IEA report: 2.2TW cumulatively, Pakistan's Chinese module "buying spree", power abandonment phenomenon

By 2024, the world’s cumulative installed solar capacity will reach 2.2TW, with China alone accounting for 1TW of the total operational capacity.

This is the main conclusion of the latest report released this week by the International Energy Agency Photovoltaic Systems Program (IEA-PVPS). The report analyzes global installed capacity and technology trends over the past 12 months and highlights the rapid growth of PV installed capacity in global markets.

For example, although China’s 357.3GW of new installed capacity is significantly higher than any other country, 34 countries around the world will add at least 1GW of new PV installed capacity in 2024. In fact, the world’s new installed capacity in 2024 is 602GW, an increase from 56GW in 2023 and more than double the 242GW added in 2022. The figure below shows the new capacity added in some major markets.

Despite the continuous growth of installed capacity in the United States and India, the European Union has been the second largest market for annual new installations in the world for the past five years. India adds 31.9GW of new capacity in 2024, almost double the amount added in 2023, reflecting record installations in the country, backed by large tenders for 73GW of new large-scale ground-mounted solar energy system power generation capacity.

China, the European Union, the United States and India are the top four markets for both new and cumulative installations in 2024. Both lists (including the top ten markets as well as the European Union) contain nine of the same markets, but one notable exception is Pakistan, which does not make the top ten in cumulative installations but adds a record 17GW of new capacity in 2024, ranking fifth behind the four major markets.

Most of Pakistan's growth comes from the rooftop solar sector. Earlier this year, Waqas Moosa, chairman of the Pakistan Solar Energy Association (PSA), said that soaring energy prices have encouraged people to reduce their reliance on the central grid and they have turned to rooftop solar as a way to generate their own electricity. Data from Bloomberg New Energy Finance shows that Pakistan's demand for grid electricity fell 9.1% year-on-year in 2023.

Pakistan’s ‘buying spree’ for Chinese modules

Moosa also described a ‘buying spree’ for Chinese solar panels in Pakistan in the first half of 2024, which appears to have continued until the end of the year. According to the China Chamber of Commerce, Pakistan imported 24GW of Chinese modules between 2023 and 2024, with 17GW imported in 2024 alone.

This emphasis on imports means that Pakistan is a unique market among the leading countries in new installations in that it has not made major investments in domestic manufacturing capacity.

China, the United States and India have made significant progress in increasing their cell and module manufacturing capabilities, and while Moosa said Pakistan could focus on manufacturing specialized products, such as modules for the distributed sector, it still lags far behind many other markets in terms of pure manufacturing capabilities.

“The Pakistani market this year is the result of a combination of factors, including rising electricity prices, low-cost imports and a rapidly expanding network of module importers and distributors – with large imports in 2023 suggesting a vibrant 2024,” the authors of the International Energy Agency’s Photovoltaic Systems Programme (IEA-PVPS) wrote in their report, suggesting that the rapid growth of Pakistan’s solar sector has put pressure on energy infrastructure.

“With an estimated new capacity of more than 17GW, there are real concerns about the ability of the local grid to remain stable and the viability of the entire power system given the high costs of conventional capacity.”

With more solar power comes curtailment

The IEA-PVPS report said that the global average solar penetration rate – the proportion of a country’s energy needs met by the theoretical maximum power generation of its operating solar projects – exceeded 10% for the first time.

The report noted that 27 countries now have a projected penetration rate of more than 10%, up from 18 in 2023, including many leading PV markets including the EU and China.

These figures reflect the role of solar in the overall national energy mix, not just the growth of the solar sector. For example, while India’s solar capacity continues to grow, its solar penetration is not always rising because India is still investing in new fossil fuel power plants, with the country adding 4GW of coal capacity in 2024 – reducing the share of solar in the country’s power mix. These trends are reflected in the chart below, where the black line represents the global average.

The report also notes that as solar power grows as a share of total installed capacity, curtailment, or the limiting of electricity generation, “has become a real problem”. The report says that when curtailment is taken into account, solar penetration is actually “lower than indicated”. For example, Chile’s theoretical PV penetration is 3.3% lower in 2024 due to the curtailment of 6TWh of renewable electricity.

While Chile has become the poster child for major grid challenges and curtailment, it has also helped to drive discussion about the role of energy storage in the global energy mix, especially in the PV sector. This year, both Europe and the US have highlighted the need for stronger grid infrastructure, either through grid expansion and modernization or through the use of energy storage systems, which was also reflected in the report of the International Energy Agency’s Photovoltaic Power System Technical Cooperation Program.

“For those countries with the highest penetration, curtailment is becoming more common, and future investments in grid drag reduction, interconnection, as well as flexibility, storage and cross-sector coupling are needed to fully utilize peak capacity,” the report’s authors wrote.