Global Solar Power Market Size, Share, Growth, Trends and Forecast to 2028

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The is growing rapidly. This expansion of the market is attributed to several key factors, including supportive government policies aimed at achieving emission reduction targets and enhancing energy security, surge in investments in the global solar energy market, decreasing solar panel costs, and increasing competitiveness of solar relative to the conventional fossil fuels-based energy.

However, the expansion of the global solar photovoltaic market faces persistent hurdles. Issues such as low workforce availability, grid integration limitations, and continued support for the fossil fuel sector in the form of subsidies impede the deployment of large-scale solar PV capacity.

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Concentrated solar power (CSP), another solar energy form, is experiencing a slower growth rate compared to solar PV. The worldwide installed capacity of concentrating solar thermal power (CSP) increased by 200 MW in 2022, reaching a total of 6.3 GW. This growth follows the first-ever contraction of global CSP capacity in 2021.

Overall, the global concentrated solar power systems market has decelerated after an initial surge of development in Spain and the United States in the early 2010s. Neither of these historically leading markets has added capacity in nearly a decade. However, new projects are coming online and are under construction in emerging markets, including Chile, China, Israel, Morocco, South Africa, and the United Arab Emirates.

DriversStrong Policy Support

Policy support continues to play a pivotal role in driving solar PV deployment across most of the world. The growth in capacity is due to a variety of policy mechanisms, including auctions, feed-in tariffs, net-metering, and contracts for difference.

Some of the major policies driving solar PV growth implemented in different parts of the world in recent times are:

In August 2022, the United States federal government introduced the Investment in Renewable Energy Act (IRA), a substantial initiative designed to greatly enhance support for renewable energy over the coming decade. This is to be achieved through the implementation of tax credits and various other measures.

In June 2022, China unveiled its 14th Five-Year Plan for Renewable Energy, outlining a notably ambitious goal of sourcing 33% of its electricity generation from renewables by 2025. This target represents a substantial increase from the approximately 29% achieved in 2021 and encompasses an 18% target specifically for wind and solar technologies.

Segment Analysis

In 2022, utility-scale solar PV plants accounted for approximately 50% of the global solar PV capacity additions. This was followed by distributed capacity, with the commercial and industrial segments contributing 25% and residential rooftop solar installations making up 23% of the total capacity additions.

During the period of elevated fuel and electricity costs in 2021-2022, distributed solar PV systems gained traction as an appealing alternative for many consumers, driving increased investment in this sector. While utility-scale systems remain the most cost-effective source of electricity generation in numerous regions globally, the task of constructing large-scale installations is becoming increasingly complex in many countries. This complexity arises from the scarcity of suitable sites and intricate permitting procedures, thereby favoring the adoption of small-scale rooftop PV systems.

Regional Analysis

The continues to dominate the global solar market with record capacity additions, primarily due to the surging PV installations in China, India, and Japan. China, in particular, retains its dominant role in solar PV capacity expansion, with a remarkable addition of 100 GW in 2022, marking a nearly 60% increase compared to the previous year. The unveiling of the 14th Five-Year Plan for Renewable Energy in 2022, featuring ambitious deployment targets, paves the way for sustained capacity growth in the foreseeable future.