Solar Energy Market Expected to Reach $1.6 Trillion by 2034

According to a new report published by Allied Market Research, titled, “Solar Energy Market," 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.

Introduction

Solar energy is the energy derived from the sun’s radiation that are converted into heat or electricity using technologies such as solar panels or solar thermal systems. It is a clean, renewable, and sustainable source of power that are helps to reduce dependence on fossil fuels and minimizes environmental pollution. Solar energy is widely used for applications such as electricity generation, water heating, and powering various industrial and residential systems.

Market Dynamics

Improvements in photovoltaic cell efficiency allow solar panels to convert more sunlight into electricity, increasing energy output without requiring additional space. At the same time, advancements in battery storage solutions enable the capture and use of solar energy even when the sun is not shining, addressing the intermittency challenge. In addition, the integration of smart grids and intelligent energy management systems allows for more efficient distribution and monitoring of solar-generated power, optimizing both residential and commercial energy use. These technological developments collectively make solar energy a more reliable, efficient, and practical option for diverse applications. In April 2022, the BCD imposed 40% on solar modules and 25% on solar cells to promote domestic manufacturing. In the 2025 Union Budget, these duties were reduced to 20% each, with exemptions for select raw materials. Major manufacturers such as LONGi Solar, Trina Solar, and Canadian Solar have significantly increased their production capacities.

For instance, in the first half of 2024, the largest manufacturers shipped approximately 40% more solar panels compared to the same period in 2023. The development of high-capacity lithium-ion and emerging solid-state batteries enables excess solar energy to be stored for later use, addressing the intermittency problem that has historically limited solar adoption. This allows households and businesses to maintain a continuous power supply, even at night or during cloudy weather. Integration with energy management systems ensures that stored energy is optimally utilized, reducing dependence on conventional grid electricity. All these factors are expected to drive the growth of solar energy market.

Intermittency 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 now 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 consumers Grid 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 can lead to substantial prediction errors, causing grid imbalances and equipment stress. Building-Integrated Photovoltaics (BIPV) 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.

Segments Overview

The solar energy market is segmented into technology, solar module, application, end-use, and region. On the basis of technology, the market is divided into photovoltaic systems, and concentrated solar power systems parabolic through, solar power tower, fresnel reflectors, and dish stirling. On the basis of solar module, the market is categorized into monocrystalline, polycrystalline, cadmium telluride, amorphous silicon cells, and others. On the basis of applications, the market is categorized into residential, commercial, and industrial. On the basis of end-use, the market is classified into electricity generation, lighting, heating, and charging. Based on region, the market is analyzed across North America, Europe, Asia-Pacific, Latin America, the Middle East, and Africa.

On the basis of technology, concentrated solar power systems segment is the fastest growing segment in the solar energy market growing with the CAGR of 15.8% during the forecast period. Concentrated Solar Power (CSP) systems are advanced solar technology that harnesses sunlight to generate thermal energy, which is then converted into electricity. As compared to conventional photovoltaic (PV) systems that directly convert sunlight into electricity, CSP focuses on concentrating solar radiation using mirrors or lenses onto a small receiver, which absorbs the heat. This heat is typically transferred to a working fluid such as molten salts, synthetic oil, or water, which then drives a steam turbine or a heat engine connected to an electricity generator. The key advantage of CSP systems is their ability to incorporate thermal energy storage, allowing electricity generation even when sunlight is not available, such as during nighttime or cloudy periods.

On the basis of solar module, amorphous silicon cells segment is the fastest growing segment in the solar energy market representing the CAGR of 16.8% from 2025-2034. The primary advantages of amorphous silicon cells is their better performance under low-light conditions or indirect sunlight. These cells are less affected by shading or partial sunlight compared to crystalline silicon cells, making them ideal for regions with variable weather patterns or urban environments where sunlight exposure may be inconsistent. Their efficiency in diffused light conditions enhances their usage in rooftop installations, solar-powered signage, and building-integrated photovoltaics (BIPV), where conventional panels may underperform.

On the basis of application, residential segment is the fastest growing segment in the solar energy market growing with the CAGR of 15.1% during the forecast period. Solar energy has increasingly become a pivotal source of power in residential settings, driven by the dual incentives of reducing electricity costs and minimizing environmental impact. In homes, solar photovoltaic (PV) systems are the most common technology, converting sunlight directly into electricity. These systems typically consist of rooftop solar panels, inverters, and sometimes battery storage units to ensure energy availability during non-sunny periods. Residential solar systems allow homeowners to generate their own electricity, which can significantly reduce dependency on the grid and lower monthly utility bills. In some regions, excess electricity generated are be sold back to the grid through net metering, creating an additional economic benefit.

On the basis of end-use, charging segment is the fastest growing segment in the solar energy market growing with the CAGR of 15.6% during the forecast period. In the automotive sector, solar energy is being leveraged to charge electric vehicles (EVs) either through integrated solar panels on the vehicle itself or through solar-powered charging stations. Vehicles with solar-assisted charging are partially extend their driving range without relying entirely on grid electricity. Similarly, public and private infrastructure is increasingly adopting solar-powered EV charging stations. These stations use solar panels to generate electricity during the day, which is stored in high-capacity batteries and used to charge EVs even after sunset. This approach are reduces dependency on fossil fuels and lowers operating costs and minimizes carbon emissions, aligning with global goals for sustainable mobility.

On the basis of region, Asia-Pacific is the fastest growing segment in the solar energy market growing with the CAGR of 15.6% during the forecast period. India stands as another major solar hub, with rapid capacity additions driven by national programs such as the National Solar Mission and initiatives such as PM-KUSUM for rural solarization. The government aims to achieve 280 GW of solar capacity by 2030, with strong investment in both utility-scale projects and rooftop installations. Solar parks in Rajasthan, Gujarat, and Karnataka are among the largest in the world. The increasing adoption of solar panels in residential, commercial, and agricultural sectors further supports India’s clean energy transition.

This report further highlights key areas of investment. In addition, it includes Porter’s five forces analysis to understand the competitive scenario of the industry and the role of each stakeholder. Value chain analysis for this industry, which includes R&D, components manufacturers, assembly, programming & testing, marketing & sales, customers, and post-sales services, is explained. The report features strategies adopted by key market players to maintain their foothold in the market. Furthermore, it highlights the competitive landscape of the key players to increase their market share and sustain intense competition in the industry.

The major prominent players operating in solar energy market include 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.

Regional Analysis' 

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

The major prominent players operating in the solar energy market include 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.

Key Market Insights

• On the basis of technology, renewable market is divided into photovoltaic systems and concentrated solar power systems. The concentrated solar power systems segment is anticipated to grow at the fastest CAGR of 15.8% during the forecast period.
• On the basis of type, the solar energy market is segmented into parabolic through, solar power tower, fresnel reflectors, dish stirling. The dish stirling segment is anticipated to grow at the fastest CAGR of 16.5% during the forecast period.
• On the basis of solar module, the solar energy market is classified into monocrystalline, polycrystalline, cadmium telluride, amorphous silicon cells, and others.
• On the basis of application, the solar energy market is classified into residential, commercial, industrial, and others. The residential segment is anticipated to grow at the fastest CAGR of 15.1% during the forecast period.
• Region-wise, the solar energy market is analyzed across North America, Europe, Asia-Pacific, and LAMEA. The Asia-Pacific region is anticipated to grow at the fastest CAGR of 15.6% during the forecast period.