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Renewable energy is set to supply about 43% of the world’s electricity by 2031, up from 33% in 2025, according to the International Energy Agency (IEA). Solar photovoltaic (PV) and wind will provide more than 80% of the growth in global electricity generation during 2025–2031, with solar expected to overtake hydropower in annual generation in 2029. That is a bright outlook, but it is not a promise that every project will connect or that every kilowatt-hour will be usable: grids, storage, flexible demand, permitting and firm generation must expand alongside turbines and panels.
This distinction—between equipment installed, electricity generated and electricity delivered when needed—is the key to understanding renewable energy’s next phase.
How fast is renewable energy expanding?
Expansion is occurring at both the capacity and generation levels, but those measures describe different things. Capacity, measured in gigawatts (GW), is the maximum output a plant can produce at a moment under suitable conditions. Generation, measured in terawatt-hours (TWh), is the electricity actually produced over a period. A solar farm’s nameplate capacity can be large while its annual generation is limited by night, clouds and seasonal daylight.
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1Repair Windows errors before they cause bigger problems2Scan for outdated or missing drivers - takes under a minute3Clear out junk files and repair common Windows errorsThe IEA’s Global Energy Review 2026 estimates that the world added about 800 GW of renewable capacity in 2025. Solar PV supplied more than three-quarters of those additions and wind accounted for 20%. The 2025 total includes estimates for places where complete full-year data were not yet available, so it should be read as an estimate rather than a final audited count.
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For the longer outlook, the IEA’s Renewables 2026 forecast puts renewables at 43% of global electricity generation in 2031, compared with 33% in 2025. Its executive summary rounds the 2031 figure to “almost 45%.” Neither percentage is the share of all energy use: it refers to electricity generation only.
Solar PV and wind dominate the forecast because their additions can be built in relatively small increments, costs have fallen and deployment is spreading across utility, commercial and household projects. Hydropower remains a major source of renewable electricity, but its growth depends more heavily on suitable sites, water availability, long construction times and environmental permitting.
Why are solar PV and wind leading the growth?
The IEA expects wind and solar PV together to provide over 80% of global electricity-generation growth from 2025 through 2031. Solar’s growth is especially rapid: the agency forecasts that solar PV will pass hydropower in global annual generation in 2029.
Cost is one reason. The IEA’s Energy Technology Perspectives 2026 says that around 80% of global solar PV and wind generation now occurs at lower levelised costs than coal or gas, “supporting a surge in global capacity additions.” Levelised cost compares the average cost of producing electricity over a plant’s lifetime. It does not guarantee a lower retail bill in a particular country, because delivered power also includes grids, balancing, taxes, financing and local market rules.
Battery prices have fallen 75% over the past decade, according to the same IEA summary. Cheaper batteries improve the economics of shifting solar output into evening hours and of providing short-duration balancing, although batteries do not eliminate the need for transmission, demand management or other forms of firm capacity.
What is the difference between renewable capacity and renewable generation?
Capacity is the size of the fleet; generation is its energy harvest. Consider two systems with the same 10 GW of capacity: a nuclear or hydro fleet may produce near-continuously, while a solar fleet produces only when sunlight is available. Their annual TWh totals can therefore differ substantially.
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This is why an 800 GW addition figure cannot be converted directly into an equal increase in electricity’s renewable share. Capacity additions are a construction flow. The 43% figure is an output share after weather, operating performance, curtailment, maintenance and grid access are taken into account.
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Capacity can still be valuable even when its average output is lower. Solar and wind reduce fuel use and emissions when available; geographically diverse projects can smooth weather differences; and storage or flexible loads can move some production to more valuable hours. The system question is not simply how many gigawatts are installed, but how much dependable, affordable electricity those gigawatts can deliver.
Can grids absorb all the new renewable power?
Not without major investment and better coordination. Wind and solar output varies with weather and time of day, while electricity demand must be balanced continuously. The IEA identifies transmission and distribution upgrades, stronger interconnections, storage, dispatchable generation, flexible demand and faster permitting as the main integration requirements.
Curtailment occurs when a grid operator reduces available wind or solar output because the network cannot carry it, demand is too low or the system lacks flexibility. The IEA estimates almost 200 TWh of technical wind and solar curtailment in selected key markets in 2025 and warns that this could exceed 800 TWh by 2031 if grid and flexibility measures lag. These are IEA estimates and a projection, not a global measurement of every unit of unused renewable energy.
Transmission can move power from windy or sunny regions to population centres. Interconnections let neighbouring systems share surpluses and deficits. Batteries can shift energy over hours; pumped-storage hydropower and other technologies can provide longer-duration services. Demand response—such as moving industrial processes, water heating or vehicle charging to high-output periods—can reduce the amount of new generation and network capacity needed for peaks.
Dispatchable resources remain part of the transition. Existing hydropower reservoirs, geothermal plants, sustainable bioenergy and other firm sources can complement variable renewables. The appropriate mix differs by system; a windy country with strong interconnections has different needs from an isolated, solar-rich grid.
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Where will renewable growth happen?
Global averages conceal very different national paths. China remains a major driver of additions, while the IEA also expects substantial growth outside China, including in emerging markets. Policy stability, access to finance, electricity-demand growth, local manufacturing, supply-chain conditions, land and water constraints, and the speed of grid construction all influence deployment.
