According to a new report by DNV, global solar photovoltaic (PV) capacity is set to exceed 3 terawatts (TW) by the end of 2025, with China and Europe leading the way. The report predicts that the share of solar in global power generation will rise significantly, reaching 20% by 2029 and potentially 40% by 2045. As costs decline, behind-the-meter (BTM) systems are expected to contribute substantially to this growth, alongside traditional utility-scale installations.
The DNV Energy Transition Outlook 2025 has revealed that solar PV currently constitutes 10% of the world’s power generation, with projections suggesting this could double within the next six years. By 2060, solar and wind combined are forecasted to supply 79% of global electricity, with solar making up 47% and wind contributing 32%. Additionally, by 2030, these two energy sources will account for 32% of the energy mix.
The report indicates that decreasing costs for solar panels and batteries are enhancing the adoption of BTM systems, projected to represent 30% of all solar capacity by 2060 and 13% of global power generation. Analysts expect that starting from the mid-2030s, nearly half of all new solar installations will include storage, a significant increase from the current 6.6%. Moreover, distributed generation is expected to increase significantly, likely surpassing utility-scale solar installations in key regions.
While utility-scale solar installations are anticipated to decline in the early 2030s due to factors such as grid constraints and competitive pricing from onshore wind, DNV foresees the levelized cost of electricity (LCOE) for solar stabilizing over the coming years. The report estimates that LCOE for solar will see an average annual reduction of about 5% through the end of the decade, down from 8% previously. By the 2030s, it is expected to further decrease to 3% and eventually drop below 1% in the 2050s.
The decline in solar module costs, largely driven by China’s expansive manufacturing capabilities, has resulted in modules now accounting for only 18% of the capital expenditure for utility-scale projects. The remaining costs comprise installation, labor, and grid expenses. Future savings are anticipated to stem from improved installation efficiencies and advances in other related technologies.
Overall, DNV analysts assert that the global energy transition will persist through the 2050s, despite various policy challenges, particularly in the U.S. They conclude that while the speed of the transition may vary, the movement towards renewable energy sources like solar, wind, and batteries is unavoidable, as these technologies increasingly outperform fossil fuels across a growing range of applications. The full report is available for free download on DNV’s website.