Guest article by Aashi Mishra
Solar Power Equipment Market: The Arena of Budding Opportunities
Do you know that solar energy accounted for almost 5.4% of electricity generation globally in 2023? Solar energy is becoming ubiquitous and has been globally widely adopted. Per a study by the World Resources Institute, throughout their lifetime, renewable energy sources usually release 50 grams or less of CO2 per kWh .
As a result, solar power equipment is also becoming necessary to generate usable electricity from sunlight. This equipment includes solar panels, inverters, racking equipment, and performance monitoring equipment. In recent years, the global market for solar power equipment has grown remarkably as it is helping to accelerate the transition to clean and renewable energy sources.
The market for solar power equipment has grown considerably as a result of government initiatives including incentives such as tax breaks, grants, and subsidies. These financial incentives are aimed at making installing solar power systems more cost-effective. For instance, the Federal Solar Investment Tax Credit (ITC) in the U.S. enables businesses and homeowners to claim a tax deduction for a portion of the costs associated with installing solar panels. This offers significant savings and motivates more individuals to convert to solar energy. In this article, we will discuss various parameters associated with the solar power equipment market.
Uses of Solar Power Equipment Across Various Verticals
- Solar Power Equipment in Residential
The most important part of home solar power equipment is the inverter. These inverters are essential because they provide a dependable power backup during frequent power outages. Global solar PV inverter market growth is being driven by the increasing need and demand for clean and green energy. Consumers’ growing readiness to spend money on renewable energy solutions for their residences is backed by laws and advancements in technology. Additionally, the demand for solar PV inverters is increasing due to the need for rural electrification. Moreover, due to the low cost and tax benefits provided by solar (PV) inverters, their acceptance has increased.
Installation of solar panels in residential buildings allows homeowners to reduce their reliance on the grid and their monthly utility bills. According to the U.S. Energy Information Administration, in the United States, small-scale solar systems produced power for 3.7% of single-family residences, including mobile homes, in 2020.
- Solar Power Equipment in Commercial
Businesses can benefit from commercial solar power installations to enhance their operational efficacy and efficiency in several ways. There are numerous incentives and subsidies available for businesses to construct commercial solar systems. This can be a major selling factor for businesses to supply a useful asset that will attract more customers and investors. For instance, over the previous five years, Amazon, Microsoft, Meta Platforms, and Google alone accounted for over 35% of the demand for large, utility-scale solar projects in the United States. These businesses are all dedicated to using only sustainable energy, thus their demand for renewables is expected to increase.
Demand for solar PV panels is anticipated to rise in the commercial sector due to the rising use of solar energy as a power source. For instance, Jetwing Hotels produced over 1,060 megawatt hours (MWh) of solar energy on all of its sites in 2023. Jetwing Hotels, a leader in the hospitality sector in Sri Lanka for more than 50 years, has led the way in incorporating renewable energy into its hotel operations.
- Solar Power Equipment in Industrial
A vast array of industries employs solar energy to meet energy demands, save operating costs, and advance sustainability. Solar power is a desirable alternative in the industrial sector that lessens reliance on natural gas, coal, and oil to generate power. In August 2024, The Asian Development Bank (ADB) invested over USD 90 million in equity with Fourth Partner Energy Private Limited, for the decarbonization of India’s commercial and industrial sectors through utility-scale solar, solar-wind hybrid, and rooftop solar power projects.
Solar Power Equipment Market Landscape and Analysis
The market for solar power equipment was estimated to be worth around USD 129 billion in 2023 and is projected to grow to over USD 525 billion by the end of 2036. There are several prominent growth drivers of the market.
Government programs are encouraging laws to foster market growth and long-term viability of solar energy systems for both utility and non-utility end users. For instance, to facilitate the shift to a decarbonized power industry by 2035, the Solar Energy Technologies Office (SETO) provides funding for research and development in a variety of solar energy fields. As per the Center for Strategic and International Studies in March 2021, DOE revealed new plans to reduce solar energy costs by 60% over the next ten years.
It is anticipated that solar energy systems will become more affordable than the coal or gas power plants that are already in operation. Improved efficiency of the module and government initiatives to stimulate market expansion has led to cost reductions. This may attract businesses to adopt solar power equipment. The weighted average total installed cost of solar PV projects worldwide decreased to around 875 USD/kW in 2022.
The emergence of smart solar solutions is improving the integration, dependability, and efficiency of solar power equipment. Improved integration of energy storage technologies, AI-driven analytics, and Internet of Things (IoT) devices may optimize the performance of solar installations.
Additionally, North America held the greatest revenue share of the solar power equipment market. Initiatives by the U.S. Department of Energy and the Electric Power Research Institute, are greatly increasing the use of solar-powered devices in the region. At the same time, the region’s increasing use of solar energy also supports market expansion. As per the U.S. Energy Information Administration, the amount of solar energy generated in the United States is expected to increase to 286 billion kWh in 2025.
Furthermore, the demand for solar PV inverters is being driven by the presence of government policies that support the production of PV inverters. Besides this, growing environmental consciousness is predicted to fuel demand for PV inverters and other solar power equipment. In October 2024, Israel-based inverter maker SolarEdge introduced the SE330K TerraMax Inverter for smaller solar projects.
In a Nutshell
This article explores the current state of the solar power equipment market which is poised for significant growth. The expansion is led by a shift towards renewable energy and reductions in the price of solar energy systems. Key trends including smart solar solutions are likely to shape the future of the market. This may create new opportunities for the stakeholders inviting more investments.
Moreover, many nations are investing in solar projects to lower national carbon emissions and make solar technology more affordable for both residential and commercial use. The world is about to embrace clean energy on a never-before-seen scale, leading to the higher production of solar power equipment.
Source: https://www.researchnester.com/reports/solar-equipment-market/594
About the author
Aashi Mishra is currently working as a content developer with the Research Nester. An electronics engineer by profession, she loves to simplify complex market aspects into comprehensive information. She has experience of 3 years in this domain where she has mastered in tech writing, editing, copywriting, etc.
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