The global renewable energy sector is experiencing a rapid expansion, but it still falls short of the global ambition to triple renewable energy capacity by 2030. According to the Renewables 2024 report by the International Energy Agency (IEA), global renewable capacity is expected to increase 2.7 times by 2030, surpassing government targets by nearly 25%.

However, this growth is not enough to meet the target set by nearly 200 countries during the COP28 climate summit. Additional policy improvements are needed to address gaps in grid integration, financing challenges, and the deployment of renewable fuels like hydrogen and bioenergy.

An earlier report by the International Renewable Energy Agency said the world must achieve a minimum annual growth rate of 16.4% in renewable energy installations to triple capacity by 2030.

2023: A Record Year for Renewables

In 2023, the renewable energy sector experienced its fastest capacity growth ever, with global capacity additions exceeding 565 GW, a 60% increase from the previous year. This surge was driven by continuous policy support in over 130 countries and declining technology costs, particularly for solar photovoltaic (PV) systems.

Solar PV alone accounted for 365 GW of the total renewable capacity added in 2023. The year saw records broken in 40 countries, led by China, which accounted for two-thirds of the global increase.

China’s solar PV capacity grew 2.5 times, while wind installations more than doubled, contributing to 70% of all new solar and wind capacity globally. The U.S. and Europe also saw significant growth. In Europe, countries like Germany, Spain, and France increased their renewable capacity by 28%, while the United States saw a 42% increase in capacity additions.

Solar PV to Dominate

Solar PV is expected to continue dominating the renewable energy market, contributing to 80% of global renewable power generation growth by 2030. The report forecasts that annual solar PV additions will increase from 565 GW in 2023 to nearly 940 GW by 2030—a 70% jump. This growth is being driven by solar’s economic competitiveness, declining installation costs, shorter permitting timelines, and widespread social acceptance.

Distributed solar PV, which includes residential, commercial, and industrial projects, is also set to expand significantly. In 2023, distributed solar capacity grew by over 60%, with China and Europe leading the market. As consumers and businesses seek to reduce electricity costs and mitigate price volatility, distributed solar installations are expected to continue accelerating in the coming years.

Wind Energy Recovery

Despite challenges, the wind energy sector is poised for recovery. The IEA forecasts that the rate of global wind capacity additions will double between 2024 and 2030 compared to the previous six years. Onshore wind saw a significant resurgence in 2023, with global capacity additions rebounding by 65% to 107 GW, primarily driven by China and India.

However, offshore wind installations have declined for two consecutive years, dropping by 15% in 2023. By 2030, wind is projected to contribute 30% of global renewable electricity generation, up from its current 15%.

Hydropower remains the largest renewable electricity source today, accounting for nearly 60% of renewable electricity generation. However, its share is expected to decline as wind and solar outpace its growth. In 2023, global hydropower capacity additions fell by 60% to 13 GW—the lowest level since 2001—due to project delays in regions such as North America, India, and Latin America.

China, United States, and Europe Lead the Charge

China’s dominance in the global renewable energy landscape is set to continue through 2030. By then, China will be home to 60% of the world’s total renewable capacity additions, and its cumulative solar PV capacity will surpass 1,200 GW. By 2030, China is expected to generate nearly half of the world’s renewable electricity.

Europe and the U.S. are also expected to experience significant growth. The EU is on track to meet its ambitious goal of 600 GW of solar PV capacity by 2030, though more effort is needed to boost wind capacity.

In the U.S., the Inflation Reduction Act continues to support growth, with tax credits incentivizing investments in wind, solar, and other renewable projects. India is another standout market, with renewables expected to account for 75% of the country’s electricity generation by 2030.

India

India will witness the fastest renewable energy growth among large economies from 2024 to 2030. By 2030, India’s total renewable capacity will likely surpass 450 GW, making it one of the top contributors to global renewable capacity expansion. This growth will primarily be driven by solar PV, accounting for nearly 75% of India’s new capacity additions through the decade.

By 2030, India is expected to generate 50% of its electricity from renewable sources, up from 25% in 2023. This rapid increase in renewable electricity will significantly decarbonize India’s energy sector and meet its climate targets.

Hydrogen Lags Behind

Despite growing policy support, renewable hydrogen and biofuels are not expected to drive significant renewable capacity growth by 2030. Hydrogen, which is seen as a key component in decarbonizing industries such as steel and chemicals, will account for just 4% of total hydrogen production by 2030. While global electrolyzer capacity is expected to increase fifty-fold by the end of the decade, only 43 GW of new renewable capacity will be dedicated to hydrogen production—less than 1% of the total global renewable capacity expansion.

Renewable fuels, including bioenergy, biogases, and e-fuels, are projected to account for 15% of the forecasted growth in renewable energy demand. However, the report indicates that biofuels will meet just 6% of total transport energy demand by 2030, highlighting the need for further policy measures to boost adoption.

Grid Infrastructure and Financing

A key challenge in accelerating renewable energy deployment is grid infrastructure. At least 1,650 GW of renewable capacity is in the advanced stages of development and awaiting grid connection—a 150 GW increase compared to 2022. The report also calls for better integration of battery storage, demand response, and flexible energy assets to accommodate the growing share of variable renewable energy (VRE), such as solar and wind.

High financing costs remain a major barrier to renewable energy deployment in emerging and developing economies. The report notes that renewables are economically less attractive in these regions due to weak grid infrastructure and policy uncertainty. The IEA recommends that governments create stable, long-term policy frameworks to reduce investment risks and unlock the vast renewable potential in these markets.

According to an earlier report by the IEA and International Finance Corporation, to meet the growing energy demand while aligning with the goals of the Paris Agreement, annual investment in clean energy will have to more than triple from $770 billion in 2022 to approximately $2.2-2.8 trillion per year by early 2030.