SOLAR PV PANELS MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Solar PV Panels Market Size and Trends

The Solar PV Panels Market is estimated to be valued at USD 183.14 Bn in 2024 and is expected to reach USD 305.81 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 7.6% from 2024 to 2031.

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The increasing demand for renewable energy due to growing environmental concerns globally is driving the adoption of solar panels. The declining costs of solar panels along with supportive government policies in the form of tax rebates and net metering is further boosting the market growth. In addition, the rising adoption of solar+storage technology and increasing usage of solar panels for residential and non-residential purposes is expected to propel the solar PV panels market growth. However, the intermittent nature of solar may hamper the market growth to some extent. The installation of BIPV (building integrated photovoltaics) is also attracting many end-users.

Growing environmental awareness

The growing awareness about climate change and its detrimental impact on the environment has been a key driver for the adoption of solar PV panels globally. There is a widespread recognition that over-dependence on fossil fuels is unsustainable in the long run and is leading to rise in global temperatures. More and more people are realizing how their electricity consumption patterns are contributing to carbon footprint. This has motivated homeowners, businesses, and industries to look for clean and green sources of energy that can reduce their reliance on electricity grids primarily powered by coal and natural gas.

Solar PV systems provide a decentralized way to harness renewable power from sun which does not add toxic emissions into the air. As the world is advancing towards a low carbon economy, countries have also introduced various policy measures like attractive net-metering policies, tax incentives, and rebates to encourage their citizens to install solar systems. This has significantly reduced the installation and setup costs of solar panels over time. Additionally, improving technologies have also made the panels more efficient in converting sunlight into electricity. All these factors combined with easy financing options have simplified the process of switching to solar energy. Many people feel responsible for future generations to transition to eco-friendly energy sources. The market is undoubtedly driven by the growing prioritization of sustainability and minimizing environmental footprint.

Market Concentration and Competitive Landscape

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Grid parity of Solar PV systems

Another crucial driver has been the cost competitiveness solar PV systems have achieved against utility rates in many parts of the world, often referred to as 'grid parity'. Earlier, the higher upfront investment associated with solar panels was a deterrent for widespread adoption. However, over the years, there has been a steep decline in the prices of solar modules and their related components like inverters due to economies of scale and technological innovation. At the same time, conventional power tariffs in several countries have witnessed upward revisions partly on account of rising fuel costs. This has substantially narrowed the price gap between grid and solar power.

In many sunny regions today, solar generated electricity during daylight hours is less expensive than what is purchased from the utilities. This has made solar an attractive proposition even for commercial and industrial customers looking to mitigate power costs. Achieving grid parity removes the financial hurdle and strongly appeals to the rational economic interests of prosumers. It empowers more customers to meet all or a significant portion of their annual energy demand through rooftop solar and gain long term savings.

Key Takeaways from Analyst:

The solar PV panels market continues to be driven by supportive government policies and regulations that promote renewable energy adoption. Many countries have introduced subsidies, tax credits, and net metering policies to encourage commercial and residential installation of solar systems. This has significantly boosted demand over the last few years.

The market continues to face challenges due to inconsistent government policies and the intermittent nature of solar power, which necessitates the use of batteries or backup from fossil fuel plants. Additionally, limited technological advancements have hindered further reductions in balance of system costs, including those for mounting systems, wiring, and inverters.

The residential sector is expected to dominate the market given higher installation activity of small-scale systems among homeowners seeking to reduce electricity bills. Among regions, Asia Pacific currently captures over half of global demand led by China, Japan and India while widespread pro-solar policies are propelling rapid growth in Europe and the U.S.

Market Challenges: High initial installation costs

The high initial installation costs involved in setting up solar PV panels is considerably restraining the growth of the global solar PV panels market. Solar PV systems require substantial capital investment for purchasing the panels, inverters, mounting structures, wiring and other electrical components. These upfront costs associated with installing commercial or residential solar PV arrays can range anywhere between US$15,000 to US$30,000 depending on the size and capacity of the system. The payback period on this investment is also generally long, ranging from 5-10 years even after considering incentives and net metering policies.

Market Opportunities: Growing investment in renewable energy

The growing investment and demand for renewable energy sources across the globe presents a huge opportunity for the global solar PV panels market. Many countries have announced ambitious targets to increase the share of solar and other renewable energy in their overall energy mix in the coming years to reduce carbon emissions. For instance, according to International Renewable Energy Agency (IRENA), over 175 GW of new solar PV capacity was added globally in 2021 alone. IRENA estimates that solar PV installations must rise by over 60% annually till 2030 to limit global warming below 1.5°C.

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Insights by grid type:  The Growth of On Grid Segment of Solar PV Panels Market Owing to Increased Government Support and Falling Equipment Prices

The on grid segment contributes the 83.5% share of the solar PV panels market in 2024, due to strong government support through various subsidy schemes and falling equipment prices. Many countries around the world are focusing on renewable sources of energy to reduce carbon emissions. Governments offer incentives such as feed-in tariffs, tax credits, and net metering programs to encourage homeowners and businesses to install solar panels connected to the main power grid. This has boosted demand for on grid solar systems. Additionally, the prices of solar panels and other solar power generation equipment have reduced significantly over the past decade due to mass production and technological advancements. The low cost of equipment along with attractive subsidy schemes make solar power generation economically viable for both residential and commercial properties connected to the main electric utility grid.

