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The global solar power market size was USD 170.55 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with solar power witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, this market will exhibit a stagnant growth of 4.18% in 2020 as compared to the average year-on-year growth during 2017-2019. The market is expected to grow from USD 184.03 billion in 2021 to USD 293.18 billion in 2028 at a CAGR of 6.9% in the 2021-2028 period. The sudden rise in CAGR is attributable to this market’s demand and growth returning to pre-pandemic levels once the pandemic is over.
Solar power is the cleanest and most plentiful renewable energy source present on this planet. Countries such as China, Germany, Spain, and the United States (U.S.) have some of the largest solar resources all over the world. There are two key ways to harness solar energy: photovoltaic (PV) and concentrated solar power (CSP). Developed and developing countries across the globe are strongly promoting solar as an alternative to conventional energy sources and are hence positively contributing to the market growth.
Disruptions in Supply Chains amid COVID-19 to Heavily Affect Solar Projects
Lockdowns in most of the countries globally due to the COVID-19 have made economies squelch, disturbing supply chains, and suspending most of the projects. In India, 80% of solar products such as inverters are imported from China. In India, most of the solar projects are getting delayed due to lockdown and shortage of equipment, resulting in a huge backlog for accomplishing orders. For example, in July 2020, the Government of Seychelles delayed their floating solar photovoltaic power plant construction owing to the pandemic.
Furthermore, in India electricity demand is seen falling during this pandemic. This will also have negative impacts on the solar industry. Recently, Fotowatio Renewable Ventures, the Arabian clean and renewable energy solutions provider announced plans to withdraw its ownership from the Indian solar space.
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Increasing Demand for Electricity Worldwide to Drive Market Trends
Global electricity demand is increased considerably owing to economic development and population expansion. Improving standards of living and infrastructure development are creating a huge demand for electricity generation. For example, as per Enerdata, China’s electricity demand was increased by 4.5% in 2019 compared to 2018. To meet the growing demand most of the countries are installing new solar plants or enhancing the capacity of the existing ones. This is expected to drive the solar power market growth during the forecast period.
Growing Investments in Solar Energy to Fuel the Market
Due to environmental regulations, several companies are installing renewable energy plants. Several countries are also focused on eco-friendly power generation solutions to reduce their carbon emission. Solar energy is one of the low-cost renewable energy solutions. Hence numerous countries are investing heavily in solar energy. In 2019, Asia Pacific installed more than 67 GW of new solar projects. Hence, such a remarkable yearly installation of solar capacity is favoring the global market growth.
Supportive Government Initiatives and Policies to Propel the Market
Supportive government policies play a key role in renewable energy installation. In numerous countries like U.S., China, and EU countries, policies like FiT, investment tax credits, and capital subsidies are key policies boosting solar installation. For example, in May 2019, China’s National Development and Reform Commission (NDRC) declared solar FIT payments for large-scale projects. Commercial and industrial solar photovoltaic projects originated for individual consumption and extra power sent back into the grid is subject to a FiT of RMB 0.10/kWh.
Land Use Constraints to Hinder Market Growth
Large solar projects like utility-scale or large industrial-scale plants require huge land. Furthermore, the land selection is also constrained by any factors such as the availability of solar radiation. It is problematic for solar projects to be installed in agricultural or forest land owing to low accessibility and instability of land. Transportation of equipment and electric grid distance are the factors also affecting the land selection process.
Solar PV Technology Segment Held the Major Share of the Market in 2020
Based on technology, the global solar power market is bifurcated into solar photovoltaic (PV) and concentrated solar power (CSP). Solar PV system is further divided into mono-si, thin-film, multi-si, and others; and CSP is divided into the parabolic trough, power tower, and linear fresnel. The solar PV segment held a dominant share of the global market in 2020. Around 120 GW of new solar PV projects were installed in 2020.
Globally 120 GW of solar PV projects were installed in 2020. Declining the cost of PV technologies along with improved panel efficiency and energy yield fueling the adoption of solar PV technology. In solar PV, mono-si technology expected to gain more traction during the forecast period owing to its high efficiency, compact design, and durability.
In 2019, the total installed capacity of concentrated solar thermal power was 6.2 GW, with more than 600 MW of capacity coming online. Within this segment, the parabolic trough sub-segment is expected to grow at the highest pace during the forecast period. It is one of the most commercialized CSP technologies. This is because the segment has applications in all end-use industries.
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Utility Segment to Grow at the Highest Annual Growth Rate
Based on application, the global market is divided into residential, non-residential, and utility. Among these, the utility segment held a leading solar power market share in the year 2020. Around 60 GW of new utility-scale solar PV projects were installed in 2020 and a large number of projects are in the pipeline. In March 2021, Masdar signed an MoU with the Ethiopian government to develop 500MW of solar plants in the country.
Growing adoption of rooftop solar and customer awareness about the usage of eco-friendly sources are projected to boost the residential segment’s growth between 2021 and 2028.
Asia Pacific Solar Power Market Size, 2020 (USD Billion)
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Asia Pacific held the dominant share of the global market and is projected to grow at the highest pace over the forecast period. High electricity demand, improved living standards and suitable solar irradiance are some of the key factors fueling the growth of the regional market. In 2020, China alone installed around 48 GW of solar projects.
Europe was the other major market for solar power in 2020. The European Union (EU) countries installed around 18.2 GW of solar PV projects in 2020. Supportive regulations, renewable energy targets, and a growing number of solar farms are the key factors fueling the growth of the market. In North America, the U.S installed 19 GW of solar projects.
The Middle East & Africa region also contributed significantly during the forecast period. The region installed nearly 1.5 GW of solar PV projects in 2020 and several solar projects are under construction in the region.
Key Participants to Concentrate on Increasing Production Capacity
The solar power market is fragmented on account of a strong product portfolio and a significant distribution network in developed as well as developing countries. Presently, Canadian Solar Inc., Trina Solar, and First Solar dominate the market.
The companies are increasing their production capabilities by installing new plants or focusing on expanding the existing ones. For example, in January 2021, Sterling and Wilson Solar Limited (SWSL) successfully installed the 25 MW solar project in Oman. In July 2020, Sonnedixhas completed the acquisition of 9 solar operating plants with a combined capacity of 8.2 MW.
An Infographic Representation of Solar Power Market
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The market research report includes a detailed analysis of the solar energy market and focuses on key aspects, such as leading companies, solar technologies, and leading applications of solar. Besides this, the report offers insights into the current market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the advanced market over recent years.
Value (USD Billion) & Volume (MW)
By Technology, Application, and Region
Fortune Business Insights says that the global market size was USD 170.55 billion in 2020.
In 2020, the Asia Pacific market value stood at USD 80.06 billion.
The global market is projected to grow at a CAGR of 6.9% in the forecasted period.
The solar PV segment is expected to be the leading segment in this market during the forecast period.
The global market size is anticipated to reach USD 293.18 billion by 2028, growing at a moderate CAGR of 6.9% during the forecast period (2021-2028).
Supportive government policies and regulations and the race to attain renewable energy targets are major factors driving the growth of the market.
Asia Pacific region dominated the market share in 2020.
Canadian Solar Inc., First Solar, Yingli Solar, and Trina Solar are the major players in the global market.
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