Global Solar PV Market Review 2023

Last Updated on 28th February 2024

The global energy landscape is undergoing a transformative shift as the world strives to address climate change and ensure a sustainable future. Renewable energy sources, particularly solar power, are playing a pivotal role in this energy transition.


In 2022, solar power's expansion surpassed all other power generation technologies. Two-thirds of the new renewable power capacity installed last year was attributed to solar photovoltaic (PV), marking the highest growth rate in electricity generation across all power generation technologies at 24%. Despite this significant advancement, solar energy still only supplies less than 4.5% of the world's electricity needs, with non-renewable sources accounting for the majority.


As we approach the conclusion of 2023, it becomes evident that the solar industry has continued its trajectory of remarkable growth and innovation. The year has witnessed not only record-breaking installations but also pioneering technological advancements, underscoring the industry's vast potential to provide the planet with clean and abundant energy.


Table of Content

Global Solar Capacity Growth
Policy and Regulatory Developments
Technological Advances
Major Market Trends
Industry Challenges
2024 Outlook


Global Solar Capacity Growth

During the initial half of 2023, there was a substantial year-over-year increase in photovoltaic (PV) installations in China, soaring by 153% relative to 2022. Similarly, Germany experienced a noteworthy surge of 102%, while the United States saw a more moderate increase of 34%.


Conversely, India observed a significant contraction of 47% in PV installations in the first 3 quarters of 2023 compared to the same period in the previous year due to delays in project executions owing to land and transmission issues.


According to our global solar power market report, the global solar photovoltaic (PV) industry is on track for a new record of annual solar deployments of around 310 GW in 2023, an increase of 29.7% compared to 239 GW of solar capacity installed in 2022.


Global Solar PV Annual Additions, 2019-2023, in GW


The aggressive solar capacity additions in China were a major reason for this increase. By the end of Q3 2023, the nation had added 128.94 GW of solar PV.


With an average of 15 GW installed per month, China is likely to exit 2023 with more than 170 GW of PV capacity, which is more than the capacity additions by the US, the EU, and India combined.


In 2023, significant milestones have been achieved in the solar power sector, with major projects coming online. One notable example is the launch of the 900 MW phase five of the Mohammed bin Rashid Al Maktoum solar park in the UAE, which was inaugurated in June 2023.


(For a detailed list of major upcoming and under construction solar power projects, you can refer to our exhaustive Global Solar Database)


By the end of 2023, major solar power-deploying nations, and regions, such as the United States, the European Union, and India, are expected to add together 96.4 GW of annual solar power capacity.


Additionally, other nations that are actively adding solar to their power grids are Japan, Vietnam, South Korea, Brazil, and Australia. Considering the rate of solar power additions in all the above nations, which hold most of the solar power capacity, the global solar additions are expected to surpass the 310 GW mark.


This remarkable growth in solar installations is primarily due to factors such as aggressive solar capacity additions in China owing to increased solar competitiveness in both distributed and utility scale solar applications. Additionally, increasing awareness for the attractiveness of solar power has played a crucial role.


Other major factors driving the global solar power additions are declining solar equipment prices, rising energy security concerns in Europe, and, most importantly, supportive government policies and regulations.

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Policy and Regulatory Developments

In 2023, the positive outcomes of policies introduced in 2022 became evident, shaping notable developments in the solar industry in different regions around the globe.


One key example is the Inflation Reduction Act (IRA), enacted in August 2022, which has emerged as a pivotal catalyst for renewable energy in the United States throughout 2023.


Since the implementation of the IRA, the global solar supply chain has seen the announcement of an impressive 240 GW of manufacturing capacity. This not only signals the potential creation of over 22,000 jobs but also represents a substantial investment exceeding USD 12 billion. This expansion encompasses the establishment of 72 new facilities or expansions.


On another front, the European Union took a significant step by formally adopting the new Renewables Energy Directive in 2023, which elevates the 2030 target for the share of renewable energy in the EU's overall energy consumption from 32% to 42.5%. The revised directive introduces a fresh set of initiatives aimed at facilitating the approval of renewable energy projects.


The directive's objective is to expedite the deployment of renewable energies within the framework of the EU’s REPowerEU plan, which already offers provisional support for special measures by national governments. These new legal provisions are anticipated to boost the Europe solar power market.


On the other hand, the provincial-specific solar PV installation targets under its renewable energy plans across 26 provinces as part of its 14th five-year planning period are driving the China's solar power market, the largest in the world.


