Solar smashed records in 2025 — but a first-ever global decline is coming in 2026

The global solar industry had a year of extremes in 2025: record-breaking installations, China's continued dominance, a historic shift in the global electricity mix — and the first signs of a coming slowdown that could make 2026 the first year of annual decline in the modern solar era.

Based on SolarPower Europe's Global Solar Market Outlook 2026-2030 (published June 22, 2026) and supporting data from IRENA, IEA, Ember, and BloombergNEF, here are the key milestones and what the pause means.

Record installations: 664 GW in 2025

The world installed a record 664 GW of new solar PV capacity in 2025, pushing cumulative global solar capacity past 3 TW for the first time . This was the strongest year ever for solar deployment, though annual growth slowed to 12% compared to the exceptional 60-80% rates of prior years .

Installation figures vary across major sources depending on methodology and timing:

• SolarPower Europe: 664 GW
• Ember: 647 GW
• IRENA: 511 GW (operational grid-connected capacity)
• IEA: 605 GW

The variation mainly reflects differences in how "installed" is defined (shipped vs. grid-connected vs. operational). SolarPower Europe's figure is the most recently released and uses a broader definition that includes systems not yet grid-connected.

Record solar electricity generation

Solar PV generated a record 600 TWh of additional electricity in 2025 — the largest-ever annual generation increase by any single energy source in one year, outside of periods of post-crisis recovery . The IEA notes this absolute increase of solar PV generation in 2025 is the largest ever observed for any source, excluding coal's post-pandemic rebound in 2021 . SolarPower Europe estimates this generation was equivalent to roughly five years of LNG flows through the Strait of Hormuz .

Total solar electricity generation reached approximately 2,800 TWh, covering around 9% of global electricity demand .

China's role: 62% of global additions

China alone accounted for 62% of global solar capacity additions in 2025, continuing its dominant position . The country added roughly 314-378 GW depending on the source, with Ember reporting 378 GW and the Renewable Energy Institute reporting 314 GW . China's domestic market was the primary driver of the global installation record, with its massive manufacturing capacity also supplying panels to the rest of the world at record-low prices.

Most of China's additions came in the first half of 2025: 237 GW in the first five months, including a record 111 GW in May alone, driven by a pricing reform for grid-connected projects .

Shift in the global electricity mix

Beyond the raw installation numbers, 2025 saw several structural shifts in how the world generates and consumes electricity:

• Renewables hit a record 692 GW of new capacity added globally in 2025, of which solar was the majority contributor .
• Solar met 75% of all global electricity demand growth in 2025 .
• Renewables accounted for 33.8% of global electricity generation, surpassing one-third for the first time .
• Solar and wind combined added a record 814 GW of new capacity in 2025 .
• For the first time, more than 8 out of every 10 new megawatts of new power capacity installed globally were from renewable sources .
• Solar PV remained the backbone of global renewable energy expansion, accounting for 77% of all renewable capacity additions in 2025 .

The EU experience: first annual decline since 2016

In the European Union, 2025 installations reached 65.1 GW, a 0.7% contraction compared to 65.6 GW in 2024 — the first year-on-year decline since 2016 . Despite the decline, the EU reached its 2025 solar installation target of 400 GW, with a total fleet of 406 GW .

SolarPower Europe's EU report noted that the EU market is expected to see two more years of decline before returning to 2025 levels only by the end of the decade . The association projects a 6% year-on-year drop in 2026 . Germany, the EU's largest solar market, saw PV expansion fall by 6% in Q1 2026, with residential and commercial segments declining by 21% and 33% respectively .

Projected first annual global decline in 2026

The most notable forecast for the year ahead is a temporary contraction. SolarPower Europe's Global Solar Market Outlook forecasts a temporary decline in global solar installations in 2026, before growth resumes in 2027 . Under SolarPower Europe's Medium Scenario, global installations could fall by 8% to around 612 GW .

BloombergNEF forecasts 649 GW of additions in 2026, a 0.9% decline from 2025 — which would mark the first annual contraction in modern solar industry history . S&P Global similarly flagged 2026 as the likely year for the first annual slowdown in renewables additions, noting a projected sharp decline in China's additions from approximately 300 GW in 2025 to about 200 GW in 2026 — a drop so steep that no other region can compensate .

The report characterizes this as a near-term pause driven by market saturation in key regions (especially China and the EU), policy uncertainty, and grid integration bottlenecks, rather than a structural downturn . SolarPower Europe expects growth to resume in 2027, with BloombergNEF forecasting 688 GW in 2027 and 743 GW by 2028 .

Key caveat: Installation figures vary meaningfully across sources (511-664 GW for 2025) depending on methodology. The consistent narrative across all major sources is that 2025 was a record year but with slowing growth, and a modest global decline is projected for 2026.