Global Solar on Fast Track With Southeast Asia Tipped for Exponential Growth

In 2022, the world installed 239 GW of new solar, 45% more solar power capacity than the year before. The positive market developments in the first months of 2023 promise another solar boom year, expected to result in 341 GW of newly-added solar to the grid, by the end of the year, equal to 43% growth, according to the latest global market outlook from industry group SolarPower Europe.

This solar rush comes after more modest progress in preceding years, which were characterised by pandemic-triggered lockdowns, supply chain turbulence, and high product prices along the value chain. However, even in trickier times, the solar industry demonstrated very strong resilience, with newly installed global capacities increasing by 19% in 2020 and 18% in 2021.

SolarPower Europe says the reasons for this impressive performance are obvious saying it comes down to the unmatched versatility of solar, powering individual energy self-sufficiency and comparatively quick-deploying utility-scale projects at competitive low cost.

China the World Leader

Despite solar’s levelised cost of electricity (LCOE) sliding upwards – for the first time – due to supply chain issues and inflation, it remains cheaper to produce electricity from solar than from new fossil fuel and nuclear power sources.

Record installations in 2022 were driven by a robust performance in China, the undisputed world-leading solar market, with almost 100 GW added in a single year and a huge 72% annual growth rate.

The US meanwhile experienced a turbulent year in 2022, but kept its spot as the second largest market despite a 6% annual decrease to 21.9 GW, while India’s rebound continued in 2022, with 17.4 GW of new installed capacity and a 23% growth.

Closing the 2022 top 5 countries, Brazil doubled its installation rate with 10.9 GW, while Spain became the largest European market with 8.4 GW.

At the regional level, China’s dominance increased the Asia-Pacific share to 60%, while Europe remained stable at 19% and the Americas declined to 17%. In terms of installed solar capacity per capita, Australia remains in the lead with almost 1.2 kW/capita, while the Netherlands also crossed the kW/capita threshold, compared to a global average of an estimated 144 W/capita.

Solar power now also enjoys widespread acceptance as the key tool to achieve local energy security in the midterm.

Solar Will Flourish in Southeast Asia

During the recent fossil fuel-sparked energy crisis, the International Energy Agency (IEA) used two reports to highlight solar’s critical role to reduce the European Union’s dependence on Russian gas. The EU Solar Strategy of May 2022 even called solar the ‘kingpin’ of the continent’s effort to get off Russian gas.

With global supply chain issues largely overcome, and gigantic PV production capacities being built up, prices have dropped significantly across the value chain in recent months and are expected to dip below pre-pandemic levels soon.

SolarPower Europe foresees 402 GW of new solar this year and close to 800 GW in 2027. Having achieved over 1 TW of total solar capacity in 2022, the report says there is now the potential for an annual TW-scale market by 2030.

Southeast Asia has also experienced exponential PV capacity expansion in the last years, driven by its largest markets Vietnam, Thailand, Malaysia, Philippines, and Indonesia.

Together, these countries host 95% of the region’s operating PV capacity. Most of these countries have surpassed 1 GW of installed PV capacity, whereas other markets in the region like Cambodia, Laos, Myanmar and Singapore are expected to reach that level by no later than 2027.

While the 3.4GW of solar installations last year were less than the 4.2GW in 2021, or a record 13.1GW in 2020, the report says the Southeast Asian solar increase is just beginning.

And given the growing power demand, bolstered by accommodating government policies, the report projects that more than 20GW solar installations per year could be installed in Southeast Asia by 2027.