Thin-Film Photovoltaic Market

Market Overview

The global thin-film photovoltaic market size was valued at USD 14.4 billion in 2023 and is projected to reach USD 30.8 billion by 2032, registering a CAGR of 8.8% during the forecast period (2024-2032). Government initiatives, household adoption, and renewable energy investment will likely boost the thin-film photovoltaic market share.

Thin-film photovoltaic (PV) technology is a type of solar cell technology that converts sunlight into electricity. Unlike traditional crystalline silicon solar cells, which use thick silicon layers, thin-film PV cells use thin layers of semiconductor materials deposited on substrates like glass, metal, or flexible materials.

Nations are continually accelerating their efforts to meet their CO2 reduction targets while meeting their energy needs. As a result, the demand for solar energy via thin-film solar modules is increasing rapidly worldwide, particularly in countries such as Europe, and this is undoubtedly influencing the global advancement of the thin-film module market. Thin-film solar panels are also easier to install than regular silicon panels. This is because thin-film solar panels are more flexible and lightweight than regular solar panels, allowing them to be deployed in areas where traditional silicon solar panels cannot be mounted. Furthermore, thin-film modules are made using thin-film solar cells, which contain far less silicon, resulting in uncommon secretions during manufacture compared to conventional solar modules.

On the other hand, thin-film panels require more area than other types of solar PV modules. The size of the solar power generation system has an adverse influence on the cost-effectiveness of thin-film PV module technologies since panel output losses balance the reduced installation cost due to lower efficiencies. This issue, in turn, is expected to impede market growth.

Highlights

• Copper accounts for the largest share of the market by material.
• Organic generates the highest revenue share by type.
• The commercial segment is a significant contributor to the market by end-users.

Market Dynamics

Global Thin-Film Photovoltaic Market Drivers:

Urbanization and Space Constraints

The growing trend of urbanization, combined with limited space for solar installations, has increased demand for compact and space-saving solar solutions. Thin-film PV technology, with its lightweight and flexible properties, is ideal for urban settings where rooftop space is limited or irregularly shaped. Thin-film solar panels can be seamlessly integrated into building facades, windows, and rooftops, especially for BIPV systems.

As the world's urban population grows, cities face increasing challenges due to limited space and the need for sustainable energy solutions. Traditional rooftop solar installations in densely populated urban areas may be limited by small rooftop footprints, shading from neighboring buildings, and zoning restrictions. Furthermore, urban residents and businesses seek energy solutions that blend seamlessly into their built environments while maintaining aesthetics and functionality. The United Nations predicts that the world's urban population will reach 4.9 billion by 2030, accounting for 60% of the global population. By 2050, the UN predicts that 68% of the world's population will live in cities.

Furthermore, space-constrained urban environments include densely populated city centers, historic districts with architectural preservation requirements, and high-rise buildings with restricted rooftop access. Thin-film PV technology outperforms traditional silicon-based solar panels in these applications due to its flexibility, lightweight design, and integration into various surfaces, such as building facades, windows, and balconies.

Moreover, municipal governments and urban planners increasingly recognize the importance of incorporating renewable energy technologies into urban infrastructure to reduce greenhouse gas emissions, improve energy resilience, and create more sustainable cities. The US Department of Energy's Solar Energy Technologies Office (SETO) has announced the Advancing U.S. Thin-Film Solar Photovoltaics funding opportunity, which will provide USD 36 million for research, development, and demonstration projects on two major thin-film photovoltaic (PV) technologies. The projects funded by this opportunity will help to ensure an equitable transition to a decarbonized electricity system by 2035, as well as the secure, robust, and reliable integration of solar electricity into the nation's energy grid.

Global Thin-Film Photovoltaic Market Restraints:

Efficiency Limitation

Despite advances in thin-film PV technology, traditional crystalline silicon solar cells remain more efficient at converting sunlight into electricity. Thin-film solar panels typically have lower efficiency levels, which may limit their competitiveness, particularly in applications where space is limited and maximum energy output is critical.

According to the International Energy Agency (IEA), thin-film PV modules have an average efficiency of 7% to 18%. However, the efficiency of thin-film solar cells depends on the semiconductor material used. Amorphous silicon panels, the first thin-film PV technology, have an average energy conversion efficiency of 6% to 8%. Crystalline silicon cells are conversely made of silicon atoms connected in a crystal lattice, improving the efficiency of converting light into electricity. Single-crystal cells have laboratory energy conversion efficiencies greater than 25%, while multicrystalline cells have efficiencies exceeding 20%. Under standard test conditions, the efficiencies of industrially produced solar modules range from 18% to 22%. This efficiency gap can impact the overall performance and competitiveness of thin-film PV systems, particularly in cases where space constraints or energy density requirements are critical.

