End of 2025 BloombergNEF (BNEF) projected that 2026 would be the first year of decline in solar panel installation in twenty years. From the presentation at SNEC 2026 in Shanghai, with Chinese capacity installations at this point slowing down significantly compared to the previous year, it seems that this projection could become reality.
BNEF solar analyst Jenny Chase examined why the ongoing wars are having a limited effect on solar energy, and what could pull the solar panel industry out of the doldrums.
Source: China National Energy Association via Bloomberg
Although there are several energy wars going on (Ukraine and the Middle East), solar energy is largely affected indirectly. Both global events have serious consequences for oil, which represents only 2.6% of total electricity generation, according to the International Energy Agency. However, the war in Ukraine began with a conflict over natural gas supplies, and the world’s largest liquefied natural gas export facility, in Qatar, has been disabled by Iranian missiles.
Since the beginning of the events in the Middle East, after an initial increase in global liquefied natural gas prices, the price has returned to the 2025 average price. In the US, the price rose briefly, but then returned to normal. However, the own pricing of solar energy has the greatest effect on the use of solar energy.
All over the world – China, France, California — Solar energy installations create negative prices and curtailments. Across Europe, zero and negative price hours rose in seven countries in 2025, per BNEF. Spain recorded 800 hours of zero or negative prices in 2025, and set a new quarterly record of 397 hours of negative prices in the first quarter of 2026 – already approaching the annual total of 555 negative price hours in 2025, and more than a third of the approximately 1,080 daytime hours in the three-month period.
With this reality in mind, BNEF’s question was: what will be the next step in solar energy deployment? The answer focused on energy storage.
BNEF predicts that after the record capacity deployment of 112 GW / 307 GWh in 2025, which was a jump of 48% compared to 2024, a 41% increase to 158 GW / 459 GWh can be expected in 2026.
Energy storage shows that can halt the downward price trend leading to ‘free’ solar energy during the day in California. Still, Chase noted that the 459 GWh of batteries that will be added in 2026 can only store about 43 minutes of peak output from the 640 GW of new solar power expected that same year.
An economic analysis by BNEF suggests that solar and storage have aggregate deployment limits due to low coal and gas prices. These BNEF economic models suggest that solar energy will provide only 30% of global electricity production by 2050, with gas accounting for around 17% and coal falling to roughly 10%.
Chase expects actual deployment of solar and energy storage to exceed BNEF models, as deployment of both technologies has historically exceeded forecasts.
Although data centers are in the news a lot, they are not that important when you look at all the other ways electricity is used worldwide. According to BNEF, data centers used 501 TWh of electricity in 2025, which is expected to more than double to 1,114 TWh by 2035 – 3.6% of global electricity production.
The increase of approximately 613 TWh would require between 250 GW and 450 GW of solar capacity, depending on where the solar energy is deployed. At this year’s rate of 640 GW, solar deployment would increase by 4% to 7% over the next decade.
Chase also noted that there was an “X factor” that could drive demand: electric vehicles, which are booming due to war. In Europe, demand for electric vehicles rose 24% year-on-year in April, according to BNEF.
But even EVs can only carry solar energy so far: BNEFs Electric vehicle prospects According to projects, an all-electric global road fleet would require around 8,313 TWh of electricity by 2050 under the Net Zero Scenario – roughly 80% more than the 4,627 TWh estimated by data centers that year.
BNEF sees a path for much greater growth and predicts roughly 900% growth on the recently achieved cumulative capacity of 3 TW. BNEF said that in the 2050 Net Zero Scenario, cumulative installed solar capacity could reach 30.8 TW.
