Solar Farm Market is Expected to Increase at a 17.51% of CAGR by 2030

The rising level of pollution is leading to a major increase in environmental concerns. The extensive usage of fossil fuels in order to meet the rising demand for energy is driving the need for sustainable energy. The government is also taking various initiatives to promote renewable energy usage and move towards a sustainable environment. Increasing fossil fuel usage adds to the carbon footprint, further depleting the ozone layer. The government is also providing various tax benefits and incentives which will further propel the growth of the market. Solar energy is also gaining immense popularity as it is an environmentally friendly source of power. Due to these reasons, the global solar farm market size is expected to reach around USD 267.8 billion by 2030, at a CAGR of 17.51%.

What is Solar Farm?

A solar farm is a large-scale installation of solar panels, typically in a field or on a rooftop, designed to capture and convert sunlight into electricity. Also known as a solar power plant, a solar farm typically consists of multiple rows of solar panels, which are connected to inverters and transformers to convert the captured energy into usable AC electricity that can be distributed to the power grid or used on-site. Solar farms are becoming an increasingly popular way to generate clean and renewable energy and can range in size from just a few panels to tens of thousands or even millions of panels covering hundreds of acres of land.

Market Overview

The global solar farm market size was estimated at USD 62.7 billion in 2021 and is expected to reach around USD 267.8 billion by 2030, growing at a CAGR of 17.51% over the forecast period from 2022 to 2030.

Solar Farm Market is also expected to gain momentum on account of the low cost associated with PV panels. The growth of the market is also attributed to the strong presence of solar water farm producers. Increasing awareness by the government regarding the benefits of renewable energy is expected to proliferate the growth of the industry.

The growing penetration of the government to reduce the dependence on fossil fuels is expected to drive the growth of the market. Increasing industrialization along with rising spending by consumers on home upgrades is likely to add to the development of the industry. Solar water farm is gaining momentum owing to increasing public awareness along with government legislation to encourage the production of electricity through renewable sources of power.

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Key STATS

China acquired a prominent share of more than 35% in solar photovoltaic generation in 2021 owing to a significant increase in 2020 and 2021.

The United States accounted for the second-largest growth of more than 15% followed by Europe acquiring a share of 10%.

In 2021, utility-scale plants added 52% of the world's solar PV capacity, followed by residential (28%) and commercial and industrial (9%). The proportion of utility-scale plants decreased to its lowest level since 2012 as record-high distributed PV capacity additions in China, the US, and the EU in 2020-2021 were fuelled by significant policy incentives.

The Commission of Europe also proposed to enhance the target of renewable energy generation from 30% to 40% in 2030.

The ambitious goal of 33% of power generation coming from renewable sources by 2025 (up from roughly 29% in 2021) was included in China's 14th Five-Year Plan, which was announced in June 2022. This aim includes 18% for wind and solar technology.

SWOT Analysis of the Solar Farm Market

Strengths:

Renewable energy source: Solar energy is a renewable source of energy that does not produce any harmful emissions, making it a clean and sustainable alternative to traditional sources of energy.

Government incentives: Many governments around the world offer tax credits, subsidies, and other incentives to encourage the use of solar energy, which can make it more attractive to investors.

Cost-effective: With advances in technology and economies of scale, solar energy has become increasingly cost-effective, making it a competitive option for power generation.

Scalability: Solar farms can be built in a variety of sizes, from small installations on residential rooftops to large utility-scale projects, allowing for flexibility and scalability in meeting energy demand.

Weaknesses:

Dependence on weather: Solar energy production is dependent on weather conditions, such as cloud cover and seasonal changes, which can impact the efficiency and reliability of solar farms.

High upfront costs: Building a solar farm requires a significant upfront investment, which can be a barrier to entry for some investors.

Land use: Solar farms require a significant amount of land, which can be a challenge in densely populated areas where land is scarce or expensive.

Transmission infrastructure: Solar farms may require additional transmission infrastructure to connect to the grid, which can add to the overall costs of the project.

Opportunities:

Growing demand for renewable energy: With increasing concerns over climate change and a shift towards sustainable energy, the demand for renewable energy is expected to continue to grow, creating opportunities for solar farm developers.

Technological advancements: Advances in solar technology, such as higher efficiency solar panels and energy storage systems, can improve the performance and reliability of solar farms, making them more attractive to investors.

International expansion: Solar farms can be built in a variety of geographic locations, providing opportunities for companies to expand into new markets and regions.

Partnerships and collaborations: Partnerships between solar farm developers, utilities, and other stakeholders can help to reduce costs and improve the overall performance of solar farms.

Threats:

Competition from other renewable energy sources: Solar energy faces competition from other renewable energy sources such as wind and hydro power, which may offer advantages in certain locations or circumstances.

Regulatory uncertainty: Changes in government policies or regulations can impact the profitability and viability of solar farms, creating uncertainty for investors.

Fluctuating energy prices: Fluctuations in energy prices, such as a drop in fossil fuel prices, can impact the competitiveness of solar energy and reduce the demand for solar farms.

Supply chain disruptions: Disruptions in the supply chain for solar panels and other equipment can impact the availability and cost of solar energy systems, potentially slowing the growth of the solar farm market.

COVID-19 Impact on Solar Farm Market

The outburst of the global pandemic has declined the growth of almost every industry. The health emergency caused by the spread of the disease has disrupted the supply chain of almost every industry.

The solar industry relies heavily on imports from China, which is where most solar panels and components are manufactured. As a result, the pandemic-related shutdowns in China in early 2020 disrupted the supply chain, leading to delays in the delivery of solar panels and other equipment.

Moreover, many solar farms require on-site installation and maintenance work, which requires labor. COVID-19 restrictions and safety concerns have led to labor shortages in many parts of the world, which has slowed down the construction and maintenance of solar farms.

However, governments around the world have introduced various stimulus packages to support their economies during the pandemic. Many of these packages include measures to support the growth of renewable energy, including solar power. This has led to some new opportunities for solar farm developers, particularly in countries with supportive policies and incentives.

Segments covered in the report

By Technology

Solar Photovoltaic

Mono-Si

Thin Film

Multi-Si

Others

By Type

Utility-Scale

Distributed Generation

Micro-Grids

Others

By End User

Residential

Commercial

Industrial

By Geography

North America

Europe

Asia-Pacific

Latin America

Middle East & Africa (MEA)

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Solar Farm Market is Expected to Increase at a 17.51% of CAGR by 2030

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