Report

Global solar energy market is projected to witness a CAGR of 7.48% during the forecast period 2024-2032, growing from USD 222.84 billion in 2024 to USD 396.70 billion in 2032. The market has experienced significant growth in recent years and is expected to maintain a strong pace of expansion in the coming years.
The global solar energy market is driven by multiple factors such as the declining price of solar photovoltaic, energy storage solutions, and rural electrification. The demand for clean energy sources is on the rise which drives the need for renewable energy sources such as solar to generate electricity to reduce greenhouse gas emissions. Solar energy has become a leading renewable energy source due to the effective reduction in solar photovoltaic module prices, which have dropped by nearly 90% over the past decade.
Moreover, government policies such as tax incentives, renewable portfolio standards, and international climate commitments are accelerating the solar industry adoption which is further propelling the market towards growth. Companies and consumers increasingly adopt solar energy technologies to meet sustainability goals and reduce electricity costs. In developing countries, solar is a pivotal tool for expanding electricity access, mainly in remote areas where grid infrastructure is limited, driving the demand for solar energy.
Furthermore, the recent advancement in energy storage technology is further strengthening the solar market by addressing intermittent solar power. As energy security concerns are rising globally, the demand for decentralized solar solutions is gaining traction in residential and commercial applications.
For instance, in September 2024, First Solar, Inc. inaugurated a new USD 1.1 billion fully vertically integrated thin-film solar manufacturing facility in Lawrence County, Alabama. The facility will add 3.5 gigawatts (GW) of solar manufacturing capacity in the United States. The facility aims to reduce the nation's dependence on foreign-made solar panels by producing American-made solar panels with components sourced from a domestic supply chain.
Technology Advancement in Solar Panel is Pushing the Market Towards Growth
Technological advancements are significantly driving the growth of the solar energy market, primarily through innovations in solar panel design and efficiency. The rise of bifacial solar panels, which capture sunlight from both sides. This design enhances energy production by utilizing reflected light from the ground and surrounding surfaces, making them increasingly vital in industry. This form of design can produce up to 10-30% more energy than traditional monofacial panels in terms of energy efficiency.
Additionally, the advancements in solar cell efficiency have propelled the market forward. Modern solar panels can achieve conversion efficiencies of more than 20-25%, a greater improvement from earlier generations of solar cells which could only convert about 10% of sunlight into electricity. The need for installation space is therefore reduced, further improving efficiency since more energy can be harnessed from less space.
Moreover, the incorporation of smart technologies within solar systems allows them to be remotely monitored and optimized which further improves the overall performance and reliability of the solar systems. These technological advancements make solar energy more viable and attractive which drives its adoption across various sectors.
For instance, in July 2024, LONGi announced an upgrade to its Hi-MO 7 bifacial solar module, enhancing its power output and efficiency. The new Hi-MO 7 module boasts a 620W power output and an increased efficiency of 23%. This upgraded model incorporates high-quality monocrystalline silicon wafers, optimized module encapsulation, advanced cell pastes, and intelligent automatic junction box welding technology. The upgrade reflects LONGi's ongoing dedication to advancing solar technology and meeting the growing demands of the renewable energy market.
Government Initiative to Support Growing Demand for Electricity Pushing the Market Growth
Globally, the consumption of energy is on the rise across the globe as an impact of rapid growth in industrialization, urbanization, and population. Developing regions such as Asia-Pacific and Africa have some of the highest rates of energy consumption, and the International Energy Agency (IEA) forecasts that global energy use could rise by nearly 30% by 2040. This rising demand for electricity increases the pressure on traditional fossil fuel sources, which are limited and have a negative impact on the environment. Therefore, the adoption of renewable energy sources, such as solar energy, is a viable option to meet this growing demand for electricity.
Moreover, government incentives and policies worldwide are creating a favorable environment for solar energy. Several governments are adopting policies that provide financial assistance in the form of solar installation subsidies, tax incentives, and even grants. For instance, in the United States of America, through an Investment Tax Credit or ITC, solar energy is experiencing massive investment due to an offset of about 30% of the installation costs.
In Europe, goals are ambitious due to EU Green Deal and RED II which sets the renewable energy capacity and reduces carbon emissions by up to 55% by the end of 2030. Such measures have also made it possible to raise significant financial resources for solar energy infrastructure enhanced by policies that guarantee production-based pay such as feed-in tariffs. More Chinese government also subsidizes many projects and provides low-cost loans, which have made China the leading nation in solar manufacturing and installations.
For instance, in April 2024, the United States government launched a transformative initiative aimed at expanding access to solar energy through the Solar for All program, which allocates USD 7 billion in grants. This initiative is designed to deliver residential solar projects to over 900,000 low-income and disadvantaged households across the United States. Announced on Earth Day, this program is part of the President's Investing in America agenda and is funded by the Inflation Reduction Act.