In India, a key player in global solar power expansion, government policies have played a pivotal role in driving the nation's solar energy initiatives. Notably, in 2023, the Indian government extended the timeline for the development of solar parks and ultra-mega solar projects. Under this extension, the timeline for the Solar Park Scheme now stretches until the fiscal year 2025-26, specifically until March 31, 2026, without incurring any additional financial implications.


The government remains steadfast in its commitment to advancing solar parks and ultra-mega solar power projects, with an ambitious target of establishing a minimum of 50 solar parks boasting a collective capacity of 40,000 MW.


As of October 31, 2023, approvals have been secured for 50 solar parks across 12 states, with a sanctioned capacity reaching 37,490 MW. Out of this total, 10,237 MW of solar projects have already been successfully commissioned within 18 solar parks.


Technological Advances

Transition to TOPCon and HJT Technologies

The photovoltaic sector has been diligently focusing on improving the efficiency of photovoltaic (PV) modules while simultaneously working towards achieving greater affordability in the electricity generated.


In order to sustain and enhance these efficiencies, the industry has been transitioning away from traditional PERC (Passivated Emitter and Rear Contact) solar cells towards more advanced technologies, namely TOPCon (Tunnel Oxide Passivated Contact) and HJT (HeteroJunction Technology).


TOPCon and HJT are advanced solar cell technologies designed to push the efficiency boundaries of solar cells by utilizing innovative passivation techniques and material combinations, offering potential improvements over conventional PERC cells currently used.


As of 2023, these emerging technologies, TOPCon and HJT, are poised to outperform PERC solar cells in terms of efficiency, with 26% efficiency compared to PERC's 24%, reflecting the current developmental status.


However, these advancements have ushered in new challenges for the industry. The primary challenges faced by TOPCon and SHJ (silicon heterojunction) solar cells are twofold. Firstly, the metal contacts in these cells are susceptible to corrosion.


Notably, TOPCon cells exhibit a high susceptibility to corrosion of front contacts, particularly when exposed to water penetration. Similarly, HJT solar cells, utilizing low-temperature metallization paste on both sides, are also prone to corrosion. Unfortunately, once corrosion occurs, it is irreversible and cannot be remedied in the field.


Secondly, the thin films utilized in both TOPCon and HJT solar cells demonstrate sensitivity to light exposure. UV light has an impact on both types, with HJT cells exhibiting increased sensitivity to other solar spectrum wavelengths.


These challenges with solar panels employing the latest technologies can lead to a decline in performance of up to 50% in just a few years in some cases, raising concerns about the longevity of these panels.


To address these challenges, there is a concerted effort to establish rapid testing methods that expedite the identification of failure modes. These methods facilitate quicker assessments of mitigation strategies and expedite the development of subsequent product generations.


Milestone in Perovskite Research and Leveraging AI for Perovskite Cell Production

Another significant stride in solar technology development pertains to Perovskite materials, renowned for their capacity to 'tune' the wavelengths of absorbed light, offering a promising alternative to traditional high-purity silicon wafers utilized in conventional solar cells.


The year 2023 has marked two notable breakthroughs in perovskite technology, with one leveraging artificial intelligence and potentially paving the way for more efficient and cost-effective solar cells.



In July 2023, the National Centre for Photovoltaic Research and Education (NCPRE) at the Indian Institute of Technology Bombay (IITB) achieved a milestone by developing a perovskite solar cell (PSC) with a demonstrated efficiency exceeding 26 percent. Similarly, researchers at Northwestern University significantly improved perovskite solar cell efficiency to 25.1%, surpassing the previous best of 24.09%.


Concurrently, an Australian research team comprising members from RMIT, Monash University, and the national science agency CSIRO has integrated artificial intelligence (AI) into the production of perovskite solar cells.


Traditionally, the creation of perovskite cells has been a labor-intensive and error-prone process, often likened to alchemy rather than science. This team circumvented years of manual labor by incorporating AI, markedly reducing human error and streamlining cell production. Their machine-learning model predicts numerous promising chemical recipes for new perovskite solar cells, enabling rapid innovation.


These developments represent crucial milestones in the field of solar energy. The increased efficiency achieved, rapid developments in new panel technologies (TOPCon and HJT), and the innovative application of AI are reshaping the landscape of solar energy technology.


As these technologies continue to progress, they hold the promise of enhancing the feasibility of solar cells and playing a central role in the global shift toward more sustainable and economical energy solutions.


Major Market Trends

Declining Solar Module Prices Globally

In 2023, there was a significant drop in solar PV module prices, with the average price falling by more than 34% since the beginning of the year as polysilicon material prices plummeted. This is attributed to the decrease in polysilicon prices, a consequence of the industry's over-expansion of production capacity over the past two years, which followed a severe polysilicon supply shortage.


