Solar power could outstrip fossil fuels, other renewables and nuclear to be the biggest source of electricity by mid-century, the International Energy Agency has said.

Solar technologies could generate more than a quarter of the world's electricity, with 16 per cent from photovoltaic (PV) panels and a further 11 per cent from solar thermal electricity systems, which collect the sun's rays to heat fluids that drive electricity turbines.

The two technologies could save six billion tonnes of carbon dioxide emissions a year by 2050, more than all of the emissions currently generated by the US energy system, or almost all of the emissions of the world's transport sector, the IEA said.

But to achieve the large scale deployment of solar power, governments need to set clear, credible and consistent signals about solar, including long term targets for PV deployment and predictable incentives, the IEA said.

A "roadmap" report from the IEA on solar PV said that since 2010, the world has installed more of the technology than in the previous four decades, and that the price of PV systems had fallen by two-thirds in most markets in just six years.

A separate roadmap on solar thermal electricity (STE) said the systems had the benefit of being able to store thermal energy to produce electricity later, for example in the peak evening hours after the sun had set.

Deployment of STE systems was dwarfed by solar PV, with just four gigawatts installed worldwide, compared to 150 gigawatts of photovoltaic panels, but new markets were emerging in the Americas, Australia, China, India, Middle East and Africa.

IEA executive director Maria van der Hoeven said: "The rapid cost decrease of photovoltaic modules and systems in the last few years has opened new perspectives for using solar energy as a major source of electricity in coming years and decades.

"However, both technologies are very capital intensive: almost all expenditures are made upfront. Lowering the cost of capital is thus of primary importance..."