Solar PV is a leading growth source across several regions because projects can be built from rooftop scale to multi-gigawatt parks. Wind growth depends more strongly on resource quality, transmission corridors, turbine supply and permitting, particularly for offshore projects. Hydropower continues to play a major role in parts of Latin America and sub-Saharan Africa, where it can provide both renewable generation and reservoir-based flexibility, although drought risk and ecological impacts require careful planning.
Regional comparisons must use the same measure and year. A country’s 2025 capacity addition is not directly comparable with another country’s forecast 2031 generation share. The IEA’s regional outlook separates observed data from projections and treats policy and infrastructure assumptions as important sources of uncertainty.
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They are likely to become more common, but there is no universal household payback or suitability rule. The IEA expects behind-the-meter battery storage to expand almost sixfold to more than 670 GWh by 2031, and forecasts that more than one-third of home PV systems will include a battery by then.
Whether a battery makes sense for a particular home depends on the retail tariff, export compensation, outage risk, system size, roof orientation, financing, local rules and the battery’s usable life. A battery may increase self-consumption or provide backup, but it also adds upfront cost, conversion losses, maintenance and eventual replacement. Those household decisions should be based on a local installer’s design and current tariff data, not on the global forecast alone.
Are renewables actually cheaper than fossil-fuel electricity?
At the generation-plant level, often yes: the IEA reports that around 80% of global solar PV and wind generation now has a lower levelised cost than coal or gas. That comparison describes the cost of producing electricity at the plant, under the assumptions used in the IEA analysis.
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A customer’s delivered bill includes more than generation. Transmission and distribution, balancing services, capacity payments, taxes, subsidies, financing costs and retail margins can outweigh changes in wholesale generation costs. A high-renewables system may also need investment in lines, storage and backup resources. Conversely, it can reduce exposure to fuel-price volatility because sunlight and wind have no fuel purchase cost. “Cheaper generation” and “cheaper household bills” are related but not interchangeable claims.
What could derail the optimistic forecast?
The IEA’s main case and accelerated case are scenarios, not guaranteed outcomes. Delays in transmission, slow permitting, high interest rates, equipment shortages, policy reversals or weak electricity demand could postpone projects. Faster grid approvals, stronger targets, cheaper finance, rapid storage deployment and rising demand from industry or electrification could accelerate them.
Supply chains also matter. Solar modules, wind turbines, inverters, transformers, batteries and critical minerals must be manufactured, transported and connected. Concentration in particular manufacturing stages can create exposure to trade restrictions or disruptions, while attempts to diversify supply may raise near-term costs.
Climate itself adds uncertainty. Heat, drought, storms and changing wind or river conditions can affect output and infrastructure. Resilient design, geographic diversity, forecasting and maintenance are therefore as important as headline capacity targets.
What should viewers watch between now and 2031?
- Grid queues and completion rates: announced projects matter less than projects that secure permits, financing and interconnection.
- Transmission and interconnection investment: new lines indicate whether high-resource areas can reach demand centres.
- Storage duration and utilization: installed battery GW alone does not reveal how many hours of shifting the system has.
- Curtailment data: rising curtailment can signal that generation is growing faster than the network.
- Electricity demand: data centres, industry, heat pumps and electric vehicles can absorb more clean power, but only if connections and tariffs allow it.
- Policy and finance: auctions, tax rules, permitting deadlines and borrowing costs can change the pace quickly.
The central story is therefore two-stage. The first stage—building solar, wind, hydro and other renewable capacity—is advancing rapidly. The second stage is making that capacity useful: connecting it, balancing it, storing it, sharing it across regions and matching production with demand.
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What does the renewable-energy outlook mean overall?
The evidence points to a substantially brighter renewable future, led by solar PV and wind and reflected in a forecast rise from 33% to 43% of global electricity generation between 2025 and 2031. But installed capacity is not the same as delivered electricity, and low generation costs do not automatically produce low household bills. The outcome will depend on whether grids, flexibility, permitting, finance and regional planning keep pace with the panels and turbines.
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Renewables are moving from a question of possibility to a question of system design. The countries that capture the benefits will be those that build the supporting infrastructure as deliberately as they build generation.
Frequently Asked Questions
Does a 43% renewable share mean nearly half of all energy will be renewable by 2031?
No. The IEA figure is the share of global electricity generation, not total energy use across electricity, transport fuels, industrial heat and other sectors. Total energy demand has a different mix and must be assessed with separate measures.
Why can renewable electricity be curtailed if it has no fuel cost?
Wind and solar can be available when the network has insufficient capacity, demand is low or the system lacks storage and flexible resources. Operators reduce output to protect reliability; adding transmission, interconnections, storage or flexible demand can reduce that waste.
What does solar overtaking hydropower in 2029 actually mean?
It refers to global annual electricity generation by solar PV surpassing generation from hydropower in the IEA forecast. Hydropower can still remain crucial for storage, flexibility and regional electricity supply even if solar produces more TWh worldwide.
Will batteries replace power plants that can run on demand?
Batteries are effective for fast response and shifting electricity over several hours, but they do not cover every multi-day or seasonal shortfall. Power systems generally need a portfolio that can include storage of different durations, demand flexibility, interconnections and dispatchable generation.
Why might renewable growth differ sharply between neighbouring countries?
Resource quality is only one factor. Grid access, permitting, financing costs, market rules, land constraints, industrial policy and electricity demand can make deployment faster in one country than another, even when both have strong solar or wind resources.
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