This is an extract from a recent report “Global Market Outlook for Solar Power 2025-2029” by SolarPower Europe. This extract specifically focuses on United States and Mexico.

United States

The United States solar industry experienced a second consecutive year of record-breaking deployment growth. According to the Solar Energy Industries Association’s (SEIA) Solar Market Insight Year in Review, the US added 50 GW of new solar capacity in 2024. This represents a 21% increase from 2023 and is the largest single year of new capacity added to the US grid by any energy technology in over two decades. In terms of total capacity, the US now operates a solar fleet of more than 235 GW, enough to power nearly 40 million homes. This momentum kicked off in 2023 as the market recovered from supply chain disruptions that persisted throughout the COVID-19 pandemic. In 2024, the market began to feel the full impact of federal clean energy incentives in the Inflation Reduction Act (IRA). Solar and storage accounted for 84% of all new capacity added to the grid last year, and these technologies comprise 75% of all new generation under development in the United States.

Solar deployment increased across most market segments in 2024. The one exception was the residential segment, which was impacted by high interest rates and is adjusting to state-level policy changes. The utility-scale segment captured the largest share of new capacity and installed 41.4 GW in 2024, a 33% increase from 2023. The residential sector remained the second largest market and installed 4.7 GW in 2024, declining 31% from 2023. The commercial and industrial segment installed 2.1 GW and the community solar sector added 1.7 GW in 2024, growing respectively 8% and 33% from 2023 levels.

Drivers for solar growth

Solar dominated new electric generating capacity added to the US grid in 2024, accounting for two-thirds of all new capacity. This is the fourth consecutive year that solar was the leading source of new electric generating capacity. It was also the first time solar accounted for over 60% of new electric generating capacity. Over the past 15 years, electricity demand has been flat. Today, US electricity demand is surging due to the proliferation of new manufacturing facilities, increasing electricity needs from data centres and artificial intelligence, and electrification in the transportation and heating sectors. By 2030, US electricity demand is expected to grow 7%, from 4,300 TWh in 2024 to 4,600 TWh.

According to data from the US Energy Information Administration (EIA), solar and storage are the fastest technologies to deploy, averaging roughly 18 months to develop from project concept to operation. In contrast, new natural gas capacity takes two to four years to come online, while nuclear projects average over 15 years. Federal and state deployment incentives are foundational to ensuring solar continues to be installed at a rapid pace. This includes the 10-year tech-neutral investment tax credit, which is critical to financing projects and growing the solar project pipeline.

Federal manufacturing incentives are also critical to ensuring solar supply chains remain resilient and enable rapid US solar deployment. Domestic solar manufacturing grew at an unprecedented rate in 2024 due to direct incentives. At full capacity, domestic module factories can produce enough supply to meet all US solar deployment demand. There is also enough domestic tracker capacity to meet US utility solar demand. In addition, more facilities are expected to come online in the next few years, spanning different solar products and further reducing supply chain risk.

Market Challenges

Many of the most pressing challenges for the US solar industry remain static. Tight labour and tax equity availability continue to threaten how quickly the solar industry can deploy new electric generating capacity. Continued challenges to siting, permitting, and interconnecting solar projects can increase project development timelines and costs. New trade action can inject uncertainty into the deployment outlook, even with a growing domestic solar supply chain. In addition, any changes to state or federal incentives can modify the US solar deployment outlook. These incentives are critical to providing visibility into project economics as solar projects are developed. Addressing all of these barriers will be key to meeting the country’s growing power demand.

Mexico 

In 2024, Mexico’s solar PV market installed 1.6 GW, a 3% decrease compared to the 1.65 GW added in 2023 but a 37% increase over the 1.18 GW added in 2022. Total operating capacity in the country reached 12.6 GW, which constitutes a growth of 15% from 2023. Out of the total installed capacity, utility-scale PV represents 65% (8.2 GW) and distributed solar PV 35% (4.4 GW). Utility-scale PV contributed 523 MW of added capacity in 2024, a significant decrease from the 925 MW added in 2023, making it the lowest annual addition since 2017 (with 580 MW in 2022, 0.99 GW in 2021, 1.5 GW in 2020, 1.8 GW in 2019, 1.7 GW in 2018). 

