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5 Countries With the Highest Installed Solar Capacity (No. 2 May Surprise You)

By Travis Hoium - Updated Sep 7, 2017 at 6:57AM

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Solar is booming around the world, and there are some surprising leaders -- and up-and-comers -- in the industry.

Utility scale solar installation with thin-film panels in the desert.

Image source: First Solar.

Solar energy is the fastest-growing new source of energy in the world, and it's still just scratching the surface of its potential. According to the International Energy Agency (IEA), at least 302 GW of solar capacity were in operation at the end of 2016, enough to power 49.5 million U.S. homes. And solar energy still provides less than 2% of the world's electricity needs, meaning there are years, or even decades, of growth ahead. 

The leading solar countries have made a concerted effort to build more renewable energy and include some usual solar powerhouses and some surprising entries. There could even be some new entrants on this list a year from now. For now, here are the top five. 

Utility scale solar plant with a setting sun in the background.

Image source: Getty Images.

China

China has been the power behind the solar industry for more than a decade. But it was long a supplier of solar modules rather than a leading installer of solar power capacity itself. 

In 2016, China installed 40 GW of new solar projects, according to the IEA, ending the year with 78 GW of capacity. Momentum has continued in 2017, with 35 GW of installations in the first seven months of the year. There may be 45 GW or more installed by the time the year is done, more than the total global solar market annually as recently as 2014. 

Solar panels on a roof with a partly cloudy sky in the background.

Image source: Getty Images.

Japan

Slowly but surely, Japan has made its way to No. 2 on the global solar list, with 42.8 GW of capacity installed. The market has been driven by generous feed-in tariffs, or predefined rates the utility must pay for energy generated from solar projects large and small. 

Japan is a different solar market from most of the global leaders. It has less available space than China and the U.S., so it puts more focus on distributed solar projects on the roofs of homes and commercial buildings. It's here that high-efficiency modules from SunPower (SPWR 3.62%), Canadian Solar (CSIQ 2.32%), and Panasonic have found a level of success. 

While Japan is the No. 2 solar market in the world today, it won't hold that spot for long. Installations fell 20% in 2016 to 8.6 GW, and the government is reducing feed-in tariff rates to contain the industry's growth. This may not be the biggest solar market in the world, but it's a key market nonetheless. 

Solar installation with two wind turbines in the distant background.

Image source: Getty Images.

Germany

The solar industry's original powerhouse is Germany, which created the modern solar industry as we know it with its feed-in tariff scheme in the early 2000s. In 2011, the country peaked, installing 7.5 GW of solar energy capacity. And that's when it drastically cut feed-in tariffs to reduce installations. It's now using tenders with set installation levels rather than feed-in tariffs -- which led to a free for all of installations -- to drive solar economics. 

In 2016, Germany installed just 1.5 GW of solar and ended the year with 41.2 GW of capacity. This is still an important solar market globally and is a leader in next-generation solar-plus-storage technology, but it probably won't be in the top five for long. 

Small solar installation with an urban skyline in the background.

Image source: Getty Images.

USA

No country has more solar potential than the United States. The country consumes more energy than any other in the world, and a relatively small amount of space in the U.S. -- like the Mojave Desert -- could generate enough electricity to power the entire country. 

After installing 14.7 GW of solar capacity in 2016, the U.S. has 40.3 GW of solar capacity, supplying just over 1% of the electricity consumed in a year. Utility-scale projects have been dominated by domestic companies First Solar (FSLR 2.95%) and SunPower, but the U.S. imports a vast majority of the solar modules it installs. Unlike China, this is a solar-energy production market, not a solar manufacturing power, for the time being.

Large roof with solar modules.

Image source: Getty Images.

Italy

Another legacy country in the top 5 is Italy, which had 19.3 GW of solar capacity at the end of 2016. But it installed just 373 MW last year. 

Italy peaked as a solar installer in 2011 with 9.3 GW, when it led the world in solar installations. As in Germany, generous feed-in tariffs caused a rush of solar installations, and the subsidy was quickly shut off and hasn't been replaced with a mechanism to drive any meaningful level of solar installations. Still, Italy gets 7.3% of its electricity from the sun, which is more than China (1.6%), Japan (4.9%), Germany (7%), or the United States (1.3%). In a country as small as Italy, even a single year of the solar boom can change a country's energy mix forever. 

Utility scale solar installation with trees in the background.

Image source: Getty Images.

Everything is changing in 2017

By the end of 2017, this list of top solar countries could look very different. Namely, India is charging up the list, expecting to install at least 10 GW to add to 9 GW it had at the end of 2016. GTM Research expects the U.S. to install 12.6 GW of additional solar, ending the year with around 53 GW of capacity, probably topping Germany and Japan for the No. 2 spot. 

France, the U.K., and Australia have also put favorable solar policies in place and are benefiting from cost-competitive energy from the sun. Any of those three may crack the top five countries for solar in the next few years as legacy power players bow out to upstart solar countries with abundant solar resources.

Long-term, the global trajectory for solar energy is clear. We'll be getting more and more electricity from the sun in the coming years, and that's good for solar installers, manufacturers, and the clean-energy future in general.  

Travis Hoium owns shares of First Solar and SunPower. The Motley Fool recommends First Solar. The Motley Fool has a disclosure policy.

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Stocks Mentioned

First Solar, Inc. Stock Quote
First Solar, Inc.
FSLR
$117.97 (2.95%) $3.38
SunPower Corporation Stock Quote
SunPower Corporation
SPWR
$26.62 (3.62%) $0.93
Canadian Solar Inc. Stock Quote
Canadian Solar Inc.
CSIQ
$41.90 (2.32%) $0.95

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