Solar Energy Market Size, Share and Trends 2024 to 2034

Solar Energy Market Size and Forecast 2024 to 2034

The global solar energy market size is calculated at USD 121.99 billion in 2024 and is projected to surpass around USD 389.86 billion by 2034, expanding at a CAGR of 12.32% from 2024 to 2034. The demand for solar is escalated by the initiative to reduce the reliance on fossil fuels. This increases the demand for renewable energy sources which are a clean energy option in recent years.

Solar Energy Market Key Takeaways

• Asia Pacific dominated the global solar energy market and generated more than 36% of market share in 2023.
• North America is anticipated to grow at the fastest CAGR in the market during the forecast period of 2024 to 2034.
• By technology, the photovoltaic systems segment contributed the largest market share of 80% in 2023.
• By technology, the concentrated solar power systems segment is anticipated to grow at the fastest CAGR in the market during the forecast period.
• By solar modules, the polycrystalline segment held the largest share of the market in 2023.
• By solar modules, the monocrystalline segment is expected to register the fastest growth during the forecast period.
• By application, the industrial segment led the global market in 2023.
• By application, the residential segment is anticipated to grow at the fastest CAGR during the forecast period.
• By end-user, the electricity generation segment dominated the global market in 2023.
• By end-user, the lighting segment is projected to register significant growth in the market over the forecast period.

Asia Pacific Solar Energy Market Size and Growth 2024 to 2034

The Asia Pacific solar energy market size is exhibited at USD 43.92 billion in 2024 and is predicted to hit around USD 142.3 billion by 2034, growing at a CAGR of 12.46% from 2024 to 2034.

Asia Pacific dominated the global solar energy market in 2023. The dominance of the region is attributed to the rapid urbanization in countries like China, India, and Japan, which are witnessing higher electricity demand. India and China are the top two populated countries that are also focusing on the adoption of renewable plants, which will help in managing the power demand in the region. The region also has a wider industrial sector, which occupies the majority of the electricity demand, which creates multiple opportunities for solar adoption.

North America is anticipated to grow at the fastest CAGR in the solar energy market during the forecast period of 2024 to 2034. The region is growing efficiently due to the presence of countries like the United States and Canada, which are witnessing rapid investments in the industry. Additionally, the huge corporate industry base in the region is leading towards adopting renewable energy options that play a major role in the growth of the region.

• The U.S. Department of Energy has put precisely USD 130 million into research and development of solar power technologies. 

Market Overview

Solar energy refers to energy that is derived from the radiation of the sun, which can be implemented using various technologies like panels that can convert sunlight into electricity. Solar energy can be used in various applications where the sunlight can also be converted into heat. The solar energy market is gaining significant popularity due to the rising need for fossil fuel alternatives. Solar energy is considered to be sustainable, which can help reduce the environmental impact by being used for residential and commercial purposes. Adopting these plants can help in reducing the environmental impact and energy dependency on fossil fuels.

How is AI Revolutionizing the Solar Energy Market?

The emergence of technologies like Artificial Intelligence (AI) and Machine Learning (ML) are playing a crucial role in developing and enhancing energy production processes. AI algorithms are playing a crucial role in predicting the weather with the help of satellite imagery that can predict energy forecasting, contributing to the solar energy market. AI-based sensors are also helping to enhance the performance of the panels, which detect issues during the process that do not disturb the workflow. Additionally, these technologies can also help in energy optimization, which manages the need for energy, which can further be utilized when needed. 

• In October 2024, Masdar partnered with Presight to create an AI-driven asset management tool, enhancing operational efficiency in renewable energy projects, as part of its goal to optimize energy supply and increase production.

Solar Energy Market Growth Factors 

• Rising technological advancements in solar panels are helping in increasing their efficiency which stands out as a major growth factor of the solar energy market.
• Adoption of solar energy is considered to reduce the energy dependence on imported fuels, which is considered to be a crucial growth factor.
• The rising public-private partnerships are leading towards advanced research from improving these technologies that help towards the market growth.
• The emerging market companies in the developing are increasing rapidly which stands out as a major growth factor in the solar energy market.