The Solar Photovoltaic Segment is Dominating the Market Share
The solar photovoltaic segment is the dominant segment in the global solar energy market, primarily due to its widespread applicability and technological advancements. Photovoltaics convert sunlight directly into electricity, making them a viable solution for various energy needs.
One of the key drivers of the PV segment's dominance is the increasing demand for renewable energy sources as countries aim to reduce their carbon footprints and transition away from fossil fuels. The affordability and efficiency of Photovoltaic PV systems have improved significantly over recent years, making them accessible for residential, commercial, and utility-scale applications.
Moreover, large-scale utility projects utilizing ground-mounted PV systems are rapidly expanding, particularly in regions with abundant sunlight like China, the United States, and India. This expansion is further supported by government incentives and policies designed to encourage the adoption of clean energy solutions.
As a result, photovoltaic technology continues to lead the solar energy market, providing a sustainable solution to meet the rising global electricity demand while contributing to environmental sustainability.
For instance, in September 2024, Oxford PV launched its next-generation perovskite tandem solar panels in the United States, marking a significant milestone in solar technology. These innovative 72-cell panels are designed with proprietary perovskite-on-silicon solar cells and could produce up to 20% more energy than standard silicon panels. The advancement will be utilized in utility-scale installation, reducing the levelized cost of electricity (LCOE) and allowing for more efficient land use by generating more electricity from the same area.
Asia-Pacific Dominates the Market Share of Solar Energy
Asia-Pacific is dominating the global solar energy market due to several factors. First and foremost, China leads the world in solar capacity, having installed an impressive amount of solar power, which significantly contributes to the region's overall dominance. The Chinese government has implemented strong policies and incentives that promote solar energy adoption, including subsidies and feed-in tariffs.
Additionally, India is rapidly expanding its solar infrastructure, driven by ambitious national goals and substantial investments in renewable energy. The country's initiatives aim to increase solar capacity significantly, reflecting a broader commitment to renewable energy.
Furthermore, the region benefits from a combination of rising energy demand due to urbanization and industrial growth, alongside decreasing costs of solar technology. This economic landscape encourages investment in solar projects, leading to greater capacity installations.
Moreover, the presence of innovative technologies, such as bifacial solar panels and energy storage solutions, further enhances the efficiency and appeal of solar energy in the Asia-Pacific market.
For instance, in October 2024, TotalEnergies ENEOS completed the installation of a 1.8 megawatt-peak (MWp) floating solar photovoltaic (PV) system project in Thailand with S. Kijchai Enterprise, a Thailand-based manufacturer of wood-based panels. This is the second PV system that TotalEnergies ENEOS has installed for the company within 4 years and the first floating solar PV system for TotalEnergies ENEOS in the Asia-Pacific. The solar PV system will generate approximately 2,650 megawatt-hours (MWh) of renewable electricity annually.
Future Market Scenario (2025 � 2032F)
� Innovations in solar technology, such as improved photovoltaic efficiency and the integration of energy storage systems, are making solar power more accessible and cost-effective. These advancements help address issues related to intermittent and enhance the overall reliability of solar energy.
� Several countries are implementing favorable policies, including tax credits, subsidies, and renewable energy targets, to encourage solar adoption.
� As populations grow and economies develop, the need for sustainable and reliable electricity sources is becoming more important which further fosters the adoption of solar energy.
� Growing awareness of climate change and environmental degradation is prompting a shift towards cleaner energy sources such as solar.
Key Players Landscape and Outlook
Continuous innovation characterizes the landscape of solar energy globally, as companies compete to outperform one another in terms of solar panel efficiency, storage solutions, and unique features. The market prognosis remains positive, owing to increased demand for integration with smart grids. Solar panel manufacturers are concerned with advancing the technologies of solar panels for improving energy efficiency, which will likely define the industry's future. Collaborations and developing technologies are projected to increase competition in this fast-paced market.
For instance, in November 2024, TotalEnergies ENEOS successfully completed the installation of a 2.2 megawatt-peak (MWp) solar rooftop project with PT. Perusahaan Industri Ceres (Ceres), is a leader in Indonesian chocolate confectionery products. The solar photovoltaic (PV) system generates approximately 3,250 megawatt-hours (MWh) of renewable electricity annually and will power about 9% of Ceres' manufacturing facility in Bandung, Indonesia. This newly installed PV system is expected to reduce the company's overall carbon footprint by approximately 2,600 tons of CO2 emissions, which is equivalent to taking around 560 cars off the road or planting over 39,000 trees.