Global Photovoltaics Market Outlook 2028

Global Photovoltaics Market Overview

The global photovoltaics market is valued at USD 96.5 billion, driven by the rapid adoption of renewable energy solutions, technological advancements, and increasing global focus on reducing carbon emissions. This market growth is primarily fueled by government incentives, supportive policies, and subsidies across various regions, encouraging both residential and commercial installations of solar power systems.

Countries such as China, the United States, and Germany dominate the global photovoltaics market due to their aggressive adoption of renewable energy technologies, strong manufacturing capabilities, and government-driven renewable energy policies. China leads due to its significant solar panel manufacturing infrastructure, while the United States and Germany benefit from large-scale solar farms and investments in solar energy as part of their decarbonization strategies. These nations are at the forefront due to their robust industrial ecosystems and regulatory support fostering large-scale solar adoption.

Governments are increasing financial support for solar energy projects to encourage widespread adoption. In 2023, Japans METI introduced a new financing program providing up to 200 billion ($1.8 billion) in loans for large-scale solar projects. In the U.S., the Department of Energy offered $3 billion in loan guarantees for solar developments in 2023. These funds aim to reduce the financial burden of solar installations, fostering the expansion of photovoltaic systems.

Global Photovoltaics Market Segmentation

By Component Type: The global photovoltaics market is segmented by component type into solar cells, modules, inverters, and balance of systems (BOS). Solar cells dominate this segment due to continuous technological innovations that have improved energy conversion efficiency, making solar energy more accessible and cost-effective. Additionally, the rising demand for high-performance solar cells, such as those incorporating monocrystalline and polycrystalline technologies, is driving this segment's growth.

By Region: The global photovoltaics market is segmented by region into North America, Europe, Asia- Pacific, Middle East & Africa, and Latin America. Asia- Pacific leads the global photovoltaics market due to the significant presence of key players in the region, especially in China, which is the largest manufacturer and consumer of solar energy. Government-backed initiatives and lower production costs further drive Asia- Pacifics dominance in the global market.

Global Photovoltaics Market Competitive Landscape

The global photovoltaics market is dominated by a few major players, which include both local and international companies. Chinas manufacturing giants play a significant role, while international corporations from the U.S. and Europe contribute through innovation and technology advancements. This consolidation highlights the significant influence of these key companies in shaping the global market landscape.

Company Name

Established Year

Headquarters

Installed Capacity

Revenue (USD Bn)

Global Market Penetration

Solar Efficiency Rate

R&D Investments (USD Mn)

Government Contracts

Production Plants

First Solar, Inc.

1999

Arizona, USA

Jinko Solar Holdings Co., Ltd.

2006

Shanghai, China

Canadian Solar Inc.

2001

Ontario, Canada

Trina Solar Limited

1997

Jiangsu, China

Sun Power Corporation

1985

California, USA

Global Photovoltaics Market Analysis

Market Growth Drivers

Government Subsidies and Incentives: Governments worldwide are incentivizing solar energy to meet their carbon reduction goals. The U.S. government provided over $10 billion in solar subsidies in 2023 through tax credits under the Inflation Reduction Act, driving solar installations across the country. Similarly, India's National Solar Mission offered capital subsidies for grid-connected solar rooftop projects, totaling INR 5,000 crore ($600 million). These fiscal policies are expected to boost solar installations globally. Germany also extended its solar feed-in tariffs in 2023, allowing households to earn a fixed amount for solar electricity fed back into the grid.

Technological Advancements in Solar Panel Efficiency: In 2023, the efficiency of commercial solar panels improved significantly due to advancements in photovoltaic technologies like perovskite solar cells and multi-junction cells. Perovskite cells, being low-cost and easier to produce, are poised to revolutionize solar manufacturing, with production scaling from 100 megawatts (MW) to 2 GW globally between 2022 and 2023. These innovations enhance the conversion of sunlight into energy, reducing the number of panels required to generate the same energy output, thereby lowering installation and maintenance costs.

Expansion of Distributed Energy Resources (DER): Distributed Energy Resources (DER), including rooftop solar panels, expanded significantly in 2023, with 19 GW of DER solar added in the United States alone. This expansion is driven by increasing energy independence, net-metering policies, and grid resilience strategies. DERs allow consumers to generate and store energy, reducing reliance on centralized power stations. Countries like Japan and Australia have also seen an uptick in DER deployments, with Japan adding 7 GW of DER solar capacity in 2023, encouraged by its feed-in-tariff program.

Market Challenges

High Initial Investment Costs: While the cost of solar modules has decreased, the initial investment required for large-scale photovoltaic installations remains high. The average cost for installing a utility-scale solar PV system in the U.S. was $1,200 per kilowatt (kW) in 2023, according to the Department of Energy. Despite government incentives, the upfront capital costs for land acquisition, grid connection, and storage solutions still pose a significant barrier for smaller companies and developing nations seeking to adopt solar technologies.

Supply Chain Disruptions in Key Raw Materials: Supply chain disruptions in materials like polysilicon, essential for photovoltaic panels, have impacted global production in recent years. In 2023, China, the world's largest producer of polysilicon, experienced a temporary shortage, leading to a reduction in global output. This shortage caused delays in solar projects across Europe and North America, as sourcing alternatives proved time-consuming. Although production has recovered, potential future disruptions remain a significant risk to the PV market.

Global Photovoltaics Market Future Outlook

The global photovoltaics market is expected to continue its growth trajectory, driven by advancements in solar energy technology, increasing energy demand, and continuous government support. Significant growth is anticipated due to innovations in solar panel efficiency, storage technologies, and the rising adoption of decentralized energy systems. Governments across the globe are increasingly prioritizing clean energy, which will further drive investments into the photovoltaic market. Additionally, increased efforts to reduce the cost of solar energy will contribute to its widespread adoption.

Market Opportunities:

Increasing Use of Artificial Intelligence for Solar Performance Optimization: Artificial intelligence (AI) has become instrumental in optimizing solar farm performance. AI algorithms analyze weather patterns and power consumption data to adjust solar panel angles for maximum efficiency. In 2023, AI-enabled solar farms in Europe saved an estimated 15 million kWh of electricity by optimizing operations. The European Unions AI for Solar initiative, launched in 2022, aims to enhance the performance of photovoltaic systems through real-time data analytics and predictive maintenance.

Rise of Solar PPA (Power Purchase Agreement) Contracts: Power Purchase Agreements (PPAs) have become a popular financial model for solar energy projects. In 2023, global PPA capacity increased to 45 GW, with companies like Google and Amazon securing long-term solar contracts to power their data centers. PPAs offer financial stability for both solar developers and consumers by locking in energy prices for a fixed term. This model is particularly attractive for corporations looking to achieve sustainability goals without the high initial investment costs associated with building solar infrastructure.
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