solar PV investment is projected to reach $450 billion in 2025, making it the single largest energy investment category globally. This represents a significant shift in capital allocation, with solar attracting more investment than oil and gas exploration combined.

Market-based procurement mechanisms are becoming increasingly important, accounting for 28% of renewable capacity growth in the current forecast compared to just 15% in the previous year's analysis. This growth stems largely from power market reforms in China and increasing corporate power purchase agreements (PPAs) in Europe.

3. Wind Energy Sector

The wind power sector recorded strong growth in the first half of 2025, with global installations rising by 64% compared to the same period of 2024. A total of 72.2 GW of new capacity was added between January and June 2025, bringing total installed wind power capacity to 1.245 TW.

3.1 Onshore Wind

Onshore wind continues to dominate the wind energy landscape, accounting for the majority of new installations. China led global onshore wind additions with 51.4 GW in the first half of 2025, more than double the previous year.

Germany achieved a significant milestone by awarding nearly 11 GW of new onshore wind capacity in tenders, an all-time high representing a 70% increase year-on-year. This reflects strong policy support for the country's industrial base and energy security needs.

Market	H1 2025 Additions	Notable Developments
China	51.4 GW	More than doubled previous year
Germany	11 GW (awarded)	All-time high in tenders
United States	8.1 GW (projected)	Regulatory uncertainty affecting orders
Brazil	Declining	New legislation on offshore wind

3.2 Offshore Wind

Offshore wind faces multiple challenges, with forecast growth over the next five years revised down by more than 25% compared to earlier projections. Several developers have reduced their 2030 deployment targets due to higher costs and supply chain challenges.

Policy shifts in the United States, including the suspension of new offshore wind leasing and restrictions on permitting, have contributed to lower growth expectations. Project cancellations and delays have also affected markets in Europe, Japan, and India.

However, emerging markets show promise. Brazil's recently passed legislation on offshore wind, green hydrogen, and industrialization is expected to create new opportunities in a country already considered a wind energy leader. South Africa's Integrated Resource Plan positions wind as a cornerstone of the country's energy mix over the next decade.

4. Key Challenges and Opportunities

4.1 Grid Integration and Flexibility

As variable renewable energy (VRE) deployment accelerates, grid integration challenges are becoming more pronounced. Curtailment is rising with VRE expansion as countries race to deploy measures to increase flexibility and storage.

Hydropower growth from 2025 to 2030 is expected to contribute more than 154 GW of new capacity, with pumped-storage hydropower (PSH) capacity forecast to double to 16.5 GW by 2030. This growth is driven by the increasing need for flexibility and long-term storage to balance variable renewable generation.

4.2 Investment Disparities

Despite record investment levels, significant disparities persist. Clean energy investment reached over $2 trillion in 2025, double the 2020 levels, but well below the $5.6 trillion needed annually through 2030 to meet climate goals.

Investment remains concentrated in advanced economies and China, with emerging economies expected to drive 80% of future energy demand growth but receiving disproportionately less capital. This imbalance poses a significant challenge to achieving global climate targets.

4.3 Policy and Regulatory Environment

The renewable energy growth forecast for 2025-2030 has been revised down by 5% compared to last year's report, reflecting policy, regulatory, and market changes. The forecast for the United States is revised down by almost 50% due to policy changes including:

• Earlier phase-out of federal tax credits
• New import restrictions
• Suspension of new offshore wind leasing
• Restrictions on permitting of onshore wind and solar PV projects on federal land

China's shift from fixed tariffs to auctions is also impacting project economics and lowering growth expectations, though the country continues to account for nearly 60% of global renewable capacity additions.

4.4 Technology Innovation

Key trends to watch include the role of AI in expanding renewable capabilities, technological innovations in renewable solutions, and advancements in cleantech manufacturing. The integration of AI and digital technologies is expected to enhance grid management, improve forecasting accuracy, and optimize renewable energy operations.

5. Conclusion and Outlook

The renewable energy sector in 2025 demonstrates remarkable momentum, with solar and wind technologies leading an unprecedented expansion of clean energy capacity. Global renewable power capacity is on track to expand by approximately 4,600 GW between 2025 and 2030, a pace that doubles the cumulative additions of the previous five-year period.

Solar PV has firmly established itself as the dominant technology, with investment reaching $450 billion in 2025 and capacity additions surging 64% year-on-year. Wind energy continues to provide significant contributions, with total installed capacity reaching 1.245 TW and supplying approximately 12% of global electricity demand.

However, several challenges must be addressed to maintain this momentum:

• Investment gaps: Current investment levels, while record-breaking, remain well below the $5.6 trillion annually needed through 2030.
• Regional disparities: Concentration of investment in advanced economies and China leaves emerging markets underserved despite their growing energy demand.
• Grid integration: Accelerated deployment of storage and flexibility solutions is essential to manage increasing shares of variable renewables.
• Policy stability: Regulatory uncertainty in key markets poses risks to project development and investment decisions.

Looking ahead, the renewable energy sector is positioned for continued growth, with technological innovation, falling costs, and increasing policy support driving deployment. The industry stands ready to triple growth to the 320 GW annually necessary to reach global climate goals, provided the right policy conditions and investment frameworks are in place.