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The global solar photovoltaic (PV) market size was USD 162.65 billion in 2019 and is projected to reach USD 185.62 billion by 2027, exhibiting a CAGR of 5.3% during the forecast period.
Solar photovoltaic energy or PV solar energy converts sunlight into electricity, using a technology based on the photovoltaic effect. Solar power is the most reliable and abundant renewable energy source available on earth. It proves to be a feasible alternative to fossil fuels that are presently accountable for polluting the environment and contributing to global warming. The United States (U.S.), China, Germany, and Spain are the richest solar resources in the world. The high demand for renewable energy and the declining unit cost of silicon-based solar cells are the major factors positively influencing the solar PV market. According to SolarPower Europe, in 2019, a total of 116.9 GW of new solar PV projects were installed globally, representing a 13% growth rate over the 103.7 GW additions the year before and marking a new solar record.
COVID-19 Pandemic: Huge Backlog for Fulfilling Orders to Impact Growth Severely
The COVID-19 pandemic struck the world economy very hard. Its impact on several business sectors, such as manufacturing, aviation, hospitality, and others, has been explicit and unprecedented. Lockdowns & restrictions in the wake of the pandemic have affected economies severely across the globe, disrupting supply chains, delaying projects, and creating a shortage of labor.
In several countries, the renewable sector is mainly dependent on imports from other regions, mainly from China. As per the Government of India, around 80% of solar cells and modules in India are imported from China, along with other equipment such as inverters, prefabricated structures, and raw materials.
Solar project developers in India are worried about project delays due to the slowdown of manufacturing in China, followed by lockdown in India. Also, major solar equipment suppliers have observed production delays due to COVID-19, thereby causing a huge backlog for fulfilling orders. Recently, in July 2020, the Seychelles government confirmed that the construction of a floating solar PV power plant will be delayed due to concerns of the COVID-19 pandemic.
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Surging Demand for Electricity is a Prominent Trend
Power consumption in Asia Pacific and other regions has increased considerably over the last few years. The strong growth of the economy, flourishing manufacturing sector, and the rising population have led to the increasing consumption of power. Furthermore, in emerging economies, owing to the expansion of countries and the improvement in the standards of living, there is a greater demand for energy consumption.
As the demand for electricity surges, most counties worldwide are increasing their power generation capacity by expanding the existing ones or installing new plants. Due to stringent government regulations regarding carbon emissions, companies are rapidly inclining towards the use of renewable energy sources for electricity generation, particularly towards solar energy and wind power. This is expected to push the solar photovoltaic (PV) market growth during the forecast period.
Increasing Number of Off-grid Areas across the Globe to Propel Growth
Off-grid areas have highly limited or no access to grid-connected electricity. These areas are dependent on secondary sources of power, such as solar energy. Most regions across the globe have large-sized off-grid areas that do not have access to grid-connected electricity. According to the World Energy Outlook, around 1 billion people worldwide are still living without electricity. Most countries of Sub-Saharan Africa and Latin America have a sluggish electrification rate and poor infrastructure to meet the rising power demand in these countries.
In Sub-Saharan Africa, almost 600 million people do not have access to electricity. In this region, the urban electrification rate is 60% and the rural electrification rate is 14%. This encourages governments of Sub-Saharan countries to use solar energy to meet the power requirement in rural and urban areas. According to the Bloomberg New Energy Finance report, around 1.2 GW of solar PV projects is expected to come online in Sub-Saharan countries by the end of 2021. Hence, the growing off-grid areas worldwide are expected to boost the global market for solar photovoltaic (PV) during the forecast period.
Rising Investment in Solar Energy to Drive Growth
Several environmental protection regulations worldwide are forcing the power generation enterprises to shift to cleaner and eco-friendly energy resources. Major countries around the world are hugely focusing on increasing renewable energy power generation to reduce their dependence on conventional power generation through fossil fuels. Solar energy is one of the key renewable energy sources with the ability to meet many of the challenges that the world is facing.
According to SolarPower Europe, the cumulative installed capacity of solar rose to more than 630 GW (Gigawatt), as the world installed 116.9 GW of new solar PV projects in 2019. With 67.1 GW of installation, Asia Pacific accounted for 55% of all new solar PV installations. Hence, such remarkable yearly capacity addition of solar power is certainly set to boost the solar PV market globally.
Land Use Constraints to Hinder the Global Market Growth
For utility-scale solar power generation projects, a huge area of land is needed for efficient power generation. The selection of land for solar power generation can be constrained by environmental or technical reasons in many areas, such as the availability of solar radiation. The deployment of solar systems on a large land can impact the natural areas and biodiversity due to the area of land occupied by the power plant itself.
For example, it is difficult for solar PV operations to be deployed in built-up areas, agricultural land, forest, wetlands, and water bodies due to low accessibility and instability of land. Furthermore, large-scale solar power plants need to consider land factors such as transportation networks, distance to the electricity grid, and implications on near residential areas. These factors can hamper the growth of the solar panels market.
Monocrystalline Silicon Segment is Expected to Grow at the Fastest Pace
Based on technology, the market is segmented into monocrystalline silicon, thin-film, polycrystalline silicon, and others. The monocrystalline silicon segment is expected to grow at the fastest pace during the forecast period. This type of solar panels are more prevalent in solar rooftop systems and are commonly used for large-scale installations that could be industrial, commercial, or residential. Several manufacturers across the globe are shifting their focus from multi-crystalline to monocrystalline solar cells owing to their high efficiency, compact design, and durability.