In contrast, distributed solar PV saw its first-ever annual growth of over 1 GW, with a total addition of 1.08 GW, 49% higher than the 728 MW added in 2023. Considering the entire electricity mix, utility-scale PV capacity represents 8.9% of total installed capacity (92 GW), while fossil-fuel-based technologies account for nearly 63%. In terms of power generation, out of a total 352 TWh generated in 2024, fossil-fuel-based technologies contributed 77% (272 TWh), maintaining the same share as in 2023. Meanwhile, solar PV generation saw no growth in 2024, contributing 5.3% (18.6 TWh), equal to its share in 2023 but slightly higher than the 4.9% recorded in 2022.

Regulatory landscape

Before 2013, electricity supply in Mexico operated under a vertically integrated monopoly, owned and managed by the state through the Federal Electricity Commission (CFE). Following the 2013 energy reform, which involved the unbundling and restructuring of the CFE, a competitive electricity market was introduced for generation and supply, along with open access to transmission and distribution grids. In 2015, the Energy Transition Law (LTE) established clean energy targets for electricity generation: 25% for 2018, 30% for 2021, and 35% for 2024. The 2018-2024 government implemented significant energy policy changes through executive and legislative efforts aimed at favouring the state-owned company, many of which were contested by private companies through legal channels. This disruption resulted in regulatory paralysis and hindered new private investment in renewable energy. 

In June 2024, a new government was elected for the 2024-2030 term, securing full control of Congress. In October 2024, constitutional amendments were approved, establishing that private companies shall not prevail over the state-owned company (CFE), which is now defined as a ‘public’ company with an integrated structure, and whose activities are not considered monopolistic. In February 2025, the President submitted the secondary legislation related to the new energy reform to Congress. The new laws establish a hybrid model in which the State must ensure ‘prevalence’ by maintaining at least 54% of the annual energy injected into the grid. However, it remains unclear what measures the Ministry of Energy could take if this prevalence is not achieved. The secondary legislation was approved by Congress on March 12 and published by the Presidency on March 18.

In March 2025, a new regulation for the integration of Energy Storage was published, aimed at encouraging the deployment of Battery Energy Storage Systems (BESS). The regulation mandates BESS for all new utility-scale solar or wind power plants and allows energy storage for self-supply power plants, distributed generation, and electricity consumers. Additionally, a standalone scheme has been introduced, which is expected to function as a grid component.

Renewable energy and solar PV targets

Mexico failed to meet its clean energy target for 2024 (35%), with clean energy generation accounting for only 23% (80 TWh). While the new government has emphasised its commitment to accelerating the clean energy transition, the secondary legislation neither sets new clean energy targets for the coming years nor includes specific mechanisms to encourage new clean energy investments.

Challenges

Following the 2024 energy reform, private participation in the electricity sector will be subject to the new mandatory planning conducted by the Ministry of Energy, which will determine the amount of variable renewable energy that can be incorporated into the grid. The new Electricity Sector Law outlines two additional mechanisms for private participation: Long-term Production (PPAs, where the CFE purchases electricity from private companies) and Mixed Investment, which requires direct or indirect participation of at least 54% by the CFE. To ensure the achievement of the objectives of the new government’s National Electric Sector Strategy, it will be necessary to deploy all components simultaneously, efficiently, and swiftly: distributed generation, self-supply, market-based generation, long-term production, and mixed investments, within a framework of social inclusion and environmental management.

Outlook

Despite the uncertainty caused by numerous legal changes, the current administration has demonstrated a clear willingness to address the concerns of private investors. It will be crucial that the complementary framework – comprising regulations, manuals, and standards – provides clarity and consistency to guarantee the success of the new investment models outlined in the legislation.

Access the report here