Solar Energy Market to Reach $1.6 trillion, Globally, by 2034 at 15.2% CAGR: Allied Market Research

The demand for the solar energy market is driven by the growing emphasis on carbon reduction, sustainable power generation, and energy independence, making it a vital component of the global renewable energy transition. Compared to conventional energy sources, solar energy offers a clean, abundant, and cost-effective solution for electricity generation, supported by advancements in photovoltaic technologies, declining installation costs, and favorable government policies.

PORTLAND, Ore., Nov. 17, 2025 /PRNewswire/ -- Allied Market Research published a report, titled, "Solar Energy Market by Technology (Photovoltaic Systems and Concentrated Solar Power Systems), Solar Module (Monocrystalline, Polycrystalline, Cadmium Telluride, Amorphous Silicon Cells, and Others), Application (Residential, Commercial, and Industrial), and End-Use (Electricity Generation, Lighting, Heating, and Charging): Global Opportunity Analysis and Industry Forecast, 2025-2034". According to the report, the solar energy market was valued at $0.4 trillion in 2024, and is estimated to reach $1.6 trillion by 2034, growing at a CAGR of 15.2% from 2025 to 2034.

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Price Volatility of Solar Energy

The variable and non-continuous nature of solar energy generation due to weather changes, seasons, and the day-night cycle is a significant challenge hindering the growth of the solar energy market. While solar power has expanded rapidly and supplies around 8% of global electricity as of July 2025, this growth brings unique obstacles, particularly as grids absorb increasing shares of solar and wind energy. Solar generation spiked to 2,129 terawatt-hours over the last 11 years, but this success spotlights the resilience problem. Energy systems designed for predictable, controllable sources struggle to balance variable renewable supply with the continuous, fluctuating needs of consumer grids. Operators must constantly match electricity supply and demand, yet intermittent solar output makes this task more complex. For example, in California and Australia regions with high solar penetration. Unexpected surpluses have driven wholesale power prices negative, while sudden output drops strain grid stability and risk partial blackouts such as those observed in Spain and Portugal earlier in 2025. Even with advanced weather forecasting, abrupt cloud cover or storms lead to substantial prediction errors, causing grid imbalances and equipment stress. All these factors are expected to hamper the solar energy market growth.

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National Regulatory Landscape

• Government Policies and Frameworks
  Governments across the world have introduced comprehensive renewable energy policies to promote solar power adoption. These include national solar missions, renewable portfolio standards (RPS), and feed-in tariff (FiT) schemes that mandate or incentivize utilities to source a specific percentage of power from solar energy. Such frameworks are crucial in driving large-scale deployment and ensuring regulatory uniformity across regions.
• Licensing and Permitting Requirements
  Solar energy projects must comply with a series of licensing and environmental clearances before development. These include land-use approvals, grid interconnection permissions, and environmental impact assessments (EIA). Regulatory bodies ensure that solar installations adhere to local land, zoning, and safety regulations to minimize ecological and social disruption.
• Grid Connectivity and Interconnection Standards
  Governments and utility regulators have established strict grid interconnection codes to ensure the reliable integration of solar power into national and regional grids. These standards define voltage, frequency, safety, and technical requirements for connecting solar systems, reducing the risk of grid instability and ensuring smooth energy transmission.
• Renewable Energy Certificates (RECs) and Carbon Credits
  Regulatory authorities often implement Renewable Energy Certificate mechanisms to certify and trade the generation of solar power. These instruments provide market-based incentives for producers by monetizing clean energy generation, supporting corporate sustainability goals, and facilitating compliance with renewable purchase obligations (RPOs).
• Subsidies, Tax Incentives, and Financial Support
  It offers financial incentives such as investment tax credits (ITC), production tax credits (PTC), accelerated depreciation, and capital subsidies for solar energy projects. These regulatory measures lower the initial investment burden, enhance project feasibility, and attract both domestic and foreign investments in the solar sector.
• Quality, Safety, and Performance Standards
  Regulatory agencies mandate adherence to international and national standards (such as IEC, BIS, or ISO) for solar modules, inverters, and related components. These standards ensure product durability, efficiency, and safety during installation and operation, fostering consumer confidence and long-term reliability.
• Net Metering and Tariff Regulations
  Net metering policies allow consumers generating solar energy to feed surplus electricity back into the grid and receive credits on their electricity bills. Regulators establish tariff structures, billing mechanisms, and compensation rates to ensure fair economic returns for both consumers and utilities.
• Environmental and Land-Use Compliance
  Solar projects must comply with environmental protection laws related to biodiversity conservation, water usage, and waste disposal. Regulators require developers to conduct impact studies and adopt mitigation measures to ensure sustainable land utilization and minimal ecological disruption.
• Data Reporting and Monitoring Requirements
  Solar power producers are often required to submit periodic reports on energy generation, operational efficiency, and equipment performance. These regulatory reporting frameworks promote transparency, accountability, and data-driven policymaking within the renewable energy sector.
• International Trade and Import Regulations
  They regulate the import and export of solar components through tariffs, duties, and quality certifications to support domestic manufacturing. Anti-dumping duties and localization mandates are implemented to ensure fair competition and encourage the growth of indigenous solar industries.