During the initial half of 2023, the solar energy market recorded a significant 50% reduction in polysilicon material prices. The primary reason is the aggressive expansion strategies of solar manufacturers in China, with silicon wafers, rods, and slices reaching an impressive 442 GW. Additionally, the production of silicon materials reached 760,000 tons, and collectively, solar modules and batteries approached a capacity of 1,100 GW during this period.


The decrease in module prices is anticipated to have positive implications for solar power installations on a global scale, with significant repercussions for major nations. A noteworthy example is India, where there is a concerted effort to rapidly expand solar power capacity.


Given that approximately 90% of India's solar power equipment is imported from China, this price drop is expected to influence the nation in several ways.


Firstly, it may erode the competitiveness of Indian manufacturers compared to Chinese modules in the coming months.


Secondly, there is a possibility of a reduction in India's solar equipment import bill. Lastly, the decline in module prices could stimulate the development of local solar power generation capacity. This comes at a crucial time for India, as the country aims to add an ambitious 50 GW of renewable energy capacity annually until 2030.


Increasing Efforts to Develop Local Solar Supply Chains

While the reduction in module prices is advantageous for nations heavily reliant on China, the associated supply chain dependence poses a significant challenge for these countries. From EU nations to the US, India, Mexico, and Indonesia, there is a concerted effort to devise strategies for establishing domestic solar technology supply chains.


Both the US and the EU are actively working to reduce their reliance on China, while manufacturing powerhouses such as India and Mexico perceive the opportunity to fulfill the increasing domestic and international demand for solar technology components.


Notably, the United States is taking the lead in announcing plans for solar manufacturing. If all these announcements come to fruition, the country's solar manufacturing output could witness a tenfold increase within just three years.


Accelerated Solar Deployment in Europe Owing to Energy Security

Europe has witnessed remarkable expansion in distributed solar energy since the commencement of the Russia-Ukraine conflict. While certain markets face slight limitations in installations due to interest rate hikes and inflationary pressures, the economic viability of solar system remains compelling, attributed to the inherently higher retail energy prices.


Throughout 2022, auction activity experienced a significant slowdown due to low ceiling bid prices in comparison to rising equipment costs. However, the landscape is changing in 2023 as auction participation in Europe is on the upswing. Notably, the latest German government tender in August 2023 garnered record subscription levels, resulting in the allocation of 1.7 GW of solar capacity.


Rising energy price concerns are propelling interest in rooftop buildouts. Germany is leading the distributed solar additions in the region and is expected to remain in the leading position in the future, installing as much residential and C&I capacity as the next three top European markets combined.


Integration of Energy Storage Systems

In 2023, there has been a noticeable trend toward increased integration of solar power systems with energy storage, particularly through the incorporation of batteries. This integration addresses the intermittent nature of solar power and aims to ensure a continuous and uninterrupted power supply.


Some nations have taken regulatory measures to enforce the mandatory integration of energy storage systems with solar installations. For example, a compelling driving force has been the compulsory allocation policy for energy storage in new projects, including solar + storage, which has been in effect since the end of 2020.


Industry Challenges

Grid Infrastructure

The challenges stemming from limitations in grid infrastructure serve as significant obstacles to the widespread deployment of solar power. Many countries worldwide are grappling with aging grid systems that were not initially designed to accommodate the variable and decentralized nature of solar power. The shortage in grid capacity, coupled with insufficient interconnections between countries, can lead to grid instability and necessitate the curtailment of solar power generation.


An illustrative example can be observed in Chile, where a high penetration of renewables on a constrained grid has resulted in substantial curtailment and pronounced suppression of wholesale market prices.


Similar challenges are emerging in Europe, particularly in Spain, where the decline in capture prices (the prices that solar projects actually earn in wholesale markets) outpaces other European markets in the first half of 2023. Record levels of photovoltaic (PV) installations and limited interconnection capacity are anticipated to continue challenging project economics in the years to come.


Lack of a Skilled Workforce

A lack of technical know-how and skilled labor is impeding the growth of the solar energy industry. The swift expansion of solar capacity necessitates a proficient workforce capable of designing, installing, and maintaining solar systems. Unfortunately, many countries worldwide confront a scarcity of skilled labor in the solar sector. This shortage can significantly impact the quality and efficiency of solar projects.


Some of the Other Challenges

The prolonged permitting processes, lack of land availability in certain regions such as Southeast Asia, unclear and inconsistent policy frameworks in some nations are impeding the growth of global solar power industry.


