Solar Energy Market on Course to Reach US$ 313.0 Billion by 2032 - Persistence Market Research

The global solar energy market .In a world grappling with climate change, energy security, and rising electricity demand, solar energy stands out as a beacon of hope. It offers not only a cleaner alternative to fossil fuels but also a path toward decentralised and resilient energy systems. From utility-scale farms to rooftop installations, solar power is transforming how we generate, distribute, and even think about electricity.

According to Persistence Market Research, The global solar energy market size is likely to be valued at US$ 137.2 Billion in 2025 and is estimated to reach US$ 313.0 Billion by 2032, growing at a CAGR of 12.5 % during the forecast period 2025-2032, driven by rising environmental concerns and increasing installation of renewable energy systems by governments, alongside rapid technological advancements that improve efficiency and reducing costs of solar power.

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• Over the past two decades, solar installations have scaled rapidly across the globe, especially in countries with strong incentive frameworks.

• The International Renewable Energy Agency (IRENA) reports that in 2024, global renewable capacity additions reached 582 gigawatts, with solar photovoltaics accounting for about 77.8 % of that total.

• Goldman Sachs forecasts that global solar installations will rise to 914 GW by 2030, a 57 % increase over 2024 levels.

• Growth has been particularly strong in Asia, where countries like China and India have rapidly scaled up deployment.

Systemic Impact Solar Surpassing Coal
A landmark moment came in the first half of 2025, when global renewable generation (led by solar and wind) overtook coal-fired power for the first time.
This shift marks more than symbolic progress: it signals that clean energy has the scale and momentum to displace entrenched fossil fuel generation.

Market Size and Forecasts
• Beyond the Persistence Market Research projection cited above, other sources offer alternative forecasts. Fortune Business Insights places the global solar power market at USD 253.69 billion in 2023, projecting growth to USD 436.36 billion by 2032 at a CAGR of ~6 %.
• Solar Power Europe anticipates installations growing to ~930 GW by 2029, with annual growth in the low double digits.
• The divergence in growth estimates reflects uncertainty from policy shifts, supply chain risks, and grid integration challenges.

Major Regional Players

• China is now the global leader in solar deployment. Its cumulative photovoltaic capacity crossed 1,100 GW by mid-2025.
• India and other parts of Asia are also rapidly scaling rooftop and utility solar.
• United States: In 2024, the U.S. added an estimated 39.6 GW of solar capacity, bringing total installed solar to about 220 GW.
• Other regions, including Europe, Latin America, and Africa, are pursuing solar growth under national decarbonisation goals, cost advantages, and electrification efforts in remote areas.

Technology Trends and Innovations
• Solar photovoltaic (PV) remains the dominant technology segment (monocrystalline, polycrystalline, thin film).
• Emerging and next-gen approaches such as perovskites, tandem cells, bifacial modules, and quantum dot PV are under development and hold promise for higher efficiency and lower costs.
• Integration with battery storage, smart inverters, and grid flexibility mechanisms is becoming crucial to manage intermittency and demand matching.

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Key Drivers of Solar's Growth

Declining Costs and Scale Economies
One of the most powerful forces behind solar's rise is the steep decline in cost. As cumulative production scales, learning effects and manufacturing improvements push costs downward. Goldman Sachs estimates that when cumulative output doubles, costs could fall ~20 %.

Moreover, solar's marginal operating cost is essentially zero (no fuel cost), giving it an edge once installed.

Policy Support and Incentives
Government policies and incentives remain central:
• Feed-in tariffs, net metering, tax credits, and subsidies help bridge the viability gap.
• Mandates, auctions, and renewable portfolio standards (RPS) create demand certainty.
• Net zero and climate targets globally strengthen the political case for solar deployment.

Energy Demand, Electrification, and Decarbonisation
As economies electrify (transportation, heating, industrial loads), demand for clean generation grows. Solar fits well into this transition. Countries aiming to reduce carbon emissions see solar as a scalable lever to decarbonise the power sector.

Grid Integration and System Stability
• High solar penetration can lead to supply/demand mismatch, negative pricing, and voltage fluctuations.
• Without adequate storage or dispatchable resources, grids can struggle to handle excess solar energy or rapid fluctuations.

Policy and Regulatory Uncertainty
• Changes in subsidies or incentive schemes can dramatically affect project viability.
• Some regions have cut or rolled back support for renewables, creating risks to future deployment.
• In China, for example, new large commercial solar projects are no longer guaranteed grid access or minimum purchase volumes.

Land Use, Siting, and Environmental Concerns
• Utility-scale solar farms require significant land, sometimes competing with agriculture or ecosystems.
• The siting of transmission lines and grid infrastructure also adds complexity and cost.

Economic Cannibalization and Market Value Decline
• As solar becomes more prevalent, its marginal value can decline - when many solar systems generate simultaneously, electricity prices drop, reducing revenues.
• A recent study of European electricity markets demonstrates that an increase in solar installations in neighboring zones can depress the value of local solar generation.

• Storage Cost and Technology Maturity
• Battery costs, while falling, still represent a significant added investment.
• Optimal sizing of solar + storage systems remains an active research area.
• Storage technologies beyond lithium (flow batteries, solid state, etc.) are still emerging.

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Pathways and Strategies for Future Growth
Hybrid Systems and Integrated Solutions
• Pairing solar with battery storage, demand response, and smart controls can help smooth supply and shift energy when needed.
• Hybridization increases the value proposition and makes solar more adaptable in high-penetration grids.

Market Design and Grid Innovation
• Electricity markets may need reform to reward flexibility, capacity, and fast response, not just energy alone.
• Mechanisms such as time-of-use pricing, real-time markets, and differentiated products (solar energy vs grid energy) can incentivize better integration.

Scaling Manufacturing, Supply Chain Resilience, and Domestic Value Chains
• Building resilient supply chains (especially outside a single country) reduces risk.
• Supporting domestic manufacturing helps with cost stability, job creation, and energy security.

Key Indicators to Watch
• Annual global and national installation capacity (GW)
• Cost metrics (USD per watt, levelized cost of electricity)
• Storage deployment alongside solar
• Market design changes (price signals, ancillary service markets)
• Innovation breakthroughs (new materials, manufacturing leaps)

Potential Impacts and Payoffs
• Decarbonisation: Solar will be a linchpin in meeting climate goals.
• Energy Access: Off-grid solar can help bring electricity to underserved populations.
• Economic Opportunity: New industries, jobs, and investment flows will follow solar expansion.
• Grid resilience and flexibility: Solar paired with storage can enhance grid stability.

Conclusions

Solar energy has moved from niche to mainstream, propelled by technological innovation, cost declines, and growing urgency to decarbonise. While challenges remain especially around grid integration, market design, regulatory stability, and storage costs the momentum is undeniable.
Over the coming decade, the winners will be those who build systems and markets that treat solar not just as a generation source, but as an integral, flexible, and intelligent part of the energy system. Countries, companies, and communities that adopt forward-looking strategies - in hybridization, market design, and innovation will benefit the most in the transition to a cleaner, more resilient energy future.

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