Global Solar Market Faces Pressure; Long-Term Growth Intact

Global solar PV industry is likely to face a difficult near-term outlook due to continued excess capacity and policy uncertainty, according to Bloomberg New Energy Finance (BloombergNEF) Solar Analyst Youru Tan. Speaking recently at a China Photovoltaic Industry Association (CPIA) event, he added that despite near-term challenges, the long-term fundamentals for solar PV remain robust, especially since it is the lowest-cost solution to meet incremental electricity demand.  

As a fuel-free technology, solar is insulated from fuel price volatility and geopolitical risks, he added, thus increasing its desirability. 

Additionally, growing storage integration, and demand from emerging markets continue to underpin its growth. More than 23% of large utility-scale solar projects globally now include energy storage, according to BloombergNEF’s project database. New storage technologies are improving grid integration, flexibility, and system resilience. Solar also offers shorter development and delivery timelines which is required in regions like Lebanon, Ukraine and Iraq that require disruption-resistant power supply.

Solar growth expands beyond traditional markets

Among strong markets to watch out for is India that remains a major growth engine. Supported by strong policy backing and rising power demand, India is expected to add about 35 GW AC of solar capacity in 2025 and 37 GW AC in 2026, equivalent to around 47 GW of module demand, forecast Tan. High growth is expected through 2035, though policy uncertainty could create volatility.

Beyond India, Southeast Asian countries including Indonesia and Vietnam, are expanding solar as part of energy transition and security plans. Solar installations across the Middle East, North Africa, and Sub-Saharan Africa are expected to reach 27 GW in 2025 and 30 GW in 2026, as per BloombergNEF’s estimates. In the absence of grid connection statistics, the growing volume of Chinese module exports to these regions can be seen as a sign of their interest in solar, he added.