AGRIVOLTAICS MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Agrivoltaics Market Size and Trends

The Agrivoltaics Market is estimated to be valued at USD 4.34 Bn in 2024 and is expected to reach USD 7.61 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 8.3% from 2024 to 2031.

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The growing need for dual use of land for energy production and agriculture is expected to drive the demand for agrivoltaics. Further, agrivoltaic systems help increase yield for certain crops by providing partial shade and protecting crops from excessive heat. They also improve water use efficiency as solar panels provide shade and influence the microclimate beneath them. Additionally, growing emphasis on sustainability and development of agro-based economies are anticipated to provide opportunities for the market. However, high initial investment and limited technical know-how may hamper the growth of the agrivoltaics market during the forecast period.

Promotion of sustainable farming practices

Rising global temperatures and changing weather patterns have made conventional farming more challenging in many parts of the world. Farmers are struggling with increased occurrences of droughts, floods, and other climate-related disruptions which damage crops and reduce farm yields. At the same time, the agricultural sector remains a significant contributor to greenhouse gas emissions that cause global warming. There is a growing need to adopt renewable energy-powered farming techniques that are less dependent on climate variations and are more environmentally sustainable.

Agrivoltaic systems which involve setting up solar panels above crop fields have emerged as a promising solution. The partial shading from solar panels creates the ideal microclimate for many crops to grow by reducing evapotranspiration and moderating temperature fluctuations. It allows more efficient use of available land resource for combined power and food production. Farmers can supplement their income from solar power sales while continuing farming under the panels. The dual use of land helps optimize land utilization and preserves agricultural areas that otherwise would be converted to large-scale solar installations. Many governments around the world are promoting agrivoltaics to make agriculture greener. Farmers are incentivized to install agrivoltaic systems through financial subsidies and policy support in order to optimize resource use as well as generate renewable energy. As more studies demonstrate the agronomic and climate adaptation benefits of this practice, agrivoltaics is likely to grow in popularity among farmers.

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Maximizing Self-consumption of Solar Power

A key driver for the adoption of agrivoltaic systems by farmers and landowners is its ability to maximize self-consumption of on-site solar power generation. Farms and agricultural landholding areas are often located in remote regions with poor access to central electricity grids. Transporting power over long distances results in transmission and distribution losses, making grid electricity costly for rural consumers. Agrivoltaic systems help farmers and rural establishments meet a major part of their energy demand through direct self-consumption of solar energy, reducing dependence on expensive diesel generation or unreliable grid power. Any surplus power generated can be fed into the grid or used for local community needs or agricultural processing activities like cold storage, packaging, etc. This significantly enhances the economic feasibility of investments in solar projects for agricultural applications compared to regular ground-mounted installations or rooftop projects with low self-consumption.