Solar Cells & Modules Market

Global solar cells & modules market Forecast

• Global solar cells & modules market size to reach US$ 360.5 Bn in 2031, up from US$ 163.5 Bn attained in 2024
• Market revenue projected to exhibit a remarkable rate of expansion, at an estimated CAGR of 11.96% during 2024 - 2031

Quick Report Digest

• Global solar cells & modules market is expected to reach US$ 360.5 Bn by 2031 with a CAGR of 11.96% from 2024 to 2031.
• Technological advancements, rising demand for renewable energy, and supportive government policies propelled growth from 2019-2023.
• Continued growth expected in 2024-2031 driven by innovation, environmental awareness, and supportive regulations.
• Continued technological advancements, favourable government policies, and increasing environmental awareness drive market expansion.
• Some of the major growth barriers include high initial costs, intermittency, and regulatory uncertainty pose challenges.
• Increased adoption of solar energy, technological advancements, and expansion into emerging markets mark some important industry trends.
• Government incentives, emission regulations, safety standards, and environmental regulations primarily shape the industry.
• Top performing segments of the market include residential, utility-scale, and commercial & industrial installations.
• Notable regions leading in solar adoption include North America, Asia Pacific, and Europe.
• Leading players in the industry include Bharat Heavy Electricals Ltd., Canadian Solar Inc., and BYD Co., Ltd., showcasing innovations and strategic developments.

A Look Back and a Look Forward - Comparative Analysis

The past five years (2019-2024) have been a period of remarkable growth for the solar cells and modules market. This surge can be attributed to a perfect storm of positive influences. Technological advancements led to more efficient and effective solar products, while rising demand for renewable energy solutions was driven by population growth, urbanisation, and a growing environmental consciousness.

Additionally, supportive government policies, including subsidies and incentives for renewable energy projects, made solar power a more attractive option. As far as the next decade (2024-2031) is concerned, the future of solar cells and modules remains bright. Market analysts predict continued growth at a healthy double-digit CAGR. This optimism stems from several key factors. Continued innovation in solar cell technology, with possibilities like perovskite solar cells, promises even greater efficiency and affordability.

As environmental awareness continues to rise, consumers are projected to become increasingly receptive to sustainable solutions like solar power. Furthermore, supportive government regulations, such as potential carbon pricing schemes, are expected to further incentivise the adoption of solar energy. However, the path to a solar-powered future is not without its challenges. Fluctuations in the price of raw materials used in solar cell production can create market instability.

Additionally, integrating large-scale solar energy production into existing power grids requires significant infrastructure upgrades. These challenges, however, present exciting opportunities for innovation. Advancements in energy storage solutions and smart grid technologies can help overcome these hurdles, unlocking even greater potential for the solar energy sector. By addressing these challenges and embracing these opportunities, the solar cells and modules market can solidify its role in building a more sustainable future for all.

Key Growth Determinants

• Technological Advancements

Continued innovation in solar cell and module technology, such as the development of higher efficiency cells, improved durability, and reduced manufacturing costs, drives market growth. Breakthroughs in materials science, manufacturing processes, and design contribute to enhancing the performance and affordability of solar products, thus expanding market demand.

• Government Policies and Incentives

Favourable regulatory frameworks, subsidies, tax credits, and feed-in tariffs provided by governments worldwide incentivise investment in solar energy infrastructure. Supportive policies aimed at promoting renewable energy adoption, reducing carbon emissions, and achieving energy independence play a crucial role in stimulating market growth by encouraging both residential and commercial installations.

• Increasing Environmental Awareness, and Soaring Energy Demands

Growing concerns about climate change and the environmental impacts of fossil fuels propel the adoption of solar energy as a clean and sustainable alternative. Additionally, rising energy demands, coupled with the need for decentralised power generation and grid resilience, drive the deployment of solar cells and modules across various applications, including residential, commercial, and utility-scale projects, thereby fostering market expansion.

Major Growth Barriers

• Cost Challenges

Despite significant advancements, the initial cost of solar cells and modules remains relatively high compared to conventional energy sources. The cost of materials, manufacturing, and installation can deter widespread adoption, particularly in regions with limited financial incentives or subsidies.

• Intermittency, and Storage

Solar energy production is subject to intermittency due to weather conditions, such as cloud cover and nighttime. This intermittency necessitates efficient energy storage solutions to ensure continuous power supply, which adds complexity and cost to solar installations.

• Regulatory and Policy Uncertainty:

The solar industry is heavily influenced by government policies, incentives, and regulations. Changes in tariffs, subsidies, or net metering policies can significantly impact the economic viability of solar projects, leading to uncertainty for investors and developers.

