Solar Energy Market Outlook: CSP, BIPV & Storage Driving Rapid Expansion

According to a new report published by Allied Market Research titled "Solar Energy Market," the global solar energy market was valued at $0.4 trillion in 2024 and is projected to reach $1.6 trillion by 2034, growing at a robust CAGR of 15.2% from 2025 to 2034. Rapid technological advancements, favorable government policies, and rising demand for clean electricity are key factors accelerating market expansion worldwide.

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Introduction: Solar Energy as a Global Power Solution

Solar energy is derived from the sun's radiation and converted into electricity or heat using technologies such as photovoltaic (PV) panels and solar thermal systems. As a clean, renewable, and sustainable energy source, solar power plays a vital role in reducing reliance on fossil fuels and minimizing greenhouse gas emissions. Today, solar energy is widely used for electricity generation, water heating, EV charging, and powering residential, commercial, and industrial applications.

With global energy demand rising and climate commitments tightening, the solar energy market has emerged as a cornerstone of the global energy transition.

Solar Energy Market Dynamics

Technological advancements remain a primary growth driver of the solar energy market. Improvements in photovoltaic cell efficiency have enabled solar panels to generate more electricity from the same surface area, significantly enhancing energy output. At the same time, advancements in battery storage technologies-particularly lithium-ion and emerging solid-state batteries-allow excess solar energy to be stored and used during nighttime or cloudy conditions.

The integration of smart grids and intelligent energy management systems further strengthens the market by optimizing power distribution and monitoring solar-generated electricity in real time. These innovations collectively make solar power more reliable and cost-effective across diverse applications.

Government policies also play a crucial role. For instance, India initially imposed basic customs duties (BCD) of 40% on solar modules and 25% on solar cells in April 2022 to promote domestic manufacturing. In the 2025 Union Budget, these duties were reduced to 20%, along with exemptions on selected raw materials, boosting investments and capacity expansions. Major manufacturers such as LONGi Solar, Trina Solar, and Canadian Solar reported nearly 40% higher panel shipments in the first half of 2024 compared to the previous year.

Market Restraint: Intermittency Challenges

Despite rapid growth, intermittency remains a major challenge for the solar energy market. Solar power generation is variable due to weather conditions, seasonal changes, and the day-night cycle. As of July 2025, solar energy contributes around 8% of global electricity, and its increasing penetration has created grid stability concerns.

Regions such as California and Australia have experienced negative wholesale electricity prices during surplus generation periods, while sudden drops in output have strained grid systems. Partial blackouts in Spain and Portugal in early 2025 highlight the need for improved grid flexibility, storage solutions, and demand-response systems to manage variable renewable energy effectively.

Emerging Opportunity: Building-Integrated Photovoltaics (BIPV)

Building-Integrated Photovoltaics (BIPV) represent a major growth opportunity within the solar energy market. BIPV systems integrate photovoltaic panels directly into building components such as roofs, façades, and windows, combining aesthetics with power generation.

Compared to conventional rooftop panels, BIPV reduces construction material costs and enables on-site electricity generation, lowering grid dependency. These systems are especially attractive for commercial complexes and high-rise buildings with limited rooftop space.

In February 2025, Microquanta launched the world's largest perovskite-based BIPV project at the University Student Entrepreneurship Center in Shanxi, China. The 17.92 kWp installation uses double-glass modules with 40% light transmittance, demonstrating the commercial potential of next-generation solar technologies.

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Solar Energy Market Segmentation Analysis

By Technology: The market is segmented into photovoltaic systems and concentrated solar power (CSP) systems. CSP is the fastest-growing segment, registering a CAGR of 15.8% during the forecast period. CSP systems use mirrors or lenses to concentrate sunlight and generate thermal energy, which can be stored and converted into electricity even when sunlight is unavailable.

By Solar Module: Based on module type, the market includes monocrystalline, polycrystalline, cadmium telluride, amorphous silicon cells, and others. The amorphous silicon cells segment is expected to grow at the fastest CAGR of 16.8% due to superior performance in low-light and diffused sunlight conditions, making it ideal for BIPV and urban installations.

By Application: Residential, commercial, and industrial segments form the application landscape. The residential segment is the fastest-growing, with a CAGR of 15.1%, driven by rooftop solar adoption, falling system costs, and net-metering benefits that allow homeowners to sell surplus electricity back to the grid.

By End-Use: Electricity generation, lighting, heating, and charging are key end-use segments. The charging segment is witnessing rapid growth at a CAGR of 15.6%, fueled by solar-powered EV charging stations and solar-assisted electric vehicles that reduce dependence on conventional grid power.

Regional Outlook: Asia-Pacific Leads Growth

Region-wise, the solar energy market is analyzed across North America, Europe, Asia-Pacific, and LAMEA. Asia-Pacific is projected to grow at the fastest CAGR of 15.6% during the forecast period.

India plays a pivotal role, supported by initiatives such as the National Solar Mission and PM-KUSUM, aiming to achieve 280 GW of solar capacity by 2030. Large-scale solar parks in Rajasthan, Gujarat, and Karnataka, along with rising rooftop installations, continue to accelerate the country's clean energy transition.

Competitive Landscape

The solar energy market is highly competitive, with key players focusing on capacity expansion, technological innovation, and strategic partnerships. Major companies operating in the market include Enphase Energy, SunPower Corporation, JinkoSolar, First Solar, Trina Solar, Canadian Solar, Hanwha Q CELLS, SolarEdge Technologies, JA Solar, and Yingli Green Energy.

The report also includes Porter's Five Forces analysis and value chain assessment covering R&D, component manufacturing, assembly, testing, marketing, and post-sales services, highlighting investment opportunities across the ecosystem.

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Conclusion

The global solar energy market is set for remarkable growth over the next decade, driven by technological advancements, supportive government policies, and rising demand for sustainable power solutions. While intermittency challenges persist, innovations such as energy storage, smart grids, and BIPV systems are expected to unlock new growth avenues, positioning solar energy as a cornerstone of the global clean energy future.

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Allied Market Research (AMR) is a full-service market research and business-consulting wing of Allied Analytics LLP based in Portland, Oregon. Allied Market Research provides global enterprises as well as medium and small businesses with unmatched quality of "Market Research Reports" and "Business Intelligence Solutions." AMR has a targeted view to provide business insights and consulting to assist its clients to make strategic business decisions and achieve sustainable growth in their respective market domain.

Pawan Kumar, the CEO of Allied Market Research, is leading the organization toward providing high-quality data and insights. We are in professional corporate relations with various companies and this helps us in digging out market data that helps us generate accurate research data tables and confirms utmost accuracy in our market forecasting. Each and every data presented in the reports published by us is extracted through primary interviews with top officials from leading companies of domain concerned. Our secondary data procurement methodology includes deep online and offline research and discussion with knowledgeable professionals and analysts in the industry.

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