What Is The Solar Pv Market Trend?

Solar photovoltaic (PV) technology converts energy from the sun into electricity using semiconducting materials. Solar PV panels have seen tremendous growth in recent years due to improving efficiency and falling costs. The solar PV industry has emerged as a critical part of the global transition to clean energy. With abundant solar resources available across most geographies, solar PV offers a sustainable and renewable source of electricity generation.

The solar PV market has expanded at an average annual growth rate of over 40% in the past decade. Total global installed capacity reached over 600 gigawatts (GW) in 2019. With most forecasts projecting accelerated growth in the coming years, solar PV is on track to become one of the mainstream sources of electricity generation globally.

Current Market Size

Today, solar PV has reached over 670 gigawatts (GW) of total installed capacity worldwide. This accounts for about 3% of global electricity demand. The leading countries in total installed solar PV capacity are China, the United States, Japan, Germany and India. China leads the world by a significant margin, with over 254 GW of installed capacity. The United States ranks second with over 96 GW, while Japan has about 68 GW installed. Germany and India round out the top 5 countries with 54 GW and 48 GW respectively. These top countries account for the majority of solar PV capacity installed globally.

Growth Trends

The solar PV market has seen rapid growth in capacity additions over the past decade. Annual solar PV installations have increased from under 5 GW in 2007 to over 150 GW in 2022. This represents a compound annual growth rate of over 35% during this period.

Some key statistics on the growth trends:

• In 2015, 50 GW of solar PV capacity was added globally, double the amount added in 2014.



• Annual additions surpassed 70 GW in 2016 and 90 GW in 2017.
• Additions reached over 100 GW for the first time in 2018 at approximately 109 GW.
• In 2019, solar PV installations reached around 115 GW worldwide.
• Despite the Covid-19 pandemic, 2020 saw over 135 GW installed.
• In 2021, a record 155 GW of solar capacity was added globally.

The exponential growth in solar PV adoption over the past decade demonstrates that it is now a mainstream energy technology, driven by improving cost-competitiveness and supportive government policies around the world. Given the strong momentum, analysts expect continued rapid growth in solar PV installations in the years ahead.

Cost Trends

The cost of solar PV modules and systems has declined dramatically over the past decade. This has been driven by technological improvements, economies of scale, increased manufacturing efficiency, and an overly saturated global market. The average price of solar PV modules has fallen by around 90% since 2010. In 2010, modules cost around $1.60 per watt, whereas today they can be purchased for around $0.20 per watt.

The installed price of solar PV systems has also declined substantially. In 2010, a typical residential rooftop solar system cost around $7 per watt. Today, prices range from $2.50 to $3.50 per watt depending on system size and location. For large utility-scale solar farms, system prices have fallen from around $3.80 per watt in 2010 to around $1 per watt today.

This dramatic decline in solar PV system prices has enabled solar to become cost-competitive with conventional electricity sources in many markets. This is known as grid parity. Key recent grid parity milestones include:

• Residential solar reaching grid parity in Australia, parts of the U.S., and across Europe and Asia.
• Utility-scale solar reaching grid parity in sunny regions like the Middle East and Chile.
• Corporate and industrial solar reaching grid parity in most markets.

Further cost reductions through technological improvements and economies of scale will enable solar PV to become increasingly cost-competitive across a wider range of applications and markets.

Policy Support

Policies like tax credits, feed-in tariffs (FITs) and renewable portfolio standards (RPS) have driven solar PV adoption around the world. Government incentives reduce costs for both residential and utility systems, making solar PV installation affordable. Countries with strong policy support have seen solar markets grow rapidly.

Some of the well known policy support programs are:

• Federal Residential Renewable Energy Tax Credit in the US – provides a 26% tax credit for systems installed through 2023
• Net metering policies in over 40 states
• Feed-in tariffs in Germany, Italy and Spain – helped kickstart solar growth in Europe
• Renewable Energy Certificates (RECs) – tradeable credits produced for renewable energy generation
• Japan’s feed-in tariff – led to rapid solar PV adoption, installing over 50 GW by 2017

A good example of policy impact is Germany, whose feed-in tariff led it to have over half the world’s solar PV capacity in 2011. But as FIT rates were reduced, deployment slowed down. This demonstrates how policies directly influence market growth trends.

