Global Solar Energy Market is expected to grow at a CAGR of over 17% during 2020 - 2025. Factors such as rising concerns about climate change, the health effects of air pollution, energy security and energy access, along with volatile oil prices in recent times, have led to the need to produce and use an alternative, low-carbon technology options such as renewables, which in turn is expected to drive the market during the forecast period. Moreover, supportive government policies in different nations across the globe, declining solar photovoltaic (PV) modules, and associated system prices and increasing manufacturing capacity across the globe are likely to promulgate the market. However, with the reduced cost of natural gas that is leading to an improvement in the economics of power generation from gas-fired power plants, the growth of the market is likely to be hampered.
- - The solar photovoltaic (PV) segment is expected to be the largest and the fastest-growing segment during the forecast period, owing to its major share of more than 98% of the total solar energy installed capacity in 2019 and upcoming projects.
- - The intention of reducing the carbon footprint and decarbonization of the energy sector by various international agencies and regions, around 13% of solar generation share in the total energy mix by 2030 is expected, with more than 2000 GW of installed capacity, in turn, creating several opportunities for the market players.
- - Asia-Pacific is expected to be the largest market, with majority of the demand coming from the countries such as China, India, and others.
Key Market Trends
Solar Photovoltaic (PV) to Dominate the Market
- - Solar Photovoltaic (PV) has been one of the pioneering renewable technologies over the decades. This technology is entering a new era, and it is projected to account for the largest annual capacity additions for renewables, well above wind and hydro, for the coming years. The solar PV installed capacity reached 578.55 GW, representing an increase of over 20.3% compared to the previous year’s value.
- - According to IEA, the power generation from solar PV increased by 22% in 2019, to 720 TWh. Solar PV account for almost 3% of global electricity generation. Also, in 2019, PV generation surpassed bioenergy to be the third-largest renewable electricity technology after hydropower and onshore wind.
- - The market for solar PV is expected to be driven by the declining prices of solar PV modules and associated system prices. The solar PV prices have reduced from USD 4,621 per kW in 2010 to USD 1,210 per kW in 2018. This trend is expected to continue in the coming years and the price is expected to go down which is likely to promulgate the market growth.
- - Moreover, solar PV generation increased significantly in Southeast Asia, driven by a surge in new capacity in Vietnam from 0.1 GW to 5.4 GW as of 2019. Capacity additions increased in the United States, the European Union, Latin America, the Middle East and Africa.
- - Solar PV growth in the United States has remained stable for the past few year. In 2019, 13.2 GW of solar PV became operational, registering a 25% growth compared to 2018 additions. In the European Union, solar PV additions increased 98% year-on-year in 2019 owing to faster deployment in Spain, Germany, and the Netherlands.
- - Hence, with supportive government policies and decreasing solar panels price, the solar PV segment is expected to be the largest and the fastest growing segment during the forecast period.
Asia-Pacific to Dominate the Market
- - Asia-Pacific is one of the largest solar energy markets across the globe, which shares nearly 57% of the total installed solar PV capacity. China, Japan, and India are the key markets in the region that has the maximum install capacity share and are expected to increase further during the forecasting period.
- - China’s solar PV industry reached a milestone in 2019 as the cumulative installed capacity exceeded 200GW and ended the year at approximately 204.8GW and registered a 30.1 GW solar PV capacity addition in the same year.
- - Further, the supportive government policies also help to increase the solar target up to 270GW by 2020. The cumulative solar generation capacity in China is expected to hit 530 GW by 2025, to generate around 690 TWh per year, in turn bolstering the market.
- - With the increasing demand for electricity and green energy, India is planning to set up a 700-megawatt solar power project in 2019, that is expected to have an annual electricity production of around 1200-terawatt hour. The electricity generated is expected to meet the demand of 1.1 million Indian population.
- - Moreover, with Japan’s Long-term Energy Supply and Demand Outlook for FY 2030, the Ministry of Economy, Trade, and Industry of Japan is aiming to increase the share of renewable energy share to 24% by 2030, which is expected to increase the solar energy market in the country and in the region.
The solar energy market is fragmented. Some of the major players in the market include Canadian Solar Inc, First Solar Inc., JA Solar Holdings Co. Ltd., Trina Solar Ltd., and JinkoSolar Holdings Co. Ltd.
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