A recent report from Wood Mackenzie sheds light on the trajectory of the global solar market in 2025, with opportunities and challenges. The industry is expected to add 493 GW of DC solar capacity globally in 2025, down from the 495 GW forecasted for 2024, according to the report. According to the report, this was a result of shifting market dynamics, policy changes, and technological advances that continue to shape the sector.

Price of Solar Modules and Market Dynamics

The prices for solar modules will probably start increasing in 2025 to enable manufacturers to make some recoveries after suffering losses during the past two years. In other terms, prices must be stabilized based on unstable balance demand with varying production costs.

According to the report, solar installations might go slow because:

• There are uncertainties about elections.
• There will be less and fewer incentives toward the use of solar panels.
• Power sectors have been remodeled through reforms.
• Less ambitious on world climate agenda.

Expanding Manufacturing Capacity

China will continue to be the focal point of solar manufacturing and retain its hold on the supply chain. However, other regions are stepping up their effort to increase their solar production capacity. India, the United States, and the Middle East collectively plan to add over 100 GW of solar manufacturing capacity by 2025. This is an effort to diversify the supply chain and make it less dependent on a single region.

Rising Demand from Data Centers

Artificial intelligence is bringing a sea change in the energy requirements of data centers and their dependence on solar energy. Being one of the most power-intensive industries, data centers will soon emerge as one of the main contributors in the growth of solar energy. This will be a trendsetter in the development and location of future solar projects, with the industry continuing to adapt to meet the energy needs of AI-powered infrastructure.

Technological Innovations in Solar Equipment

The solar sector is facing a technological change, with developments aimed at enhancing efficiency and trying to overcome labor challenges. Key developments include:

• High-Voltage Inverter Architectures: Voltage ratings are going to rise up to 2,000 volts DC, optimizing system performance and costs.
• AI-Powered Smart Trackers: Such systems will boost energy capture through dynamic adjustments of solar panels according to environmental conditions.
• Robotics in Construction and Maintenance: The use of robots is foreseen to increase, thus mitigating the effects of increased labor costs and shortages, while it can also ensure that the installation and maintenance of solar infrastructures are very accurate.

Outlook

The sluggish growth in the solar industry points to a need for adaptive strategies, considering the ‘multi-dimensional’ economic, political, and technological factors shaping its prospects. Yet, even today, with continuous innovation and drives for manufacturing expansion, opportunities appear for the sector to become more resilient and sustainable. Solar will continue to play a leading role in energy transitions worldwide, while seizing the new opportunities and meeting the new challenges will call for collaboration across regions and industries.