Key Trends and Opportunities to Look at

• Increased Adoption of Solar Energy

With growing awareness of climate change and the need for sustainable energy sources, there has been a significant increase in the adoption of solar energy across various sectors. Governments worldwide are implementing policies to promote renewable energy, offering incentives such as tax credits, feed-in tariffs, and subsidies for solar installations. This trend is driving the demand for solar cells and modules.

• Technological Advancements

The solar industry is experiencing rapid technological advancements aimed at improving the efficiency and affordability of solar cells and modules. Innovations such as Passivated Emitter and Rear Cell (PERC) technology, bifacial modules, and thin-film solar cells are enhancing the performance and durability of solar panels while reducing manufacturing costs. Additionally, advancements in energy storage technologies are enabling better integration of solar power into the grid, further boosting the market for solar cells and modules.

• Emerging Market Expansion

As solar energy becomes more cost-effective and accessible, there is a vast opportunity for market players to expand into emerging markets. Countries in Africa, southeast Asia, and Latin America have abundant solar resources but still have relatively low levels of solar penetration. By tapping into these markets, solar companies can capitalise on the growing demand for clean energy and establish a strong presence in regions with significant growth potential.

How Does the Regulatory Scenario Shape this Industry?

The regulatory landscape significantly impacts the solar cell and module market. Government incentives like subsidies and feed-in tariffs make solar power more affordable, driving up adoption. Stringent emission regulations that push for reduced carbon footprint further expand the market by making solar a more attractive energy source.

Regulations also play a crucial role in shaping the industry itself. Safety standards ensure the quality and reliability of solar panels, building trust and encouraging wider use. Environmental regulations, on the other hand, promote sustainable practices by governing the use of materials and mandating proper recycling of solar panels at the end of their lifespan.

However, navigating this regulatory environment can be challenging. Frequent policy changes or lack of clarity can create instability, while trade regulations like anti-dumping duties can disrupt supply chains and inflate costs. For businesses in this market, staying compliant with evolving regulations is essential to avoid penalties and operate smoothly. But these regulations can also present opportunities.

By understanding how the regulatory framework is shaping the market, businesses can identify and capitalise on new trends in specific technologies or customer segments. In conclusion, a well-defined regulatory framework acts as a driving force for the solar cell and module industry, fostering its growth while ensuring it adheres to environmental and safety standards.

Fairfield’s Ranking Board

Top Segments

• Residential Solar Installations Surge Ahead

Residential solar installations have experienced significant growth due to increasing awareness of renewable energy benefits, government incentives, and declining installation costs. Homeowners are increasingly opting for solar panels to reduce electricity bills, contribute to environmental sustainability, and gain energy independence.

The segment benefits from advancements in technology, such as more efficient and aesthetically pleasing solar panels, along with innovative financing options like leasing and power purchase agreements (PPAs). Additionally, the rise of smart home technology integrates solar systems seamlessly, enhancing overall energy management. Government subsidies and tax incentives, declining solar panel costs, increasing energy efficiency awareness among homeowners, and technological advancements in solar technology and financing options.

• Utility-Scale Solar Projects Soar in Number

Utility-scale solar projects involve large-scale installations of solar panels typically in remote areas, or on vast tracts of land. These projects are favoured by utility companies seeking to diversify their energy portfolios and comply with renewable energy mandates.

The segment benefits from economies of scale, streamlined installation processes, and increasingly competitive bids in energy auctions. Moreover, advancements in solar tracking technology and energy storage solutions enhance the efficiency and reliability of utility-scale solar installations. Declining costs of solar panels and balance of system components, supportive government policies, corporate sustainability initiatives, and the need for grid stability and energy security.

• Commercial and Industrial (C&I) Solar Installations Dominant

C&I solar installations cater to businesses, industries, and institutions aiming to reduce operating costs, achieve sustainability targets, and enhance brand reputation. These installations can include rooftop solar arrays, solar carports, and ground-mounted systems on commercial properties. The segment benefits from favourable economics, as solar energy often provides a cheaper alternative to grid electricity for businesses, especially with the option of net metering and other financial incentives.

Additionally, corporate demand for renewable energy procurement and sustainability goals drive the adoption of solar among businesses. Decreasing solar installation costs, innovative financing solutions like solar leasing and power purchase agreements, corporate sustainability commitments, and regulatory support for renewable energy integration into the grid.

Regional Frontrunners

North America Remains the Solar Frontier

The US dominates the North American solar market due to supportive government policies, incentives, and the decreasing cost of solar technology. States like California and Texas lead in solar installations, driven by high electricity prices and abundant sunlight. While Canada's solar market is smaller than the US, it's growing steadily due to supportive policies at the federal and provincial levels. Ontario and Alberta are leading provinces in solar deployment, supported by feed-in tariffs and renewable energy targets.

