Executive Summary

1. Global Renewable Energy Overview

The renewable energy landscape in 2025 marks a pivotal moment in the global energy transition. At the end of 2024, global renewable power capacity reached 4,448 GW, with solar energy accounting for the largest share at 1,865 GW, followed by hydropower at 1,283 GW and wind energy at 1,133 GW.

The International Energy Agency's medium-term forecast projects that renewable sources will become the largest global energy source, generating almost 45% of electricity by 2030—an increase of 60% from 9,900 TWh in 2024 to 16,200 TWh in 2030.

Global Capacity by Technology (2024)

Source: IRENA Renewable Capacity Statistics 2025

2. Solar Energy Market Analysis

Solar photovoltaic technology continues to lead the renewable energy revolution, driven by declining module costs, improved efficiency, and supportive policy frameworks. The IEA projects that solar PV will account for some 80% of the increase in the world's renewable capacity over the next five years.

2.1 Growth Drivers and Capacity Expansion

The solar sector is experiencing remarkable expansion. Year-on-year analysis predicts a record year for solar additions in 2025, nearing 600 GW of added capacity, largely due to an increase in distributed solar applications. Annual installations are expected to exceed 600 GW by 2029, approaching the 700 GW threshold by 2030.

Distributed solar PV applications—including residential, commercial, industrial, and off-grid projects—account for 42% of the overall PV expansion. Higher retail electricity prices following the energy crisis, combined with strong policy support, have encouraged individuals and businesses to install solar PV systems to reduce electricity bills.

Key Growth Drivers

• Low module costs and relatively efficient permitting processes
• Broad social acceptance of solar technology
• Growing use of distributed solar with storage units in regions with unreliable grids
• Rapid uptake in commercial and large-scale off-grid systems in South Africa and Pakistan

2.2 Regional Market Dynamics

While China continues to dominate global solar manufacturing and deployment, emerging markets are showing significant growth potential. The IEA has revised forecasts upward for several key regions:

3. Wind Energy Market Analysis

Wind energy represents the second-largest contributor to renewable capacity growth, with both onshore and offshore segments showing strong momentum. Global wind power capacity is projected to nearly double to over 2,000 GW by 2030, driven primarily by China and the European Union.

3.1 Onshore Wind Developments

Onshore wind continues to be the workhorse of the wind industry. Compared with the previous period (2019-2024), the IEA expects cumulative onshore wind capacity additions to increase 45% over 2025-2030, reaching 732 GW.

Germany has emerged as a standout market, awarding nearly 11 GW of new onshore wind capacity in tenders—an all-time high representing a remarkable 70% increase year-on-year. This surge results mainly from permitting condition improvements that addressed years of undersubscribed auctions.

3.2 Offshore Wind Expansion

The offshore wind sector is experiencing unprecedented growth. Global offshore wind capacity reached 78.5 GW by the end of 2024, representing a 16.3% increase from the previous year. The industry added 11 GW of new capacity in 2024 alone.

Capacity expansion is on course to top 140 GW, more than doubling the growth of the previous five-year period. The annual offshore wind market is expected to expand from 9.2 GW in 2024 to over 37 GW by 2030, with China accounting for almost 50% of this increase.

The technical advantages of offshore wind are compelling: stronger, more consistent winds deliver capacity factors of 35-50% compared to 25-35% for onshore wind, while modern turbines generating 4-15 MW each provide economies of scale impossible to achieve on land.

4. Investment and Financing Trends

Global energy transition investment reached a record $2.3 trillion in 2025, up 8% from the prior year. While renewable energy investment experienced a 9.5% year-on-year decline to $690 billion, the sector remains the second-largest recipient of clean energy funding after electrified transport.

Investment by Sector (2025)

Regional Investment Distribution

The geography of energy investment is shifting in ways that will have long-term implications. Asia Pacific remained the largest region for investment, accounting for 47% of the global total in 2025.

5. Conclusion and Outlook

The renewable energy sector in 2025 stands at an inflection point. With global capacity set to double by 2030 and investment flows reaching unprecedented levels, the transition to clean energy is accelerating faster than many anticipated. However, several challenges remain that will shape the trajectory of growth.

Key Outlook Themes

1. Supply Chain and Grid Integration

As renewables' role in electricity systems rises, policymakers need to pay close attention to supply chain security and grid integration challenges. The IEA has lowered its renewable energy growth forecast for 2025-2030 by 5% compared to last year, reflecting policy, regulatory, and market changes.

2. Technology Cost Trajectories

Continuously declining technology and power costs, along with energy security benefits, will significantly accelerate renewable energy capacity deployment across most countries. Solar module prices are expected to remain low thanks to investments in manufacturing capacity.

3. Emerging Market Growth

Asia is on course to be the hottest market for renewable energy deployment. Solar is set to surge in economies such as Saudi Arabia, Pakistan, and several Southeast Asian countries. Growth in emerging markets in Central Asia and MENA is expected to gain momentum.

4. The 2030 Tripling Goal

Achieving the COP28 goal of tripling renewable energy capacity globally to 11,000 GW by 2030 will require more than 6,700 GW of additional capacity, or an average of more than 950 GW per year. Current trajectories suggest the industry is well-positioned to meet this ambitious target.