New energy report highlights solar power generation surge

Solar alone accounted for 72% of that growth, underlining the technology’s increasingly central role in the global energy transition. The figures appear in the latest statistical review of the global energy market, published annually by the Energy Institute.

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Gareth Phillips, renewable energy expert at Pinsent Masons, said: “Utility-scale solar, with 40–60-year operational periods, remains popular in attracting institutional investment, with some forward funding development expenditure through joint ventures with developers.”

According to the report, solar generated 8.7% of global electricity in 2025, narrowly overtaking wind power, which accounted for 8.4%. Together, wind and solar generation reached 8.52 terawatt hours (TWh) in generating capacity, exceeding combined output from coal and gas-fired generation, estimated at 769 TWh. The growth in solar generation was driven by a record 511 gigawatts (GW) of additional installed capacity during 2025, with falling technology costs continuing to improve solar’s competitiveness against fossil fuel generation. The report concluded that a “record solar power rise pushed clear power to meet global electricity demand growth in 2025 causing fossil fuel generation to plateau”.

The rapid development of solar across Europe has also been linked to policy measures introduced following Russia’s invasion of Ukraine, which prompted the EU to accelerate plans to expand domestic renewable energy capacity and reduce dependence on imported fossil fuels, the report notes.

The report also highlights the efficiency advantages associated with renewable generation. It estimates the average efficiency of thermal power generation at 41%, while wind and solar are treated as 100% efficient because they convert naturally occurring energy resources directly into electricity without fuel combustion. As a result, the increase in electricity demand met by wind and solar during 2025 would have required more than double the increase in total energy supply if fossil fuels had been used instead.

The strong market fundamentals appear to be feeding through into investment decisions. Pinsent Masons’ own research found a significant increase in solar investment intentions among energy investors and developers. The proportion of global respondents planning to invest in or develop a solar project within the next year rose from 11% to 25%, making solar one of the fastest-growing areas of interest across the energy sector. This trend was mirrored by appetite for wind projects, which looks set to jump from 9% to 19%.

The data also revealed interesting regional trends. For example, in the UK, appetite rose dramatically from 2% to 20%, whilst US appetite remained more consistent, rising from 18% to 20%. In China, which has the most significant installed solar capacity globally, the data showed a planned investment activity increase from negligible to 21%, aligning with wider market trends that saw installed solar capacity in China grow by 35.5% last year.

“Whilst we are seeing supply chain costs increasing worldwide, solar continues to be the cheapest form of energy, and well supported by policy. Just this week, in the UK we have seen three nationally significant solar projects – Dean Moor, Peartree and One Earth, totalling c.1.2GW – gain consent from Ed Miliband,” said Phillips.

Phillips added: “Some utilities are divesting portfolios of smaller, distribution scale projects to facilitate larger investment in transmission connected assets. For instance, Total Energies recently completed the divestment of its distribution solar generation portfolio across seven European countries. Pinsent Masons advised on the deal that brought together colleagues from multiple offices, reflecting the cross-border collaborations often required to deliver complex energy transactions spanning Europe.”