In 2023, the global photovoltaic market is set to experience significant growth, with new grid-connected installed capacity projected to increase by over 80% year-on-year, reaching a total of 417 GWdc. This growth is being driven by ultra-low module prices which have accelerated the construction progress of photovoltaic projects, particularly in the European and Chinese markets. China, in particular, remains the largest market for photovoltaics, accounting for 60% of the global total installed capacity last year. The push towards decarbonization by both governments and corporations is a key driver behind the explosive growth of photovoltaic installations across different regions.

As government tender projects typically have strict requirements for grid connection deadlines and with a growing power demand, it is expected that markets such as Malaysia, Taiwan, Saudi Arabia, and Iran will see double-digit growth in the near future. Furthermore, the hedging needs of energy-intensive industries against fluctuations in electricity prices are fueling the development boom in the European industrial and commercial photovoltaic market. This trend is also supported by the increasing number of off-site and on-site power purchase agreements (PPA) being signed.

While the Chinese market has been a major contributor to the global photovoltaic market growth, its pace is expected to slow down slightly, leading to a steadier overall increase in the global market. By 2024, the global photovoltaic installed capacity is projected to reach at least 430 GWdc, representing a 3% increase from the previous year. Despite the strong growth in recent years, experts anticipate that the global photovoltaic market will maintain a relatively flat average annual growth rate over the next decade, with the growth prospects being significantly impacted by developments in the Chinese market.

Looking ahead, there are conflicting predictions regarding China's photovoltaic installed capacity in the coming years. While some forecasts suggest slight growth in 2024 and 2025, others anticipate a decline in 2026. Factors such as local energy policies entering an adjustment stage during the transition between Five-Year Plans and the completion of existing wind and solar power projects are expected to influence this trajectory. Nevertheless, long-term prospects for China's photovoltaic market remain positive, with estimates indicating potential for significant growth in the next decade based on production capacity expansions and grid connectivity.

Despite the optimistic outlook for China, challenges in the global photovoltaic market persist. Insufficient grid infrastructure, weak demand, and protectionist policies remain key factors limiting the market's development. The need for robust transmission and distribution grid facilities is highlighted, particularly in Europe where the rapid growth of photovoltaic installed capacity is outpacing the expansion of power grid facilities. Investments in grid expansion and upgrades are crucial for achieving decarbonization goals and sustaining renewable energy projects in Europe and other regions, but delays in infrastructure improvement plans pose obstacles to the sector's growth.

The regulatory landscape surrounding photovoltaic products is also evolving. Recent initiatives by the European Commission and Canada aimed at promoting localization of supply chains for renewables and ensuring transparency in sourcing may impact international trade dynamics in the near future. Additionally, concerns over protectionist measures and trade defense actions cast uncertainty on the competitiveness of the photovoltaic economy in various markets. While efforts to strengthen supply chain transparency and localization may enhance sustainability, they could also lead to disruptions in the global photovoltaic supply chain.

The challenges of grid expansion and upgrades are not unique to Europe. In regions such as South America, the lack of transmission infrastructure poses a significant barrier to the growth of photovoltaics in the near and medium term. Slowing power demand growth, coupled with delays in electrification initiatives, further complicate long-term forecasts for the PV market, especially in Europe. The need for coordinated efforts to address grid limitations and drive technological advancements is essential for unlocking the full potential of photovoltaics and achieving sustainable energy transitions at a global scale.