Global Market Analysis and Strategic Outlook
Solar and Wind Energy Sector Review
This report provides a comprehensive analysis of global renewable energy trends in 2025, focusing on solar and wind energy markets. Our analysis draws on data from leading industry organizations including IRENA, IEA, BloombergNEF, and Global Energy Monitor.
Finding 1: Renewable capacity reached a historic milestone of 4.4 TW globally by end of 2024, with 2025 poised for continued expansion.
Finding 2: Solar energy continues to dominate new capacity additions, though growth rates are moderating from peak levels.
Finding 3: Wind energy faces headwinds with slower growth, particularly in offshore segments.
Finding 4: Policy uncertainty and supply chain challenges are reshaping investment patterns.
The global energy transition reached a significant inflection point in 2025. For the first time across a sustained period, renewables—including solar, wind, hydro and smaller sources such as geothermal—generated more electricity than coal. At the heart of this shift is solar energy, whose growth was more than three times larger than any other source of electricity so far in 2025, confirming its role as the dominant force reshaping the global power system.
According to IRENA's latest statistics, total renewable generation capacity reached 4,443 GW by the end of 2024, representing 46.2% of the 9.6 TW of global total capacity. This marks an unprecedented 15.1% increase from 2023, significantly higher than the 10.4% compound annual growth rate over the preceding five years.
The share of variable renewables (wind and solar) increased to 67.5% of renewable capacity, indicating a fundamental shift toward these more intermittent but rapidly deployable energy sources. Solar and wind energy continued to dominate renewable capacity expansion, jointly accounting for 97.5% of all net renewable additions in 2024.
| Technology | Capacity (GW) | Share | YoY Growth |
|---|---|---|---|
| Solar PV | 1,866 | 42.0% | +453 GW |
| Hydropower | 1,277 | 28.7% | +1.2% |
| Wind | 1,133 | 25.5% | +114 GW |
| Bioenergy | 151 | 3.4% | +2.1% |
| Geothermal | 15 | 0.3% | +0.3% |
Global investment in energy transition technologies reached nearly $2.1 trillion in 2024, setting a new record. Although investment has accelerated rapidly this decade—more than doubling since 2020—growth slowed last year, dropping to just 11% from 24-29% in each of the three prior years.
The three largest investment drivers are electrified transport at $757 billion, renewable energy at $728 billion, and power grids at $390 billion. Together these three sectors accounted for 90% of the total investment last year.
A decade ago, investments in fossil fuels were 30% higher than those in electricity generation, grids and storage. In 2025, electricity investments are set to be some 50% higher than the total amount being spent bringing oil, natural gas and coal to market.
Solar energy has emerged as the undisputed leader in the global renewable energy transition. In the first three quarters of 2025, solar electricity generation surged by 498 TWh, a 31% increase that already exceeded the total solar output for all of 2024. Together, solar and wind supplied 17.6% of global electricity in the first three quarters of 2025, up from 15.2% over the same period last year.
The global solar PV market is expected to grow by 10% in 2025, reaching 655 GW under the Medium Scenario. This marks a continuation of the deceleration trend following the extraordinary 85% growth in 2023 and the more moderate 33% in 2024.
| Scenario | 2025 Capacity (GW) | Growth | Key Assumptions |
|---|---|---|---|
| High | 774 | +30% | Sustained low prices, policy stimulus |
| Medium | 655 | +10% | Current market conditions |
| Low | 548 | -8% | Worsening market conditions |
Investment in solar, both utility-scale and rooftop, is expected to reach $450 billion in 2025, making it the single largest item in the global energy investment inventory. Battery storage investments are also climbing rapidly, surging above $65 billion this year.
China continues to dominate the global solar market, accounting for approximately 70% of global installations. The country has passed 1.6 TW of operating wind and solar projects combined, cementing its position as the world's renewable energy leader.
In 2025, solar strengthened in markets that had long trailed behind the global leaders. Several countries outside the traditional frontrunners like China and Europe are now recording sharper growth thanks to falling costs, easing supply bottlenecks and clearer policy signals.