Insights by technology: The Rising Popularity of Thin Film Technology in Solar PV Panels Market Owing to Lightweight and Flexibility

Within the technology segment, thin film captures the 35.4% share in 2024, due to advantages such as lightweight design and flexible form factors. Thin film utilizes very thin layers of photovoltaic material, ranging from a few micrometers to a few hundred micrometers in thickness. This makes thin film panels much lighter compared to traditional silicon-based panels. They can also be fabricated into flexible and bendable forms. The flexibility enables novel applications such as building integrated photovoltaics and solar shingles. The lightweight and flexible attributes, along with steadily improving conversion efficiencies, are boosting the adoption of thin film technologies in both on and off grid solar power solutions.

Insights by application: Industrial Sector Drives the Application Segment of Solar PV Panels Market Owing to Scale of Operations and Focus on Energy Management

In terms of application, the industrial segment expected to hold as industrial complexes have massive scale of operations and focus heavily on energy optimization with 34. 4% share in 2024. Large industrial plants such as manufacturing facilities and construction sites have massive power requirements on a daily basis. Even a small improvement in energy efficiency through solar power infrastructure can result in huge cost savings for their scale of operations. Industries are also under pressure to reduce carbon footprint and opt for renewable sources of energy. The ability to fulfill a major portion of daytime energy needs through solar is driving many industrial plants to invest in large ground-mounted and rooftop solar installations. Consequently, the industrial segment has emerged as the leading adopter of solar PV panels for power generation across different applications.

Regional Insights

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The North America has firmly established itself as the dominant region in the global solar PV panels market with 32.2% share in 2024. With its large solar installations and supportive policies, the U.S. market has seen tremendous growth over the past decade. Several U.S. states such as California, Texas, and Florida have ambitious renewable energy targets and net metering regulations in place which has steadily increased the demand for solar panels from both commercial and residential customers. Major solar panel manufacturers have also established production facilities in the U.S. to cater to the growing local demand. Moreover, the U.S. imposition of anti-dumping and countervailing duties on Chinese solar panels in the past has strengthened the domestic solar manufacturing industry in the country.

The Asia Pacific region has emerged as the fastest growing market for solar PV panels globally. Driven by strong government incentives and feed-in-tariff programs for renewable energy in many countries, the APAC solar market has attracted significant foreign investments. Countries like China, Japan, India, and South Korea have become major production and export hubs for solar products. Advantages such as readily available raw materials, inexpensive manufacturing capabilities, and proximity to emerging solar markets have enabled solar panel suppliers in APAC to rapidly scale up production and offer competitive pricing. India, in particular, stands out with ambitious renewable capacity targets of developing 280 GW of solar power by 2035. Several states have renewable purchase obligations which are stimulating solar rooftop installations across commercial and residential segments.

Market Report Scope

Key Developments

• In January 2024, Narendra Modi, the prime minister of India launched new rooftop solar power scheme
• In April 2024, India’s Ministry of New and Renewable Energy (MNRE) published its latest figures for clean power capacity additions in the country, which show that the country added 15GW of new solar capacity in the 12 months to the end of March 2024
• In May 2023, state-owned SJVN Ltd. secured a 100 MW solar power project worth approximately USD 73.24 million from Rajasthan Urja Vikas Nigam Ltd. (RUVNL)
• In 2022, Soleos launched new generation solar panel product with unique features and robust performance

*Definition: Solar PV panels, also known as solar panels, are panels designed to absorb sunlight as a source of energy for generating electricity or heating. Composed of photovoltaic solar cells, solar PV panels convert sunlight directly into electricity via the photovoltaic effect. The solar PV panels market provides these panels for residential, commercial, and utility-scale solar installations to harness renewable energy from the sun. The panels come in various sizes and efficiencies to support different customers' needs for harnessing solar power.

Market Segmentation

• Grid Type Insights (Revenue, USD Bn, 2019 - 2031)
  • On Grid
  • Off Grid
•  Technology Insights (Revenue, USD Bn, 2019 - 2031)
  • Thin Film
  • Crystalline Silicon
  • Others
•  Application Insights (Revenue, USD Bn, 2019 - 2031)
  • Residential
  • Commercial
  • Industrial
• Regional Insights (Revenue, USD Bn, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • GCC Countries
    • Israel
    • Rest of Middle East & Africa
• Key Players Insights
  • JinkoSolar
  • JA Solar
  • Trina Solar
  • LONGi Solar
  • Canadian Solar
  • Hanwha Q-CELLS
  • Risen Energy
  • GCL-SI
  • First Solar
  • SunPower Corporation
  • Adani Solar
  • Saatvik Green Energy Pvt. Ltd.
  • Adani Green
  • Waaree Energies
  • Tata Power Solar Systems
  • Vikram Solar
  • Loom Solar
  • Renewsys Solar