The global solar farm market size was valued at USD 88.12 million in 2021. It is expected to reach USD 458.10 million by 2030, growing at a CAGR of 20.1% during the forecast period (2022–2030). The low cost of photovoltaic panels and the strong presence of solar water farm producers are two factors that have contributed to the rapid expansion of the solar water farm market over the past few years. In addition, as a result of the implementation of government regulations that aim to promote the production of energy from renewable sources to reduce dependence on fossil fuels and minimize the emission of pollutants, consumer awareness regarding solar water farming is increasing. The United States Solar Energy Industries Association (SEIA) claims that to encourage the use of photovoltaic technology for electricity generation, the federal government has enacted policies and legislation such as community solar and net metering.
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Favourable Government Regulations to the Utilization of Photovoltaic Technology
According to information provided by the Solar Energy Industries Association of the United States (SEIA), the federal government has enacted policies like net metering and commMWy Solar to encourage photovoltaic technology to generate electricity. Consumers in some nations, such as the United States, Spain, and France, can use photovoltaic energy to meet their electricity requirements and then sell the excess solar power they generate. Over several decades, the solar photovoltaic industry in China has seen unparalleled levels of expansion compared to any other country. According to the China Photovoltaic Industry Association, the amount of energy generated using photovoltaics in China increased by 36 percent yearly. The implementation of photovoltaic technology is being encouraged by these regulations. It is anticipated that these regulations will positively impact the market for solar farms. In addition, there is a significant expectation that there will be a rise in the demand for solar farms as the utilization of photovoltaic technology grows.
Increasing Investments in the Solar Energy Industry
As a result of environmental regulations, several businesses are installing renewable energy plants. Many countries are researching green power generation techniques to lower carbon emission levels. Solar power is one of the renewable energy sources that offer competitive prices. As a result, many nations have begun investing in solar energy. Because of this, such a remarkable annual solar capacity installation is helping to favor the growth of the global market.
High Costs Associated with Installation
PV technology is cost-effective and an ideal option for various end-use applications; however, the high capital costs associated with PV installations compared to those of other emerging renewable technologies are a barrier to the market's expansion. The establishment of solar farms is another factor that drives up the total cost of PV. The total number of PV systems installed during the time frame is anticipated to decline. Solar energy is stored in batteries after it has been captured. The market for solar farms is expected to be constrained by the expensiveness, size, and regular need to replace the batteries used to store solar energy.
Growing Demand for Renewable Energy
The increased demand for PV technology can be attributed to the need for sustainable energy resources, a reduction in dependency on conventional fuels, and a reduction in the number of carbon emissions produced. The increase in energy demand from developing countries in the Asia-Pacific region, such as India, China, and Thailand, has led to significant growth in solar photovoltaic (PV), one of the many forms of renewable energy sources wind and hydro energy. This is one of the reasons why solar PV has seen such significant growth in recent years. The quickening pace of industrialization, as well as urbanization, is to blame for this. In addition, the implementation of stringent government regulations to reduce carbon emissions produced due to the usage of conventional fuels has led to an increase in the adoption of photovoltaic technology for the generation of electricity, which has led to an increase in the use of photovoltaic technology for the generation of electricity. As the market for renewable energy expands, it is anticipated that there will be an increase in demand for solar farms.
The global market for solar farms has been divided into type and end-user.
Based on type, the global solar farm market has been categorized into utility-scale, distributed generation, and microgrids.
The utility-scale segment is the highest contributor to the market, growing at a CAGR of 19.5% during the forecast period. The genuine scale of the undertaking and the amount of power these large-scale solar farms can generate sets them apart from more traditional photovoltaic alternatives. Either the utility company buys the power generated to sell to its customers through a power purchase agreement (PPA), or the utility company can own the farm itself. Following this step, utility companies can distribute the power to commercial or residential customers connected to their utility grid. It is anticipated that the surge in investments in grid expansion and integration technologies such as storage and UV connectivity will drive the market's growth.
The distributed generation's second-largest segment is expected to grow at a CAGR of 21.3% during the forecast period. It is anticipated that an increase in technology that enables distributed generation will drive market expansion in the United States. This number represents approximately one-sixth of the capacity of the nation's existing centralized power plants.
Based on the end-user industry, the global solar farm market has been categorized into residential, commercial, and industrial sectors.
The commercial segment is the highest contributor, growing at a CAGR of 20.6% during the forecast period. The shortage of electricity supply can be attributed to the expansion of economies worldwide and the growth of urban areas. The use of solar energy by commercial buildings such as offices, shopping malls, and airports, amongst others, helps to reduce the load on traditional fossil fuel power plants and further decreases the carbon footprint of these buildings. Because of the surge in solar photovoltaics, there has been an increase in the utilization of solar farms to produce electricity effectively.
The industrial segment is the second-largest segment and is estimated to grow at a CAGR of 19.3% during the forecast period. The utility-scale industry has witnessed a meteoric rise in the number of solar photovoltaic (PV) power plants that have been put into operation. The expansion of the solar farm market can be attributed to several factors, the most important of which are decreases in costs, technological advancements, an increase in the manufacturing of solar products, and innovations in financing. The solar photovoltaic (PV) market is anticipated to experience growth, particularly in the applications used in industry, which will likely increase the demand for solar farms.
The global solar farm market has been studied across North America, Europe, Asia-Pacific, and LAMEA.
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Asia-Pacific is the most dominant contributor to the global solar farm market, growing at a CAGR of 19.8% during the forecast period. An increase in government initiatives, such as Akshay Urja, which includes the electrification of rural areas, is the primary factor driving growth in the solar farm market in the Asia-Pacific region. As a result of these initiatives, governments will likely distribute solar lighting systems in more rural areas, which is expected to increase the demand for PV energy. These kinds of initiatives are anticipated to boost consumer demand for solar farms, contributing to the market's expansion.
North America is the second-largest contributor to the market and is growing at a CAGR of 20.2% during the forecast period. The increasing prevalence of photovoltaic (PV) technology drives increased demand for North American solar farms. Solar photovoltaic (PV) systems are seeing a surge in adoption to generate electricity for use in residential and commercial settings. Additionally, governments are making efforts to promote solar photovoltaic technology. It is anticipated that these kinds of initiatives will contribute to market growth. To encourage photovoltaic (PV) technology, the United States federal government has initiated solar community projects and implemented policies such as net metering.
The rapid increase in the installation of building integrated photovoltaic systems in Europe is responsible for the continent's rising levels of solar energy production. The increase in construction-related activities has resulted in installing building-integrated photovoltaic (BIPV) systems, which generate electricity to meet the surge in demand for emergency power. In addition, implementing stringent environmental regulations to reduce carbon emissions is anticipated to increase the demand for solar farms across Europe.
LAMEA is the growing market for solar farms. As a result of an increase in the utilization of conventional fuels in generators, such as diesel, to satisfy the growing energy demand, there has been a concomitant increase in the requirement for solar photovoltaic energy. In addition, solar farms have been established to generate large amounts of electricity to fulfill the rising energy demand and lessen reliance on fossil fuels. It is anticipated that demand for solar farms will increase in the region due to these factors.