Global: WoodMac says 2026 solar stays strong, with US balcony PV and Abu Dhabi baseload hybrid in focus

Wood Mackenzie expects the global solar PV market to remain fundamentally strong in 2026, even after a difficult 2025 marked by policy and regulatory turbulence in several key regions. In a new report, the analyst highlights three themes it believes will shape 2026 and influence longer-term market direction: load growth as a demand engine for solar, the emergence of balcony/plug-in PV in the US, and Masdar/EWEC’s utility-scale solar-plus-storage “baseload” model in Abu Dhabi.

Headwinds in major markets, but growth drivers remain intact

WoodMac notes that the two largest national solar markets—China and the US—faced notable headwinds in 2025. In China, regulatory changes contributed to a sharp installation slowdown in the second half of the year. In the US, major shifts to federal incentives, permitting rules and other executive actions under the Trump administration introduced fresh uncertainty for renewables overall.

India is also flagged as a key market where tighter domestic content rules could weigh on growth in 2026. Even so, WoodMac argues solar remains one of the most important technologies for meeting rising electricity demand globally, and it points to both US balcony PV momentum and a large Middle East hybrid mega-project as developments to watch.

Load growth: data centres, electrification and industry keep solar relevant

Over the next five years, WoodMac expects electricity demand to rise materially, driven by data centres, electrified transport, and manufacturing hubs—all of which increase load and typically require fast-to-build capacity additions. In many regions, solar’s role comes down to cost competitiveness.

In Asia-Pacific, WoodMac expects solar to dominate new capacity additions, even though coal and gas still anchor bulk generation today. The report projects solar PV, wind and energy storage will make up about one-third of Asia’s power mix by 2030, up from less than 10% in 2020.

In the US, WoodMac describes a different mix of drivers: rapid load growth—especially from data centres—has created strong demand for new gas generation, but the firm still expects substantial solar expansion. It forecasts the US will add nearly as much solar capacity in 2026–2030 as the amount of gas capacity currently installed on the grid, despite the federal government’s preference for fossil generation.

WoodMac also estimates US solar will expand by 65%, increasing generation by roughly 232 GWh over the next four years, while gas expands by 21% (about 340 GWh).

US “balcony solar” could break out in 2026

A second 2026 signal is the potential rise of balcony/plug-in solar in the US. WoodMac points to Utah as the first state to approve portable solar generation devices up to 1.2 kW for homes (authorised last March). Since then, more than a dozen states have followed, with bipartisan support emerging around plug-in solar.

WoodMac frames plug-in PV as a lower-cost, faster-to-adopt way to reduce household bills than traditional rooftop solar—an angle that could strengthen as electricity demand and retail rates rise. The concept is already mature in Germany, where roughly 40% of registered solar installations in 2024 were balcony systems, and it is spreading across France, Italy and the Netherlands, where sub-1 kW “micro” systems are increasing.

The US has different housing and electrical characteristics (more detached homes, fewer balcony apartments, different standards), but WoodMac says many observers still expect rapid growth.

Abu Dhabi’s 5.2 GW hybrid: solar-plus-storage aimed at “always-on” power

WoodMac’s third highlight is the 5.2 GW/19 GWh solar-plus-storage project in Abu Dhabi, being developed by Masdar and the Emirates Water and Electricity Company (EWEC). The project is designed to provide 1 GW of round-the-clock, baseload-style output—a different objective from many hybrids that primarily use batteries for ancillary services.

WoodMac calls this approach a potential structural shift for Middle East hybrid development because it targets customers with steady, inflexible load profiles, such as data centres and AI hubs, and could reshape how renewables are contracted and integrated.

The report notes the project’s cost is exceptionally high—around US$6 billion, roughly six times the cost of a new gas plant—partly because the battery system represents 55–60% of total cost. That makes replication difficult, and WoodMac argues the business case depends on whether offtakers will pay a premium for firm, decarbonised power delivered quickly. The project is expected to enter operation in Q4 2027.