India, US, Middle East to add 100 GW solar capacity in 2025; China to remain leader: Wood Mackenzie

India, the US and the Middle East are together expected to add 100 GW of solar capacity in 2025, while China will remain a dominant player in the sector, Wood Mackenzie has said.

According to its latest research, the module prices will also increase this year, after two years of low solar panel prices due to global overcapacity.

This will compensate for the significant losses in profits that manufacturers experienced, it said.

"Emerging hubs in India, the US and the Middle East are expected to add at least 100 GW to the global solar manufacturing capacity," Wood Mackenzie said.

China will remain the dominant manufacturing hub. China will continue to be the world's solar manufacturing centre with 75 per cent (1.2 TW (terawatts) of the global operational capacity for major module components, the report said.

Wood Mackenzie said that coordination by Chinese manufacturers, supported by the Chinese government, will be the key to bringing about rationalisation of the industry.

In 2025, advanced solar technologies TOPCon and Heterojunction (HJT) will be the predominant cell technologies for utility-scale applications, displacing p-type PERC (Passivated Emitter and Rear Contact) technology.

This shift will result in better module efficiencies and higher power densities.

The global solar industry will also need to adapt to a new and more uncertain policy paradigm this year as many countries held elections in 2024, and some of the new administrations coming into power bring a more conservative climate agenda to the table.

Uncertainty around renewable energy policy and the future of incentives creates ambiguity that will deter or halt solar project development in many regions.

Protectionist policies and local content mandates introduce additional costs and challenges, particularly in markets without a mature solar manufacturing base.

"For example, developers and manufacturers in India struggle with higher costs of domestic modules and upstream components, and the policies affect project timelines and economic feasibility, hindering the growth seen in 2024," Wood Mackenzie said.

As per the Ministry of New and Renewable Energy, India's total non-fossil fuel-based capacity has touched the level of 217.62 gigawatts (GW) as of January 20.