Solar photovoltaic energy reached new global highs in 2025, but one of the main drivers was the distributed segment, which reached 282 GW of new installations , compared to 228 GW in 2024.
In this way, distributed generation accounted for around 41% of the approximately 692 GW of new solar capacity added during the year , a significant leap for a segment that until 2016 totaled less than 19 GW annually.
This is reflected in the Trends in Photovoltaic Applications 2026 report from the International Energy Agency's Photovoltaic Energy Systems Programme (IEA PVPS), which also warns of growing overcapacity in the manufacturing industry and an acceleration of battery storage in markets with higher solar penetration.
With approximately 2.96 TW of photovoltaic capacity accumulated worldwide , the agency estimates that the currently installed park could produce about 3,846 TWh of electricity per year , considering an average yield of 1,300 kWh per kW.
That volume would be equivalent to about 12% of global electricity consumption .
According to IEA PVPS, the growth of distributed solar power is mainly due to the increase in self-consumption, the drop in module prices, and the expansion of rooftop systems and generation intended for local supply.
However, the evolution continues to show important differences between markets, conditioned by factors such as electricity prices, support schemes, network conditions and the profitability associated with self-consumption or the injection of surpluses.
China leads, but distributed solar is gaining ground in new markets.
China once again took first place globally and added 159 GW of distributed generation during 2025 , equivalent to approximately 38% of the 415 GW DC installed in the country during the year.
The segment's share increased from 35% in 2023 and 33% in 2024, although centralized plants continued to dominate the Chinese market.
One of the most notable cases was Pakistan , where all of the approximately 14 GW installed during 2025 corresponded to distributed systems. The country thus reached a cumulative total of nearly 36 GW.
India added another 12 GW distributed , about 22% of the total 54 GW installed in the year.
In terms of total photovoltaic capacity added during 2025, India has already positioned itself as the second largest global solar market behind China, followed by the United States with 43 GW, Germany with 18 GW and Pakistan with 14 GW.
Within distributed generation specifically, Germany added 9.2 GW , Brazil 7.9 GW and the United States 7.6 GW .
France, Turkey, Italy and Japan completed the top ten markets, with additions of 5 GW, 4.2 GW, 4 GW and 3.5 GW, respectively.
By the end of 2025, China had accumulated 533 GW of distributed solar capacity , significantly more than any other market. Germany had 83 GW, the United States 74 GW, Japan 61 GW, Brazil 43 GW, and India 36 GW.
Overcapacity: manufacturing continues to grow faster than production
However, the strong growth in solar demand coexists with what IEA PVPS defines as a “significant industrial imbalance” .
Manufacturing capacity continues to far exceed effective production at various stages of the photovoltaic supply chain, a situation that keeps product prices low and increases pressure on manufacturers.
In terms of modules, global production reached 722 GW in 2025 , down 0.6% from the previous year, while annual manufacturing capacity reached approximately 1,531 GW .
China accounted for 79% of global module production and 71% of manufacturing capacity .
However, its share of production declined from 86% in 2024, as other countries expanded their industries. India produced 45 GW of modules in 2025, and the United States reached 42 GW.
The gap between installed capacity and production is also observed in the other links.
Global solar cell manufacturing reached 779 GW , compared to an annual manufacturing capacity of 1,405 GW.
In wafers, production reached 742 GW , while available capacity amounted to 1,319 GW.
And in polysilicon, including material intended for semiconductors, 743 GW were produced compared to an equivalent capacity of 1,820 GW .
Storage grows along with solar penetration
In parallel with the photovoltaic expansion, IEA PVPS identifies strong growth in stand-alone battery storage systems in markets where solar penetration is already high.
Annual additions of BESS energy capacity in Europe and the United States combined increased from just 2.9 GWh in 2020 to 79 GWh during 2025 .
This represents a growth of more than 27 times in five years .
The advancement of energy storage appears within a broader challenge for electrical systems.
As photovoltaic penetration increases, the report points to the need to incorporate greater flexibility, more robust electricity grids, flexible demand, and better forecasting tools to manage periods of high solar production.
Thus, the next phase of expansion of the photovoltaic market will not only be determined by how many new GW can be installed, but also by the ability of electrical systems to make more efficient use of the almost 3 TW of solar power that is already operational worldwide.