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Top Five Nations in Solar Energy Generation

Solar panels gleaming golden in the sunset
Credit: Milos Muller / Getty Images

The global energy mix has been dominated by fossil fuels for centuries. Due to the rising energy demand by nations worldwide, the use of fossil fuels has led to enormous damage to the human and environmental health, which has translated into huge economic costs.

In the recent decade, the rising awareness and intent to reduce greenhouse gas (GHG) emissions have paved the way for alternatives, with solar energy being one of them. While the sunlight that hits the Earth's surface in one-and-a-half hours is enough to power the entire world's electricity consumption for a year, this source of renewable energy has largely been untapped. With commitments towards cutting carbon emissions, the world is witnessing a shift in the energy mix away from fossils towards renewables. The worldwide solar photovoltaic (PV) installed capacity at the end of 2022 stood at 1,046.61 GW up as compared to 136.57 GW at the end of 2013.

Here's an overview of the top five nations leading in deployment of solar energy based on statistics by International Renewable Energy Agency (IRENA).

1. China

China continues to dominate the solar industry in terms of solar PV installed capacity. The country added 87.4 gigawatts (GW) during 2022, taking its cumulative installed capacity to 392.43 GW thereby dominating 37.5% of the global market. The capacity addition made in 2022 fell slightly short of its target of 108 GW for 2022 amid lingering lockdown restrictions. China’s solar PV capacity was 17.74 GW back in 2013.

China remained the largest single-country contributor to global GHG emissions, with an overall share of 27% of global emissions. Hence, China’s transition to a low-carbon economy is imperative for achieving global climate goals. The country emerged as the clear leader in low-carbon spending in 2022 accounting for almost half of global investment and pumping almost $550 billion into energy transition technologies, according to the BloombergNEF report. Back in September 2020, United Nations General Assembly president Xi Jinping said, “We aim to have CO2 emissions peak before 2030 and achieve carbon neutrality before 2060.” The 14th Five-Year Plan for Renewable Energy, released in 2022, provides ambitious targets for deployment, which should drive further capacity growth in the coming years. 

2. U.S.

The U.S. ranks second globally in terms of cumulative PV installed capacity. The installation of 17 GW of PV in 2022 pushed its cumulative PV installations to 110.1 GW. Last year, PV represented approximately 46% of new the U.S. electric generation capacity, compared to 4% in 2010. The cumulative number stood at 11.03 GW back in 2013. Wood Mackenzie expects “the solar market to triple in size over the next five years, bringing total installed solar capacity to 378 GW by 2028.”

The U.S. is the second-highest GHG emitter, responsible for 11% of the global emissions. The Biden-Harris Administration aims for a 100% clean electricity grid by 2035 and net-zero carbon emissions by 2050. Multiple measures have been taken to achieve the set target. The U.S. introduced the Inflation Reduction Act in 2022, “combining the objectives of reducing domestic inflation-notably brought by the global energy crisis- whilst tackling climate change.” In January 2023, to strengthen America’s clean energy grid, the Biden-Harris Administration announced a $82 million investment aimed at increasing domestic solar manufacturing and recycling. The administration announced an additional $45 million for its domestic solar manufacturing sector in July 2023.

3. Japan

Japan ranks third globally with a total installed PV capacity of 78.83 GW. This figure stood at 13.59 GW back in 2013. In October 2020, Prime Minister Suga Yoshihide announced Japan’s resolve to reduce GHG emissions to zero, to make Japan a carbon-neutral, decarbonized society by 2050. At the leaders’ summit on climate in the U.S. in April 2021, Japan committed to a 46% cut in GHG emissions from 2013 levels by 2030. To cut household carbon emissions, a regulation has been passed in December 2022 as per which all new houses in Tokyo built by large-scale homebuilders after April 2025 must install solar power panels. Japan emits 2% to global GHG emissions.

Japan has been working on advancements in solar technology, which include space-based solar power (SBSP) and next-generation flexible solar cells. The SBSP project involves the space launch of satellites equipped with giant solar panels which convert the generated electricity into microwaves that are then transmitted back to the ground. Japan has set a goal of conducting a space-to-ground power transmission experiment by fiscal 2025. To test flexible solar cells, Japan has plans of a demonstration test in April 2024 by installing perovskite solar cells (PSCs). 

4. Germany

Germany, the largest economy in Europe, ranks fourth in terms of installed solar capacity. At the end of 2023, Germany’s cumulative PV installed capacity stood at 66.55 GW—up from 59.37 GW at the end of 2022. The country’s cumulative capacity stood at 36.7 GW in 2013. Amid the backdrop of the war between Russia and Ukraine, Germany aims to speed up wind and solar energy projects to reduce its external dependence for energy. Germany's government passed several laws to encourage using renewable energy sources. The country’s solar energy market size is expected to reach 137.88 GW by 2028, at a CAGR of 12.80% during 2023-28.

At the core of Germany’s energy policies and politics is “Energiewende,” a term which means “energy transition.” It represents the journey of Germany’s energy transition from a clear dominance of coal, oil and nuclear to a low-carbon and nuclear-free economy based on the utilization of renewable sources. Germany has set an ambitious target to fulfil all its electricity needs with supplies from renewable sources by 2035, compared to its previous target to abandon fossil fuels and reach carbon neutrality by 2045. Germany is targeting a 30% share of renewables in final consumption by 2030.

5. India

India is endowed with vast solar energy potential. About 5,000 trillion kWh per year energy is incident over India's land area. Globally, India stands fifth in solar power with a cumulative PV installed capacity of 62.80 GW at the end of 2022, up from 49.34 GW in 2021. India’s total PV installed capacity stood at 14.46 GW in 2013. The Indian government has recently declared its plan to add 50 GW of renewable energy capacity (which includes solar, wind, hydro and bio) annually for the next 5 years to achieve the target of 500 GW by 2030. India currently has a total renewable energy capacity of 168.96 GW.

India's solar market is estimated to be at 79.07 GW by the end of 2023 and is projected to reach 195.11 GW after five years, registering a CAGR of 19.8% during the forecast period. As per the updated Nationally Determined Contribution under Paris Agreement, India stands committed to reduce a) emissions intensity of its GDP by 45% by 2030, from 2005 level, and b) achieve about 50% cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030. The nation’s existing NDC is a step forward towards the country’s “long-term goal of reaching net-zero by 2070.” India ranks third in terms of highest global GHG emitters at 7% along with the European Union.

Next Five

Australia (26.7 GW), Italy (25 GW), Brazil (24 GW), Holland (22.5 GW) and South Korea (20.9 GW) complete the list of top ten nations in terms of cumulative installed solar capacity.

International Energy Agency estimates that “China, the United States and India all double their renewable capacity expansion in the next five years, accounting for two-thirds of global growth.”

Disclaimer: The author has no position in any stocks mentioned. Investors should consider the above information not as a de facto recommendation, but as an idea for further consideration. The report has been carefully prepared, and any exclusions or errors in it are totally unintentional. The ranking is based on the data input from IRENA report. The report has been based on insights from International Energy Agency (IEA), U.S. EIA, and Solar Energy Industries Association (SEIA). 

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Prableen Bajpai

Prableen Bajpai is the founder of FinFix Research and Analytics which is an all women financial research and wealth management firm. She holds a bachelor (honours) and master’s degree in economics with a major in econometrics and macroeconomics. Prableen is a Chartered Financial Analyst (CFA, ICFAI) and a CFP®.

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