Global renewable power is entering an unprecedented growth phase, with total capacity projected to more than double by 2030, according to the International Energy Agency’s (IEA) latest Renewables 2025 report. Despite regulatory shifts, supply chain hurdles, and cost pressures, the IEA forecasts a surge of nearly 4,600 gigawatts (GW) in new renewable capacity over the next five years — roughly equal to the combined power generation of China, the European Union, and Japan.
The IEA’s findings underscore a dramatic transformation of the global energy landscape, driven largely by rapid declines in technology costs and policy support from governments targeting carbon neutrality.
Solar Power Dominates the Next Wave of Growth
The report identifies solar photovoltaic (PV) technology as the driving force behind the expansion, accounting for around 80 percent of total new capacity additions. The appeal of solar PV lies in its falling production costs, faster permitting processes, and its adaptability across regions — from rooftop systems in urban markets to utility-scale farms in developing economies.
“Solar PV is on course to account for some 80 percent of the increase in the world’s renewable capacity over the next five years,” said Fatih Birol, Executive Director of the IEA. “In addition to growth in established markets, solar is set to surge in economies such as Saudi Arabia, Pakistan, and several Southeast Asian countries.”
Wind, hydropower, bioenergy, and geothermal energy will also see meaningful expansion, though at a slower pace. Offshore wind, in particular, faces a weaker near-term outlook — with growth forecasts down about 25 percent from last year — due to rising costs, policy uncertainty, and supply chain bottlenecks in key markets such as the US and the UK.
Emerging Economies Take the Lead
Emerging markets in Asia, the Middle East, and Africa are expected to drive much of the global increase, supported by declining technology costs and increasingly ambitious policy frameworks. Countries such as India are emerging as major players, with the IEA predicting it will become the second-largest renewable energy market after China by 2030.
In Africa and the Middle East, auction-based procurement schemes and government-backed clean energy targets are accelerating project deployment. Geothermal installations are set to reach record highs in Indonesia, Japan, and the United States, while pumped-storage hydropower is expected to grow nearly 80 percent faster than in the past five years as nations seek grid stability solutions.
Optimism Tempered by Policy and Supply Chain Risks
While the overall outlook remains strong, the IEA’s updated forecast represents a slight downward revision from last year’s report. Much of this adjustment stems from regulatory changes in the United States and China — the world’s two largest energy markets.
In the US, the early phase-out of federal tax incentives and new permitting constraints have lowered growth expectations by nearly 50 percent. In China, the shift away from fixed feed-in tariffs to competitive auction mechanisms has also affected project economics, delaying several large-scale developments.
Nonetheless, these dips are partly offset by strong upward revisions in India, Europe, and other emerging economies, where new policy packages, faster permitting, and expanded auction volumes are accelerating renewable deployment.
Corporate power purchase agreements (PPAs), utility contracts, and merchant solar plants are now expected to contribute 30 percent of global renewable capacity additions by 2030 — double their share from last year’s forecast.
Concentration of Supply Chains Raises Concerns
Despite rapid diversification efforts, global supply chains for solar panels and rare earth materials remain heavily concentrated in China. The IEA warns that China’s dominance — controlling over 90 percent of production capacity in key segments — presents a strategic vulnerability for the clean energy transition.
“Policymakers must prioritize supply chain security and grid integration as renewables take a deeper share of the global power mix,” Birol emphasized. Without sufficient diversification, the world risks facing new forms of dependency even as it transitions away from fossil fuels.
Mounting Pressure on Power Grids
The rise of variable renewable energy sources such as solar and wind is also placing increasing strain on electricity grids. Many countries are already experiencing curtailment issues and negative price events, underscoring the need for expanded grid capacity, energy storage, and flexible backup generation.
Several governments have launched new grid and storage auctions to address these challenges, but the IEA warns that significantly more investment will be needed to ensure reliable and cost-efficient integration of renewables at scale.
Beyond Power: Renewables in Transport and Heating
The shift to renewables is also extending — albeit slowly — into the transport and heating sectors. The IEA expects renewables’ share in transport energy use to increase from 4 percent today to 6 percent by 2030, driven by electric vehicle adoption and biofuel growth in markets such as Brazil, Indonesia, and India.
For heating and industrial energy use, renewables’ share is forecast to rise from 14 percent to 18 percent by 2030, as nations invest in clean heat pumps, district heating, and bioenergy systems.
A Transformational Decade Ahead
Despite geopolitical tensions, inflationary pressures, and supply chain risks, the IEA remains confident that renewable energy is on track to become the backbone of global electricity generation within the decade.
If current trends continue, renewable sources will meet nearly half of global electricity demand growth through 2030, putting the world significantly closer to the Paris Agreement’s decarbonization goals.
“The next five years will determine whether the energy transition succeeds,” Birol said. “Renewables are not just growing fast — they’re reshaping the entire global energy system.”