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Growth Opportunities & Future Outlook

Building-integrated photovoltaics represent an innovative approach to solar energy, where photovoltaic panels are seamlessly incorporated into building elements such as windows, roofs, and façades. As compared to traditional rooftop solar panels, BIPV serves a dual purpose; it acts as both a functional building material and a power-generating system. This integration allows architects and developers to maintain the aesthetic appeal of a building while harnessing solar energy. By replacing conventional building materials with solar-generating alternatives, BIPV reduces the overall material cost of construction while providing clean energy. It also helps in optimizing energy efficiency, as buildings can generate a portion of their electricity needs on-site, reducing dependence on the grid and lowering electricity bills. BIPV systems are particularly attractive for commercial and high-rise buildings where rooftop space may be limited but façade or window areas are abundant. In February 2025, Microquanta launched the world's largest building-integrated photovoltaic (BIPV) project, harnessing perovskite panels, at the University Student Entrepreneurship Center in Shanxi. The installation, perched atop the translucent roof of the center in Shenchi County, Shanxi Province, boasts a capacity of 17.92 kWp. The double-glass perovskite modules, each measuring 1,200 mm x 1,000 mm, are engineered for a light transmittance of approximately 40%. All these factors are anticipated to offer new growth opportunities for the solar energy market during the forecast period.

Key Developments

• In July 2025, Enphase introduced its latest energy system featuring the IQ Battery 10C, IQ Meter Collar, and the IQ Gateway. This system offers enhanced energy storage capacity and improved monitoring capabilities, catering to residential solar needs.
• In August 2025, JinkoSolar and IBC SOLAR completed an 8.5 MW Agri-PV project in Veringenstadt, Germany. This project integrates solar energy generation with agricultural land use, promoting dual land utilization.
• In May 2023, First Solar acquired Swedish startup Evolar AB for $38 million, with additional performance-based payments up to $42 million. Evolar specializes in perovskite-based tandem photovoltaic technology, which aims to enhance solar module efficiency. This acquisition positions First Solar to lead in next-generation thin-film photovoltaics.

Leading Market Players: -

• Enphase Energy, Inc
• SunPower Corporation
• JinkoSolar Holding Co., Ltd
• First Solar, Inc.
• Trina solar
• Canadian Solar
• Hanwha Q CELLS Co., Ltd.
• SolarEdge Technologies.
• JA Solar Holdings Co. Ltd
• Yingli Green Energy Holding Company Limited.

The report provides a detailed analysis of these key players in the global solar energy industry. These players have adopted different strategies, such as new product launches, collaborations, expansion, joint ventures, agreements, and others, to increase their market share and maintain dominant shares in different regions. The report is valuable in highlighting business performance, operating segments, product portfolio, and strategic moves of market players to showcase the competitive scenario.

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