Market Scope

Market Dynamics

Drivers

Energy security

Energy management has become one of the major challenges, especially in underdeveloped and developing regions, which face challenges due to the higher costs and demand for fossil fuels. The solar energy market creates multiple offerings in these regions, which can help reduce energy dependency on fossil fuels. Developing solar-based energy sources creates multiple opportunities in the region where it is also generating employment in regions that can strengthen the country’s economy. Many governments are focusing on adopting lower solar plants that can help in managing the needs of the particular region.

Increasing demand for renewable energy 

The increasing environmental awareness is leading to the changing preferences in energy generation. The use of fossil fuels is declining due to the rising climate change concerns, which is creating demand in the solar energy market. Organizations and companies are focusing on reducing the Greenhouse Gas (GHG) effect, which creates business opportunities in the renewable energy sector. The rising preference towards adopting renewable energy options is leading to technological advancements, such as the production of advanced solar panels and other power generation modules. The corporate sector is also focused on adopting these sustainable goals, which will help contribute to the growth of renewable energy adoption.

Restraint

Higher initial investments

The rising environmental awareness has contributed to the adoption of solar energy but there are still some factors which are expected to hamper the market growth. Adopting these technologies often requires higher initial investments which can restrict its expansion in low-sized businesses and residential populations. This restricts the growth of the equipment market and can affect its costs due to the fluctuation in the market. The ROI in the solar energy market also takes a longer time, which cannot be affordable for small-sized income companies.

Opportunities

Rising energy prices

The limited availability of traditional energy is leading to a rapid increase in costs, which is making it unaffordable in many regions. The solar energy market presents several business opportunities that are attracting many consumers and businesses to adopt solar plants. Additionally, global initiatives towards adopting renewable energy are leading to long-term investments in the market, which will create employment in the upcoming years. The rising environmental awareness among the urban population is expected to drive the growth rate of solar panels in the region.

Government initiatives and policies

The increasing global initiatives towards adopting sustainable energy options have raised the opportunities that will boost the solar energy market growth in the upcoming years. Many governments are providing subsidies and tax incentives for installing solar panels in their homes, which will help in the adoption of renewable energy. For instance, the Indian government provides a subsidy to households for installing solar panels under the scheme named PM-Surya Ghar: Muft Bijli Yojana.

India is also focusing on the adoption of solar power grids where the government passed a scheme for solar power grids allocating 10,000 INR crore rupees. These policies will help the companies in the solar energy market to grow efficiently. Additionally, other nations are also focused on adopting these energy sources by investing in research and development.

Technology Insights

The photovoltaic systems segment stood dominant in the global solar energy market in 2023. It is a system that converts sunlight into electricity by using solar cells. The dominance of the segment is attributed to its cost-effectiveness, which makes it preferable for residential and commercial use. PV systems are also growing efficiently due to their ease of installation compared to the others. The market is driven by the growth of these PVs due to their well-established consumer base from the past few decades. Many technological advancements are being made that focus on improving the efficiency of these systems.

The concentrated solar power systems segment is anticipated to grow at the fastest CAGR in the solar energy market during the forecast period of 2024 to 2034. These systems use mirrors or lenses to concentrate the sunlight into a receiver. The growth of the market is attributed to the exceptional storage capacity of these systems, which helps manage electricity needs in complex weather conditions. The rising climate change is leading to the adoption of these systems, which are expected to fulfill consumer demand.   

Solar Module Insights

The polycrystalline segment held the largest share of the solar energy market in 2023. These modules are made of silicon crystals that are melted together, leading to the formation of solar cells. The dominance of the segment is attributed to the lower production costs of these solar modules, which can be used for multiple purposes in the market. This has led to its wider production due to its preferences in residential and commercial usage.

