Solar will remain the leading source of global renewable energy capacity expansion by 2023, accounting for 286 GW, the International Energy Agency (IEA) said in a new report. This figure will grow to almost 310 GW by 2024 due to falling module prices, increased adoption of distributed PV systems, and policy push for large-scale power station deployment. The International Energy Agency (IEA) has released an updated market report on the renewable energy market outlook for 2023 and 2024.

Globally, new renewable energy capacity will soar from 107 GW to more than 440 GW by 2023, the largest absolute increase on record, the report said. Solar will remain the main source of global renewable energy capacity expansion by 2023, accounting for 65% of new capacity additions, reaching 286 GW, with distributed generation applications accounting for nearly half of new capacity additions.

"Lower module prices, greater use of distributed PV systems, and government policy push for large-scale PV system deployment will trigger higher demand in all major markets, including China, the EU, the US and India," the IEA said. Annual increments.” However, Brazil’s new capacity additions are likely to decrease in 2023-2024 due to Law No. 14.300, which came into effect in early 2022, changing the rate of return in the distributed generation market. Compared with its December 2021 forecast, the agency raised its forecast for renewable energy capacity additions in 2023 and 2024 by 38%.

"In the EU, residential and commercial solar PV systems account for 74% of our projected growth, with most (82%) of the increase coming from six major markets: Germany, Spain, the Netherlands, France, Italy and Sweden," the agency added .

The IEA also said that the two main trends that prompted it to revise its forecast were the growing attractiveness of the business case for self-produced energy since January 2021, and market conditions triggered by Russia's attack on Ukraine. The agency said it also raised its growth forecast for utility-scale PV systems, but to a much lesser extent due to licensing challenges, auctions with outstanding subscriptions and long development timelines.

Competitive auctions are expected to remain the dominant procurement method in Europe, accounting for at least 65% of the growth in renewable energy installations between 2022 and 2024.

"Nearly half of this increase will come from auctions of two-way fixed-spread contracts led by Poland, the UK, France, Italy and Spain," the IEA said.

Power purchase agreements (PPAs) and commercial plants are expected to account for 22% of new energy capacity additions in Europe by 2024. Corporate PPAs, led by Spain, Sweden, Germany, the Netherlands and Denmark, will account for the majority of the unused project share. Some unsubsidized projects are also likely to emerge in the UK, Italy and Poland, according to the IEA.

The agency also said: “While installations developed under full commercial models may be in the minority, PPA projects are expected to increase revenue by incorporating niche business models.”