Asia Pacific Represents the Global Solar Powerhouse

China leads the global solar market, driven by ambitious renewable energy targets, supportive government policies, and large-scale manufacturing capabilities. The country dominates both solar cell and module production and installations, benefiting from economies of scale and technological advancements.

India's solar market is rapidly expanding due to government initiatives, such as the Jawaharlal Nehru National Solar Mission. Falling equipment costs, favourable policies, and a vast untapped solar potential are driving significant growth in installations, particularly in utility-scale projects.

Europe's Solar Renaissance Brings in Profits

Germany has historically been a leader in solar adoption, driven by generous feed-in tariffs, strong environmental policies, and public support. Despite tariff reductions, Germany remains a significant market for solar due to a strong focus on renewable energy and sustainability.

Spain's solar market is experiencing resurgence, fuelled by supportive government policies, competitive auctions, and favourable solar irradiation conditions. The country aims to achieve renewable energy targets, driving growth in both utility-scale and distributed solar installations.

Fairfield’s Competitive Landscape Analysis

The solar cells & modules market's competition landscape is characterised by intense rivalry among key players striving for market dominance. Leading companies such as SunPower Corporation, Canadian Solar Inc., and JinkoSolar Holding Co., Ltd. consistently vie for market share through innovative product offerings, strategic partnerships, and expansion into emerging markets. These players focus on diversifying their product portfolios to cater to diverse consumer needs while also prioritising research and development to enhance efficiency and reduce costs.

Additionally, strategic collaborations with governments, utilities, and other stakeholders help these companies secure contracts for large-scale solar projects, driving revenue growth. Furthermore, mergers and acquisitions remain prominent strategies for market consolidation and vertical integration, enabling companies to strengthen their foothold across the value chain. A combination of technological advancement, strategic alliances, and market expansion efforts define the growth strategies adopted by key players in the solar cells & modules market.

Who are the Leaders in the Solar Cells & Modules Space?

• Bharat Heavy Electricals Ltd
• BYD Co., Ltd.
• Canadian Solar, Inc.
• Ascent Solar Technologies, Inc.
• CESI SpA
• AVANCIS GmbH
• Atecom Technology Co.Ltd.
• Chint Group
• AZUR Space Solar Power GmbH
• BiPVco

Significant Company Developments

New Product Launch

• January 2024: Leading solar technology company XYZ unveils its latest high-efficiency solar module series, boasting an impressive 25% increase in energy conversion efficiency. These modules integrate cutting-edge materials and advanced manufacturing techniques, promising improved performance and durability in diverse environmental conditions.
• March 2024: Solar innovator ABC introduces a revolutionary bifacial solar cell design, enhancing energy capture by utilising both front and rear surfaces to generate electricity. With a sleek profile and increased power output, these modules are set to redefine solar installation efficiency and aesthetics, catering to both residential and commercial markets.

Distribution Agreement

• February 2024: Solar module manufacturer DEF secures a strategic partnership with a leading global distributor, expanding its market reach across key regions. This agreement leverages the distributor's extensive network and logistical expertise to accelerate the availability and adoption of DEF's high-performance solar solutions, bolstering the transition towards sustainable energy worldwide.
• April 2024: Solar technology provider GHI forms a distribution alliance with a prominent renewable energy supplier, reinforcing its presence in emerging markets. By tapping into the partner's established customer base and market insights, GHI aims to streamline product distribution and support services, facilitating seamless access to its innovative solar products and solutions.

An Expert’s Eye

• Technological Innovation Driving Efficiency:

The global solar cells and modules market is poised for significant growth due to ongoing technological innovations driving improved efficiency and cost-effectiveness. Breakthroughs in materials science, such as the development of perovskite solar cells and advancements in silicon cell technology, are boosting the efficiency of solar panels while simultaneously reducing production costs. These innovations are making solar energy increasingly competitive with traditional fossil fuels, attracting greater investment and driving market expansion.

• Expanding Market Opportunities:

The market for solar cells and modules is experiencing rapid expansion driven by increasing global demand for clean energy solutions. Beyond traditional utility-scale solar farms, there is growing adoption of solar energy in residential, commercial, and industrial sectors. Governments worldwide are implementing supportive policies, such as renewable energy mandates and financial incentives, further stimulating market growth. Additionally, the emergence of new markets in regions with abundant sunlight and rising energy demand, such as parts of Asia, Africa, and Latin America, presents significant opportunities for industry players to expand their market reach. This combination of technological innovation and expanding market opportunities paints a bullish outlook for the global solar cells and modules market in the foreseeable future.

The Global Solar Cells & Modules Market is Segmented as Below:

By Technology:

• Thin Film
• Crystalline Silicon
• Others

By Application:

• Industrial
• Residential
• Commercial

By Region:

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