The solar panels industry has emerged as a cornerstone of the global transition to renewable energy, driven by escalating climate concerns, technological advancements, and supportive policies. As of 2025, the sector is experiencing unprecedented growth, with solar photovoltaic (PV) installations shattering records and manufacturing capacities expanding to meet surging demand.
The solar PV market has seen explosive expansion in recent years, underscoring its role in achieving net-zero emissions goals. In 2024, the world installed a record 597 GW of new solar capacity, marking a 33% increase from 2023 and pushing cumulative global capacity to approximately 2.25 TW by year’s end. This growth is fueled by falling costs—solar PV module prices have declined over 80% in the past decade—making it the most affordable electricity generation technology in many regions. Projections indicate that annual installations could stabilize or slightly grow in 2025, with global manufacturing capacity for solar modules reaching 1.8 TW by the end of the year, far outpacing demand and leading to overcapacity issues.
Technological innovations are a major driver, with advancements in high-efficiency cells like TOPCon and heterojunction technology (HJT) replacing older PERC models, improving energy yields and reducing material use. Integration with energy storage, electric vehicles, and smart grids is accelerating, as seen in the U.S., where solar accounted for 69% of new electricity-generating capacity in Q1 2025. Additionally, investments in clean energy technologies, including solar, are set to surpass those in upstream oil and gas for the first time in 2025, with solar PV comprising half of all cleantech spending.
However, challenges persist. Supply chain vulnerabilities, particularly concentration in key regions, pose risks amid geopolitical tensions and trade policies. Overproduction has led to stockpiles and financial strain on manufacturers, while demand for critical minerals like polysilicon is rising rapidly. Policies such as the U.S. Inflation Reduction Act (IRA) and India’s Production Linked Incentive (PLI) scheme are fostering domestic manufacturing to enhance energy security and job creation, with global solar employment potentially reaching millions. Looking ahead, solar is poised to dominate electricity growth, with renewables expected to surpass coal as the world’s leading energy source by 2025.
Solar panel production is highly concentrated, with Asia dominating the global supply chain. Manufacturing involves stages from polysilicon production to module assembly, and capacity has grown to address rising installations. Below is a ranking of top countries based on their share of global production (using 2022 data as a baseline, adjusted for 2025 trends), along with their roles, capacities, and key contributions. China holds an overwhelming lead, producing around 80% of the world’s solar panels, while emerging hubs diversify the landscape.
| Rank | Country | Production Share (approx., recent) | Key Role and Facts |
|---|---|---|---|
| 1 | China | 78-80% | Global leader in the entire supply chain, controlling 95% of polysilicon, ingots, and wafers by 2025. Role: Mass producer and exporter, driving cost reductions through scale and innovation. Home to top manufacturers like JinkoSolar and LONGi; solar cell exports grew 73% in 2025. Challenges include overcapacity and reliance on coal for manufacturing energy. |
| 2 | Vietnam | 6-7% | Emerging alternative hub for assembly, attracting Chinese firms like Trina Solar to diversify amid trade tensions. Role: Low-cost manufacturing base with rapid capacity growth; installed solar capacity exceeded 17 GW by 2023. |
| 3 | Malaysia | 3% | Key player in module assembly, hosting international firms like JinkoSolar and First Solar. Role: Attracts foreign investment with skilled labor and incentives; focuses on exports, with solar capacity at 1.93 GW in 2023. |
| 4 | India | 2% | Fast-growing domestic producer, with policies like PLI boosting local manufacturing. Role: Reduces import dependence, targeting 280 GW installed capacity by 2030; home to Adani Solar and large farms like Bhadla (2.7 GW). |
| 5 | United States | 2% | Leading non-Asian producer, with IRA spurring resurgence. Role: Focuses on innovation and domestic supply; module capacity reached over 50 GW in early 2025, emphasizing high-efficiency tech via firms like First Solar. |
| 6 | South Korea | 2% | High-tech manufacturer emphasizing efficiency. Role: Exports advanced modules through Hanwha Qcells; committed to net-zero by 2050, with unique integrations like BIPV. |
| 7 | Thailand | 1% | Growing assembly hub with floating solar innovations. Role: Plans to add 24 GW by 2037; hosts world’s largest hydro-solar hybrid farm. |
These rankings reflect production shares, but note that many “non-Chinese” outputs involve Chinese-owned factories relocating for diversification. Countries like Taiwan (0.5%) and others contribute marginally but are vital for specialized components.
The solar panels industry is at a pivotal juncture, with robust growth tempered by supply chain risks and the need for diversification. China’s dominance ensures affordability and scale, but emerging players like India and the U.S. are enhancing resilience through policy-driven expansion. As solar PV becomes integral to global energy systems, collaborative efforts to address vulnerabilities will be crucial for sustainable progress.