Solar set to become the largest electricity source within 6 years, but new capacity will fall this year for the first time

According to projections by BloombergNEF (BNEF) researchers, solar power plants could overtake coal-fired power plants as the world's largest source of electricity by 2032. This is despite the fact that newly commissioned capacity from these sources is likely to decline this year for the first time ever, due to a drop in new installations in China. 

Newly commissioned solar capacity has grown steadily over the past two decades. It stood at roughly 70 GW in 2016, rising to more than 650 GW last year. This year, however, BNEF researchers expect the first year-on-year decline, of just under 2 % to 640 GW.

The main reason for the decline is a drop in new installations in China, which is expected to add 310 GW of new capacity this year. Despite this decrease, China will continue to dominate the global market, as second-placed India and the United States are each expected to add roughly 50 GW. Among European countries, Germany with 17 GW, Spain with 10 GW and Italy with 9 GW are expected to lead solar power development.

Despite the above slowdown in new capacity growth, the role of solar power plants is set to continue strengthening in the coming years, becoming the world's largest source of electricity from 2032. This assumes that the share of electricity generated by coal- and gas-fired power plants in total global electricity generation will gradually decline, while the shares of wind and solar power plants will grow at a relatively rapid pace.

"Solar power plants and batteries will transform global electricity markets over the next 10 years," said Jenny Chase of BNEF, who also warned of trade barriers that may slow their growth in markets where they are being deployed.