Leading Companies

The top solar module suppliers by market share are JinkoSolar, JA Solar, Trina Solar, Canadian Solar, and LONGi Green Energy. These companies account for over 50% of global module shipments. JinkoSolar currently leads with an estimated 15% market share.

Some notable startups in solar include Heliogen, which uses mirrors to concentrate sunlight for industrial applications, and Aurora Solar, which provides software and analytics for solar design and sales. Major acquisitions in recent years include Total’s purchase of SunPower and Enphase’s acquisition of SolarBridge Technologies.

Future Projections

The future looks bright for the solar PV market. Total global solar PV capacity is expected to reach over 1,500 GW by 2025, up from around 580 GW at the end of 2019. This represents an annual growth rate of approximately 20%. Key markets like China, the United States, India, Japan and Germany will continue to lead in new installations. Developing markets in Southeast Asia, the Middle East, Latin America and Africa will also see strong growth.

By 2040, solar PV could provide up to 13% of global electricity generation, according to projections by the International Energy Agency (IEA). The IEA forecasts global solar PV capacity to reach over 4,500 GW by 2040 under its Sustainable Development Scenario. Under the IEA’s Stated Policies Scenario, solar PV capacity is projected to reach around 3,000 GW by 2040. Other analysts predict even higher capacities exceeding 6,000 or 8,000 GW by 2040.

Falling costs, supportive government policies, and increasing demand for clean energy will drive rapid growth in solar PV over the next two decades. However, challenges around grid integration, infrastructure constraints, financing, regulations and policy changes could impact the pace of growth. Nevertheless, analysts remain bullish about the solar PV industry’s future prospects overall.

Challenges

While solar PV has seen tremendous growth, the industry still faces some key challenges going forward. Two major ones involve grid integration and energy storage needs.

As more intermittent solar energy enters the grid, it creates challenges for grid operators to match supply and demand. Sudden drops in solar output when clouds pass can cause reliability issues. And periods of peak solar production may exceed grid capacity. Large-scale energy storage can help smooth out these fluctuations. But adding sufficient storage remains expensive.

Another challenge is the impact of global trade disputes. Solar PV manufacturing has been dominated by Chinese companies in recent years. But some countries are now implementing tariffs and quotas to protect domestic manufacturers. For example, the US has imposed duties on Chinese solar cells and modules. Such trade actions can disrupt supply chains and increase prices, at least in the short term.

Emerging Technologies

The solar PV industry continues to innovate and develop new technologies to improve efficiency and reduce costs. Two key emerging technologies to watch are perovskite solar cells and novel manufacturing techniques.

Perovskite solar cells are a new class of solar cells that have reached efficiencies of over 25% in lab settings, rivaling traditional silicon cells. Perovskites have the potential for easy manufacturability, low costs, and tunable bandgaps. However, more research is needed to improve their stability and durability before widespread commercialization.

Organic photovoltaics (OPV) are another emerging thin-film technology using organic electronics, plastics and polymers. They can be made semitransparent and flexible, enabling new applications not possible with rigid silicon panels. Their efficiency is steadily improving but still less than 10% for commercial products.

Novel manufacturing techniques like roll-to-roll processing, spray-on solar, and printable solar aim to reduce material waste and capital costs associated with traditional panel fabrication. These could enable new solar applications by printing solar cells directly onto surfaces. However, they have tradeoffs in efficiency and lifespan compared to silicon panels.

While still emerging, these technologies showcase the ongoing innovation in the solar industry. Continued research and development is rapidly improving their capabilities and viability for mainstream adoption.

Conclusion

As we’ve seen, the solar PV market has experienced rapid growth over the past decade, driven by declining costs and supportive policies. Key takeaways include:

• Total global solar PV capacity now exceeds 600 GW, generating over 2% of the world’s electricity.
• Costs have declined by over 90% since 2009, making solar competitive with fossil fuels.
• China has emerged as the undisputed leader in manufacturing and deployment.
• The industry is rapidly innovating and improving efficiency.
• Solar PV is now one of the lowest cost sources of new electricity generation.

Continued adoption of solar PV will be critical for reducing carbon emissions and mitigating climate change. With costs continuing to fall and efficiency improving, the future is bright for this important renewable energy source. However, challenges remain in integrating high shares of variable solar onto the grid. Supportive policies, technological innovation, and large-scale deployment will be key to realizing the full potential of solar photovoltaics.