The United States built the most new power-generating capacity in more than two decades in 2025 with 54 GW of new utility-scale generation and storage capacity commissioned. Renewables accounted for 61% of new capacity, with utility-scale solar specifically leading with 27 GW alternating current commissioned.
Despite the impressive growth figures, the solar industry faces several headwinds:
The wind energy sector experienced a more challenging year in 2025 compared to solar. Year-on-year growth in the wind and utility-scale solar pipeline has slowed from 22% in 2024 to 11% in 2025. This trend is more pronounced for wind projects, with a 13% drop from 2024 compared to a 7% drop for solar projects.
Onshore wind showed resilience in certain markets. Germany awarded 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.
Compared with 2019-2024, the IEA forecast expects cumulative onshore wind capacity additions to increase 45% over 2025-2030, reaching 732 GW. Annual additions are expected to rise in Africa, the Middle East, ASEAN countries, Latin America and Eurasia.
The offshore wind sector faced significant challenges in 2025. Only 6 GW of offshore wind capacity was taken into operation worldwide, significantly less than the 11.1 GW installed in 2024. This reflects a challenging year marked by rising costs, geopolitical turbulence and policy recalibrations.
Policy changes in the United States, macroeconomic pressures and supply chain challenges have raised costs and undermined project bankability in several European markets and Japan. As a result, the IEA has revised the global offshore wind capacity forecast 27% downwards from last year.
Despite these near-term challenges, the industry's underlying momentum remains robust. By the end of 2025, 33.3 GW of offshore wind capacity was under construction globally. By year-end, global offshore wind capacity in operation reached 84.5 GW, with more than 50% installed in China (42.31 GW).
| Region | Operating (GW) | Construction (GW) | 2030 Proj. (GW) |
|---|---|---|---|
| China | 42.3 | ~16 | ~70 |
| Europe | ~30 | ~12 | ~75 |
| United States | ~0.04 | ~3 | ~15 |
| Rest of World | ~12 | ~2 | ~25 |
Looking ahead, cumulative offshore wind capacity is forecast to grow significantly, reaching 396 GW by 2034 with Europe accounting for 45% of this capacity. Offshore wind capacity expansion is expected to reach 140 GW over the 2025-2030 forecast period, 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. In Europe, the annual market is expected to approach 14.6 GW by 2030.
The renewable energy sector in 2025 presents a picture of continued growth amid increasing complexity. While solar and wind technologies are expanding fast enough to meet all new electricity demand—a milestone reached in the first three quarters of 2025—the pace of growth is moderating and facing new headwinds.
1. Solar Dominance Continues: Solar PV remains the primary driver of renewable energy growth, with investment reaching $450 billion in 2025. However, the industry must navigate policy uncertainty, supply chain disruptions, and grid integration challenges to maintain momentum.
2. Wind Energy at an Inflection Point: The wind sector, particularly offshore wind, faces a critical period of adjustment. Cost pressures, policy changes, and supply chain challenges have led to forecast downgrades. Success will depend on addressing permitting bottlenecks, improving project execution, and restoring investor confidence.
3. Regional Divergence: Growth patterns are increasingly diverging by region. China continues to lead in absolute capacity additions, while Europe focuses on offshore wind and grid integration. Emerging markets are showing strong potential for solar leapfrogging, while the US market faces policy headwinds.
4. Investment Reallocation: Signs of capital reallocation from the US to Europe are emerging as investors seek policy stability. Small-scale solar emerged as a surprise winner of H1 2025 investments, while utility-scale project finance declined.
The world is set to add 793 GW of renewable capacity in 2025, up 11% from the 717 GW added in 2024. At this pace, 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 target will require addressing key policy, grid integration, financing and permitting challenges in the short term.
The renewable energy transition has reached a mature phase where technology costs are no longer the primary barrier. Instead, success will depend on navigating policy complexity, building grid infrastructure, and creating stable investment environments that can support the massive capital deployment required for a global energy system transformation.