The thin-film technology segment is expected to contribute significantly during the forecast period owing to inexpensive thin-film manufacturing. The others segment includes cadmium telluride (CdTe), and amorphous silicon (A-Si) among others.
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Ground-mounted Segment Dominated in 2019 Backed by Usage in Commercial Purposes
Based on the installation, the solar PV market is segmented into ground-mounted, rooftop, and others. The ground-mounted segment held a dominant share of the market in 2019 as this type of solar PV is mainly used for commercial and utility purposes. Ground-mounted solar for utility or commercial projects are cost-effective owing to the economies of scale, number of installation, and operation and maintenance efficiencies. On the other hand, rooftop solar is primarily used in small residential projects. The others segment includes floating solar projects. In Japan, the adoption of floating solar panels is high due to the less availability of land in the country.
On-grid Segment Held a Dominant Share of the Market in 2019
Based on the grid type, the market is segmented into on-grid and off-grid. The on-grid segment held a dominant solar photovoltaic market share of the market in 2019 owing to the growing number of utility-scale projects. An on-grid solar PV system is connected to a utility grid that generates electricity using solar power. These systems can range from small residential units to large utility-scale solar power stations. The adoption of off-grid solar PV systems in developing and rural areas is increasing continuously. According to the statistical data from the World Bank, in 2018, only 47% of the population in Sub-Saharan Africa had access to electricity.
Utility Segment to Grow Rapidly Stoked by Rising Number of Utility-scale Solar Projects
Based on the application, the market is segmented into residential, non-residential, and utility. The utility segment held a dominant share of the market in 2019. Several ongoing utility-scale solar projects are in the pipeline across the globe. In May 2020, Amazon announced five new utility-scale solar projects to power the global operations in China, Australia, and the U.S. The increasing number of residential construction projects and the growing public awareness regarding the usage of renewable and efficient energy sources are estimated to drive the residential segment during the forecast period.
The non-residential segment is expected to contribute significantly during the forecast period owing to reduced capital cost and improved efficiency of solar PV modules.
Asia Pacific Solar Photovoltaic (PV) Market Size, 2016-2027 (USD Billion)
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Asia Pacific is anticipated to lead the global market for solar photovoltaic over the forecast period. As per SolarPower Europe, in 2019, the region installed more than 67 GW of solar projects. High solar irradiance levels and low manufacturing cost of components are the key factors driving the growth of the market. High carbon emission reduction targets by several countries, including China and India, coupled with the surging electricity demand, will further fuel the market growth. In 2019, China installed a large number of solar projects with a total capacity of 30.1 GW. The country remains the world’s largest market by far, adding over twice as much solar power capacity as the European countries.
In terms of solar PV installations, Europe is the second-largest. The European Union installed 16.7 GW of solar PV in 2019. The rapidly increasing installation of solar farms and encouraging regulations are the key factors driving the growth of the market in Europe. The EU Renewable Energy Directive stated its plan for the promotion & production of sustainable energy sources across the nation. This directive has levied targets to attain 20% renewable adoption in the overall energy mix. Such factors would accelerate the growth of the market in this region. According to SolarPower Europe, the Middle East and Africa installed 6.8 GW of new solar PV capacity in 2019, which is over twice as much as the 3.1 GW the year before.
Key Players Focus on Increasing Their Production Capacity by Introducing New Plants
The global solar photovoltaic (PV) market is fragmented owing to the presence of a large number of companies in developed and developing countries. Currently, Canadian Solar Inc., First Solar, and Trina Solar are leading the market, accounting for a dominant share in 2019. These companies are expanding their solar capacities by inducing new plants or expanding the existing ones.
In July 2020, Sonnedix, the global independent solar power producer (IPP), enhanced its operating capacity in Italy by 8.2 MW by acquiring two portfolios. This includes a portfolio of 6 operating plants acquired from Silver Ridge Italia with a combined capacity of 5.2 MW. Another portfolio of 3 operating plants was acquired from Melfin (Melchioni Group) with a combined capacity of 3 MW.
An Infographic Representation of Solar PV Market
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The solar PV market research report includes a detailed solar industry analysis and focuses on key aspects such as leading companies, technology, installation, grid type, and leading applications of the product. Besides this, the report offers insights into the solar photovoltaic (PV) market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several drivers that have contributed to the growth of the advanced market over recent years.
Value (USD Billion) & Volume (GW)
By Grid Type
Fortune Business Insights says that the global market size for solar photovoltaic (PV) was USD 162.65 billion in 2019.
In 2019, the Asia Pacific market value stood at USD 74.57 billion.
The global market is projected to grow at a CAGR of 5.3% in the forecast period.
The monocrystalline silicon technology segment is expected to be the leading segment in this market.
The global industry size is anticipated to reach USD 185.62 billion by 2027, growing at a substantial CAGR of 5.3% during the forecast period (2020 -2027).
Supportive government policies and regulations and several renewable energy targets are the key factors driving the market.
Asia Pacific dominated the market in terms of share in 2019.
Canadian Solar Inc., First Solar, Yingli Solar, and Trina Solar are the major players in the global market.
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