Photovoltaic Market Size, Share, Analysis & Forecast [2031]

Report Description

The global photovoltaic market size was valued at USD 86.5 Bn in 2022 and is likely to reach USD 248 Bn by 2031, expanding at a CAGR of 11.45% during 2023-2031. Growing concerns regarding global warming and increasing demand for energy consumption are projected to fuel the market.

A photovoltaic convert solar energy directly into electrical energy. A photovoltaic cell is manufactured from semiconductor materials with a non-mechanical structure. It is installed in a solar panel in 32, 36, 48, 60, 72, and 96 cells per panel configurations. A solar panel that consists of 32 solar cells generates around 14.82 volts of electric output.

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The photovoltaic system is embedded with a solar inverter (PV inverter) that converts direct current to alternating current (DC to AC) and then stores it in a battery to use as a main or alternative source of electricity. The unused or excess energy then returns to the utility grid, where it is stored as a power backup. This ensures the continuous supply of electricity in case of a power outage.

Installation of photovoltaic systems offers immense environmental benefits. Photovoltaics do not require fuel in generating electricity, which helps to reduce carbon footprint. The PV devices such as solar panels and cells are manufactured using recyclable components, thus resulting in recyclable energy production.

Installation of a photovoltaic system with a utility grid ensures an uninterrupted power supply by providing a reliable power backup. Compared to other sources of electricity, photovoltaic is well-suitable for residential use. With photovoltaics, there is no threat of shock or short circuits.

The COVID-19 pandemic hampered the market due to a sharp decline in the demand for PV installation. However, many projects of the solar plant have been halted or postponed during the pandemic, owing to the prolonged shutdown of manufacturing & processing activities and several preventive measures imposed by the government, which disrupted the supply chain of the market.

The world has faced a global energy crisis during the Russia-Ukraine war. Ukraine is a prime exporter of crude petroleum. Due to Russia’s invasion the demand for crude petroleum was not fulfilled by Ukraine, which led to a hike in the price of oil, gas, and fuel.

The exponentially growing cost of fuel significantly increased the price of electricity, which caused blackouts and prolonged power cuts, due to a shortage of power supplies. Many power plants in Europe declared a shutdown due to excessive operational costs. Thus, governments across the globe started undertaking renewable energy generation projects in order to cut down fuel import costs and to be self-reliant in case of any situation such as a war, or a pandemic in the future.

Photovoltaic Market Dynamics

Key Trend

Rising usage of solar power batteries as a secondary power backup in industries is a crucial trend. Large-scale industries require a consistent power supply and reliable power backup to maintain the workflow. Thus, solar power batteries play a crucial role in case of uncertain power outages and reduce electricity expenses to a certain limit.

Major Drivers

Growing adoption of sustainable energy is anticipated to drive the market, especially after the world has faced a global energy crisis in 2022. Governments across the globe are taking initiatives toward creating alternative solutions for power generation sources that require minimal raw material costs. However, non-conventional sources of energy do not require raw materials or fuels to generate electricity as it depends on natural resources, which are available throughout the year.

Increasing power consumption due to a rapidly expanding population is likely to boost the market. Energy consumption requirements go hand in hand with the rising residential buildings at a rapid pace, owing to the increasing population. Furthermore, the growing requirement for an uninterrupted power supply accelerates the market.

Existing Restraints

The high installation cost of photovoltaic systems is a major restraining factor to the photovoltaic market. Solar panels require advanced raw materials such as high-grade silicon and lithium for solar batteries, which are costlier. However, the other sources of electricity generation plants require low installation costs, which may limit the use of photovoltaics.

Photovoltaics are not capable to generate electricity during poor sunlight. During heavy winters & monsoons, the sky is overcast and the sunlight does not reach the solar panels directly, which disrupts the operation.

Emerging Opportunities

Rising research & development to improve power output in poor sunlight creates immense opportunity in the market. The residential setup for home automation requires reliable power backup. Home automated systems work efficiently in case of uncertain power cuts. Power backup is an essential tool for operating at peak hours, during the night.

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Scope of Photovoltaic Market Report

The market report includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Photovoltaic Market Segment Insights

Based on component, the photovoltaic market is segmented into inverter, balance of system (BOS), and modules. The balance of system (BOS) segment is anticipated to hold a key share of the market during the projection period, as it is considered to be the most important component of a PV system. BOS in a photovoltaic system is a set of components that converts direct current (DC) to alternating current (AC).

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In terms of installation type, the market is divided into ground, mounted, building integrated photovoltaic (BIPV), and full-cell PV. The building integrated photovoltaic (BIPV) segment is expected to register a considerable CAGR during the forecast period, as it generates more energy than traditional PV panels. This type of installation is integrated with the desired part of infrastructure such as rooftops, windows, and facades where sunlight directly comes. It occupies the already utilized space for the building and contributes to developing net-zero energy buildings.

On the basis of system, the photovoltaic market is fragmented into low concentration photovoltaic (LCPV) and high concentration photovoltaic (HCPV).

The low concentration photovoltaic (LCPV) segment held a major market share in 2022 and is expected to expand at a significant growth rate in the coming years, owing to the increasing incorporation of LCPV systems in solar panels that generate a higher amount of energy output as compared to regular PV cells. The segment growth is further attributed to the increasing usage in roadway lights, water irrigation pumps, parking meters, remote guard posts, and radio transmitters.

Based on technology, the market is segregated into mono Si, thin film, and multi Si. The thin film segment is anticipated to expand at a rapid pace during the forecast period, as it requires fewer semiconductor materials compared to others. Thin film photovoltaics are composed of silicon, copper, and cadmium as raw materials.

A thin film PV cell is a material of high utility as it has a wide range of applications due to its minor size. It is as thin as a hair strand. It is widely used in solar farms, solar vehicles, and in the manufacture of semi-transparent photovoltaic material to laminate window panes.

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Based on application the photovoltaic market is divided into commercial, residential, and industrial. The industrial segment held a major market share in 2021 and is expected to grow at a high CAGR during the projected period, due to the rising adoption of a sustainable source of energy in electricity generation. The segment growth is further attributed to the rapid industrialization in emerging economies.

The residential segment is expected to register robust growth during the forecast period, owing to the rising awareness of photovoltaic systems for households and the growing affordability of the PV system for residential power requirements. Furthermore, the growing demand for uninterrupted power supply accelerates the market.

Regional Analysis

In terms of region, the global photovoltaic market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America accounted for a key share of the market in 2022 and is expected to dominate the market in the coming years, owing to the rising government investments to strengthen the reliability of non-conventional sources of energy. However, the rising focus to expand energy firms to avoid blackouts during the energy crisis situation propel the regional market.

The market in Asia Pacific is expected to expand at a significant pace during the projection period, due to increasing awareness among the population about the credibility of photovoltaics. Governments of developing countries such as China and India are encouraging consumers to install maximum rooftop photovoltaic panels by offering several subsidies to attain sustainable electricity production. Thus, the adoption rate of rooftop photovoltaics in residential buildings has increased, which further contributes to regional market growth.

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