Solar is the fastest-growing source of electricity worldwide and a cornerstone of global decarbonization efforts. China, the U.S., and India are leading the charge, but Canada’s solar journey is slower — with both potential and challenges ahead.

Global Snapshot: Solar Is Growing Fast

By the end of 2024, annual global solar generation was an estimated 2129 terawatt hours (equal to 2,129,000 annual gigawatt hours), double what it was in 2021.¹

Here’s some context:

• BC Hydro generates approximately 43 terawatt hours of electricity annually to supply more than 1.6 million residential, commercial and industrial customers, almost all of it from hydroelectric sources. ²
• Canada’s total electricity generation from all sources in 2024 was approximately 644 terawatt hours, with solar supplying just over 1% of that. ³

Globally, solar now accounts for 7% of global electricity generation. Rapid growth is accelerating thanks to large capital allocations: investment in solar is up 211% in ten years, from US$142 billion in 2015 to an estimated US$441billion in 2025.⁴ This surge is being driven by falling costs, supportive government policy, and climate urgency. The cost of solar panels has dropped by over 80% in the past decade, and in many regions, solar is now the cheapest form of electricity — even beating coal and natural gas.

China is leading, adding over 200 gigawatts (0.2 terawatts) of solar capacity in 2024 alone, more than the rest of the world combined. Not surprisingly, China manufactures around 80% of global solar panel production.

The U.S. and India are also expanding aggressively. The U.S. added more than 30 gigawatts of solar capacity last year, driven by tax incentives and utility-scale projects. India, with its ambitious renewable targets, is on track to exceed 100 gigawatts of solar capacity by 2026. In Europe, Germany and Spain are scaling up solar rapidly. So are developing countries like Brazil, Vietnam, and South Africa, where solar is helping power economic development while reducing dependence on fossil fuels.

The Integration Challenge

While solar generation is booming, integration is the new frontier. A key issue is that solar is intermittent — it doesn’t produce power at night, and output varies with weather. That’s pushing the need for grid modernization, storage at scale, and smart energy management. Battery technology is improving, but not fast enough. Countries are now focusing on solar-plus-storage, grid flexibility, and better forecasting to smooth out the variability. Demand for long-duration energy storage and virtual power plants (VPPs) is rising: VPPs are networks of decentralized energy resources, such as solar panels, home batteries, and smart appliances, that are connected and controlled remotely to act as a single, coordinated power plant.

Solar in Canada

Canada gets plenty of sunlight, especially in the Prairies, but as of 2025 our solar capacity is a small fraction of the global total. A key reason is that hydropower (mainly from dams) supplies around 60% of our electricity. Quebec and British Columbia have abundant, cheap hydro resources, reducing the need to adopt solar. In oil-rich Alberta and Saskatchewan, the political and regulatory environments lean towards fossil fuels.

But Alberta did experience a considerable expansion of market-based, renewable energy development several years ago. By 2023, 92% of Canada’s growth in renewable electricity generation came from Alberta, with a deregulated energy production environment and ample sun and wind creating favourable investment conditions. The majority was in wind power, but there were also 329 megawatts of utility scale solar installed in the province.

However, 2023 was also the year the Alberta government temporarily banned new renewable energy projects. The moratorium was lifted seven months later but was immediately followed up by new regulations blocking renewable energy projects from being within 35 kilometres of “pristine viewscapes” and parks and protected areas, plus a near total ban on land deemed usable for agriculture. According to Alberta’s Pembina Institute, one result of the province’s new approach has been the cancellation of project proposals totalling almost 11 gigawatts of wind, solar and energy storage.⁵

Ontario, which once led Canada in solar development through its now-defunct Feed-in Tariff program, still has a significant base of residential and commercial solar but growth has slowed. Meanwhile, some indigenous communities across Canada are embracing solar to power remote regions and reduce reliance on diesel. These community-driven projects are small but often combine solar with storage.

Challenges

1. Policy inconsistency – Solar development policy varies widely by province and federal incentives are limited compared to other countries.
2. Grid constraints – Our vast geography and centralized grids make integration of decentralized solar more complex.
3. Seasonality – Our long winters and short days can limit production. But this is partly offset by high solar irradiance (the measure of power from the Sun in the form of electromagnetic radiation received in a specific area) during summer and excellent generation potential in the Prairies.
4. Public awareness – Solar is still perceived as niche or expensive in many parts of Canada, despite falling costs and rising efficiency.

The Road Ahead

In 2021the federal government announced an ambitious goal of achieving net-zero electricity nationally by 2035. But in late 2024 that target was pushed out to 2050, in part due to objections from Alberta, Saskatchewan and Ontario that the timeline was too tight. Solar can play a significant role in reaching the 2050 goal, but Aberta has said it will mount a legal challenge to the revised regulations.⁶

Final Thoughts

The world is building solar faster than any other source of electricity. While Canada has been slow to join the sprint, the potential is enormous — especially in Alberta, Saskatchewan, and Northern communities. We have significant fossil fuel resources and are ramping up export of those, particularly LNG. However the opportunities for developing solar are real and may become increasing important in the future as customers seek, or even demand, clean energy.

Sources

1 https://ember-energy.org/latest-insights/global-electricity-review-2025/#executive-summary

2 https://www.bchydro.com/energy-in-bc/operations/generation/electric_generation.html

3 https://ember-energy.org/countries-and-regions/canada/

4 https://www.visualcapitalist.com/1-5-trillion-in-global-power-investment/

5 Renewable energy project cancellations in Alberta hit alarming milestone | Pembina Institute

6 https://www.cbc.ca/news/politics/net-zero-electricity-climate-canada-1.7412874