2024 Outlook

China continues to dominate the global solar power supply chain and is aggressively expanding its manufacturing capacity. In 2023, the nation saw investments of around USD 130 billion in creating new manufacturing capacities, with much more planned for the next two years across the supply chain, which is expected to ensure Chinese dominance of the supply chain until 2032.


However, the nation is also facing the oversupply crisis, since China’s solar module manufacturing is already more than the estimated global demand for solar modules contributing significantly to the module price drop in 2023. Major module producers have delayed or cancelled capacity expansion plans and even curtailed production, partially addressing overcapacity issues.


As a response to China's oversupply, major nations such as India and the United States are developing indigenous solar supply chains to reduce Chinese dependence and are expected to increase the supply of solar equipment in the global market, further declining prices.


The Inflation Reduction Act (IRA) of 2022, regarded as one of the United States' most ambitious green energy legislations, is anticipated to unveil its effects in 2024, significantly influencing the global solar PV market.


The enactment of new incentives under IRA necessitated fresh guidance from the internal revenue services (IRS) and the establishment of innovative programs. This process has been time-consuming, marked by the issuance of multiple sets of guidance by the IRS over the past year, with additional guidance still expected. As clarity emerges regarding rules and regulations, the industry is poised for further growth.


In H1 2023, the top 10 solar PV module manufacturers collectively accounted for an impressive 160 GW, reflecting a substantial 57% year-on-year increase. Additionally, the top five cell manufacturers shipped a combined total of 84 GW of cells, marking a significant 49% year-on-year growth. These industry leaders currently exert a dominant influence on the solar PV sector and are anticipated to maintain their stronghold in 2024.


The 28th Conference of Parties (COP 28) held in Q3 of 2023, witnessed a further sign of growing consensus on the issue of climate change. Over 110 countries signed on to a pledge agreeing to triple the installed capacity of global renewable energy by 2030, a goal that is being seen as crucial to keeping the rise in global temperatures within 1.5 degrees Celsius from pre-industrial times.


Moreover, in a separate announcement made at the COP28 climate summit in Dubai, the United States pledged USD 3 billion to the Green Climate Fund, the main financial instrument that channels climate money to developing countries. These events could significantly boost the demand for clean energy solutions like solar power in these nations.


Ongoing tender rounds throughout the European continent, coupled with the expansion of power purchase agreements (PPAs), are poised to guarantee substantial capacity growth in the forthcoming years. The continued development of PPA hubs in Spain and the Nordics will serve as persistent incentives for infrastructure buildout.


Additionally, emerging markets in Eastern Europe present significant untapped potential for further expansion in the region.


The overall combination of lower module prices, increased adoption of distributed PV systems, and policy initiatives promoting large-scale deployment is promoting annual additions in key markets, encompassing China, the European Union, the United States, and India.


However, the growth is expected to be slower relative to the growth rate in the past few years, owing to the grid infrastructure development which is not keeping pace with the solar projects deployment globally. The solar modules cost is anticipated to decline further due to the oversupply issue, and the China made modules will flood the markets of many nations barring a few with stringent anti-dumping laws such as India and the United States which are developing their domestic solar PV supply chain.



The year 2023, has not only witnessed unparalleled growth in solar capacity, particularly in nations like China, Germany, and the United States, but also significant technological advancements that promise to reshape the future of solar energy. The rapid development and deployment of efficient and cost-effective photovoltaic technologies, such as TOPCon, HJT, and perovskite solar cells, are leading us towards a more sustainable and economically viable energy landscape.


The efforts of governments and regulatory bodies worldwide to shape supportive policies have been instrumental. Initiatives like the Inflation Reduction Act in the United States, the Renewables Energy Directive in the European Union, and various national policies in China and India have catalyzed the industry’s growth. These policies not only promote the expansion of solar capacity but also drive the development of local solar supply chains, reducing dependence on imports and fostering economic growth in the sector.


Moreover, the industry is navigating through challenges such as the need for improved grid infrastructure and skilled workforce development. Addressing these challenges is crucial for the continued expansion and integration of solar energy into global power grids.


Looking ahead to 2024, the solar power industry is poised for further growth though at a slower pace relative to the former few years. The combination of lower module prices, increased adoption of distributed PV systems, and strong policy support is expected to drive substantial capacity additions in key markets. The global commitment to renewable energy, as seen in international agreements and pledges, underscores the critical role solar power will play in meeting climate goals and ensuring energy security.


In conclusion, the solar power industry is not just growing; it is evolving rapidly, embracing new technologies, and overcoming challenges. It stands as a beacon of progress in the global collective pursuit of a cleaner, more sustainable future. The next few years will undoubtedly be pivotal in determining the trajectory of global energy and climate change mitigation efforts.


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