The monocrystalline segment is expected to register the fastest growth in the solar energy market during the forecast period of 2024 to 2034. These panels are produced by using a single silicon crystal. The market is driven by the enhanced energy efficiency of these panels, which maximizes energy output. These panels are gaining significant popularity in residential and commercial use as they produce more energy by consuming less space. Rapid technological advancements in developing passivated emitter and rear cell are expected to increase panel efficiency and reduce overall costs.

Application Insights

The industrial segment led the global solar energy market in 2023. The dominance of the segment is attributed to the rising energy needs in industrial companies. The market is helping companies to reduce overall expenses as it reduces energy bills. The industrial sector is also one of the major users of electricity, which reduces the availability of traditional energy. The availability of space in industrial setups is also higher, which makes it a perfect option for solar installations. Additionally, the rising government initiatives towards adopting renewable energies are also contributing to the adoption of solar panels in industrial setups.

The residential segment is anticipated to grow at the fastest CAGR in the market from 2024 to 2034. The rising disposable incomes in urban areas are one of the major growth factors that influence the adoption of these plants. The governments are also focusing on promoting the use of renewable energy sources through campaigns and subsidies that possess multiple opportunities in the residential solar energy market. Adopting solar panels in residential settings will also increase energy dependency, which will help reduce the use of fossil fuels.

End-user Insights

The electricity generation segment dominated the global solar energy market in 2023. The dominance of the segment is attributed to the higher electricity need in the residential and commercial setting, which uses solar energy to produce massive amounts of electricity.  The market is witnessing significant popularity due to the increasing urbanization in regions, which is leading to a higher demand for electricity generation.

By end-user, the lighting segment is projected to register significant growth in the solar energy market over the forecast period of 2024 to 2034. The growth of the market is attributed to the rising energy efficiency needed for the use of solar street lights and other lighting, which helps save electricity bills. Governments are adopting the use of lighting in infrastructure projects, which is expected to create many opportunities for rural and urban development projects.

Solar Energy Market Companies

• Canadian Solar
• SolarEdge Technologies
• SunPower Corporation
• First Solar, Inc.
• Enphase Energy, Inc.
• Hanwha Q Cells Co., Ltd.
• Yingli Green Energy Holding Company Limited
• JinkoSolar Holding Co., Ltd.
• Trina Solar
• JA Solar Holdings Co. Ltd.
• Waaree Energies 

Recent Developments

• In October 2024, India, GEAPP, and the Uttar Pradesh Expressways Industrial Development Authority announced an INR 1,800 crore solar park project, aiming to establish a 450-500 MW solar power capacity along the Bundelkhand Expressway.
• In October 2024, Ambrane launched its Solar 10K power bank featuring a 10,000 mAh battery and four-fold solar panels, supporting fast charging and sustainability for outdoor enthusiasts.
• In October 2024, Sri Lanka, DH Ceylon Energy introduced a 110 MW Project Apollo solar park in Hambantota, investing USD 82 million to enhance the country's renewable energy landscape and reduce carbon emissions.
• In September 2024, Gautam Solar announced an INR 1,000 crore investment in a 2 GW solar cell manufacturing facility to meet the growing demand for domestically produced components and support India’s renewable energy targets.

Segments Covered in the Report 

By Technology

• Photovoltaic Systems
• Concentrated Solar Power Systems
  • Type
    • Parabolic Through
    • Solar Power Tower
    • Fresnel Reflectors
    • Dish Stirling

By Solar Module

• Cadmium Telluride
• Amorphous Silicon Cells
• Others
• Monocrystalline
• Polycrystalline

By Application

• Residential
• Commercial
• Industrial

By End-user

• Electricity Generation
• Lighting
• Heating
• Charging

By Geography

• North America
• Asia Pacific
• Europe
• Latin America
• Middle East and Africa