The Global Solar Boom: How Solar Became the Cheapest Energy Source

Solar Energy's Unstoppable Rise

In 2025, the world installed a record 593 GW of new solar photovoltaic capacity — more than all other electricity generation technologies combined. Global cumulative solar capacity now exceeds 2.2 TW, a figure that seemed unimaginable just a decade ago when total capacity was under 250 GW. Solar has become the fastest-growing energy source in human history, and the pace is accelerating.

The story of solar is, at its core, a story about costs. No other energy technology has experienced such a dramatic and sustained cost decline, fundamentally reshaping the economics of electricity generation worldwide.

The Cost Revolution

The levelized cost of energy (LCOE) for utility-scale solar PV has fallen by approximately 90% since 2010:

| Year | Solar PV LCOE ($/MWh) | Decline from 2010 | |------|----------------------|-------------------| | 2010 | $359 | — | | 2015 | $118 | –67% | | 2020 | $57 | –84% | | 2023 | $44 | –88% | | 2025 | $33 | –91% |

At $33/MWh on a global weighted average, utility-scale solar PV is now cheaper than new coal ($65–150/MWh), new natural gas ($45–75/MWh), and even existing coal plants in many markets. IRENA and BloombergNEF data confirm that solar is the cheapest source of new electricity in countries representing over 90% of global power generation.

This cost decline has been driven by manufacturing scale, silicon wafer efficiency improvements (commercial modules now average 22–24% efficiency, up from 15% in 2010), and fierce competition among manufacturers.

Global Capacity Leaders

Solar deployment is concentrated in a handful of major markets, though adoption is broadening rapidly:

China dominates global solar capacity with over 900 GW installed — roughly 40% of the global total. China installed approximately 280 GW of new solar in 2025 alone, driven by provincial-level mandates and ultra-low module prices from domestic manufacturers. The country's solar module production capacity now exceeds 1,000 GW annually, creating a global oversupply that has pushed module prices below $0.10/W.

The United States has approximately 250 GW of installed solar capacity, accelerated by the Inflation Reduction Act's investment and production tax credits. Utility-scale solar now accounts for the majority of new US power generation capacity additions, and the Solar Energy Industries Association projects 500 GW of cumulative US solar capacity by 2030.

India has rapidly scaled to over 120 GW of solar capacity, driven by the National Solar Mission and competitive auctions that have delivered some of the world's lowest solar tariffs — as low as $0.024/kWh in recent rounds. India aims for 500 GW of renewable energy capacity by 2030, with solar as the primary contributor.

The European Union collectively hosts approximately 350 GW of solar capacity. Germany leads within Europe at roughly 100 GW, followed by Spain, Italy, and the Netherlands. The EU Solar Energy Strategy targets 750 GW of solar capacity by 2030.

Utility-Scale vs. Rooftop Solar

The solar market is split between large-scale utility installations and distributed rooftop systems, each with distinct dynamics:

• Utility-scale solar accounts for roughly 70% of global new installations by capacity. These projects benefit from economies of scale, with costs as low as $0.02–0.03/kWh in competitive auctions in the Middle East, Chile, and India. Projects in Saudi Arabia and the UAE have achieved record-low bids below $0.015/kWh.
• Rooftop and distributed solar serves residential and commercial consumers, often coupled with net metering or feed-in tariffs. While costs per watt are higher ($0.05–0.12/kWh typical), rooftop solar avoids transmission costs and provides grid resilience. Germany, Australia, and Japan lead in per-capita rooftop solar adoption.

The balance between the two is shifting as battery storage costs decline, making rooftop-plus-storage systems increasingly attractive for energy independence and demand charge management.

Storage Integration: Solving the Intermittency Challenge

Solar's greatest limitation — its intermittent nature — is being addressed through the rapid integration of battery energy storage systems (BESS). In 2025, approximately 40% of new utility-scale solar projects in the US were co-located with battery storage, up from just 10% in 2020.

Lithium-ion battery pack prices have fallen to approximately $115/kWh, and are projected to reach $80/kWh by 2028. This makes solar-plus-storage competitive with natural gas peaker plants in most markets.

Key storage-solar milestones include:

• California's grid-scale battery fleet now exceeds 12 GW, primarily paired with solar
• Australia's Waratah Super Battery and other large-scale projects are demonstrating 4-hour+ storage economics
• China is mandating storage co-location for new solar projects in many provinces

Manufacturing and Supply Chain

The solar manufacturing supply chain is overwhelmingly concentrated in China, which produces approximately 80% of the world's polysilicon, 95% of solar wafers, 85% of solar cells, and 75% of finished modules. This concentration has created trade tensions, with the US, EU, and India implementing tariffs and domestic manufacturing incentives to diversify supply chains.

The US CHIPS-and-Science-style approach to solar manufacturing — combining IRA tax credits with Defense Production Act authorities — has attracted over $20 billion in announced US solar manufacturing investments. India's Production Linked Incentive (PLI) scheme is similarly building domestic capacity.

Despite these diversification efforts, Chinese manufacturers' cost advantages remain substantial, keeping global module prices at historic lows and accelerating deployment worldwide.

What the energtx Data Shows

Our solar capacity indicators across 56 countries reveal the dramatic acceleration of solar deployment since 2015. When correlated with electricity pricing data and CO2 emissions, the pattern is clear: countries with aggressive solar deployment are seeing lower wholesale electricity prices and declining power sector emissions.

Explore solar capacity trends by country on our datasets page and compare year-over-year growth across regions.

Solar energy has moved from the margins to the mainstream. The question is no longer whether solar will dominate future electricity generation, but how quickly the rest of the energy system can adapt to its abundance.