In addition, thin-film PV technology efficiency is being improved through advancements in materials science, device engineering, and manufacturing processes. Breakthroughs in thin-film materials, such as perovskite-based solar cells, promise to increase efficiency and close the performance gap with crystalline silicon technology in the future.

Global Thin-Film Photovoltaic Market Opportunity:

Integration with Energy Storage and Smart Grid

Integrating thin-film PV systems with energy storage technologies such as batteries and smart grid infrastructure opens up possibilities for improved energy management, grid stability, and demand response capabilities. Thin-film solar panels can be combined with energy storage solutions to form self-sufficient microgrids, off-grid power systems, and hybrid renewable energy installations. 

According to the International Energy Agency (IEA), the global deployment of energy storage systems is expanding rapidly, owing to lower costs, policy support, and increased renewable energy integration. According to the International Energy Agency (IEA), the world's total energy storage capacity, excluding pumped hydro, is expected to exceed one terawatt-hour by 2030. According to the IEA's Net Zero Scenario, grid-scale battery storage capacity will increase 35-fold between 2022 and 2030, reaching nearly 970 GW. Between 2023 and 2030, almost 120 GW of new capacity would be required annually.

Furthermore, advances in battery technologies, such as lithium-ion, flow, and solid-state batteries, have resulted in significant cost savings and performance gains. According to BloombergNEF's (BNEF) annual battery price survey, lithium-ion battery prices fell 14% in 2023 to USD 139 per kWh. This is a record low, dropping from USD 161 per kWh in 2022. The cost of lithium-ion battery cells has also dropped to a historical low of USD 107 per kWh. This cost reduction makes it more economically viable to integrate energy storage into thin-film PV systems, increasing their value proposition to consumers and utilities.

Similarly, grid-interactive inverters, also known as smart or advanced inverters, are critical in enabling the seamless integration of solar PV systems with the grid and energy storage devices. These inverters allow bidirectional power flow, dynamic voltage regulation, and grid support functions, increasing grid stability and reliability. Furthermore, smart grid technologies such as demand response, grid-edge analytics, and real-time monitoring allow utilities to optimize grid operations, manage distributed energy resources, and fully utilize solar-storage systems in balancing supply and demand.

Regional Analysis

Asia-Pacific Dominates the Global Market

The global thin-film photovoltaic market analysis is conducted in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

Asia-Pacific is the most significant global thin-film photovoltaic market shareholder and is estimated to grow at a CAGR of 8.9% over the forecast period. The Asia-Pacific region is expected to grow significantly over the forecast period due to rapidly increasing energy consumption and positive government targets to incorporate solar as a major source in the generation mix. China is one of the world's largest solar PV markets, accounting for 14% of global installed solar PV capacity by 2023. China's solar power capacity grew by 55% in 2023, surpassing 609 GW. This includes 216 GW of solar PV capacity, equivalent to the total solar PV installed globally in 2022. China could have 1,000 GW of solar power by the end of 2026. China's 2020 announcement to become carbon neutral by 2060 has sent a strong political signal encouraging renewable investments. With factors such as the upcoming utility-scale project and supportive policies and subsidies, the Asia Pacific thin-film PV market is expected to grow significantly during the forecasted period.

Europe is anticipated to exhibit a CAGR of 9.2% over the forecast period. The Europe region is expected to be the fastest growing region during the projected period, owing to increased consumption of clean energy and rising energy efficiency among a large number of consumers, as well as the implementation of greenhouse gas emission reduction measures, particularly in Germany, France, and the United Kingdom. 

In addition, in 2023, Europe's fossil fuel generation fell 19%, with coal generation dropping 26% to its lowest level ever. This was due to a 43% increase in wind and solar generation, accounting for 90 TWh of the decrease in fossil fuel generation. The 3.4% decrease in electricity demand in 2023 also helped to reduce emissions, accounting for 45% of the decline in fossil fuel generation, which would eventually drive market growth in the region. In Europe, favorable administrative and organizational policies and the presence of experienced solar panel manufacturers are expected to benefit the regional industry outlook. 

North America is expected to grow rapidly due to tax breaks and various R&D initiatives to develop cost-effective and efficient systems. Furthermore, progressive regional initiatives, such as the National Community Solar Partnership, seek to promote solar module use across the United States and Canada. Major industry players and solar tracker providers are strengthening North America's strategic position and contributing to the sector's growth.

Segmental Analysis

The global thin-film photovoltaic market is segmented based on material, type, and application.

The market is further segmented by material into Copper and aluminum.

The copper segment is expected to perform well during the forecast period. Copper indium diselenide and copper indium gallium diselenide (CIS/CIGS) are vital products that could drive market growth. Copper is standard in thin-film photovoltaic (PV) technology, particularly for producing copper indium gallium selenide (CIGS) thin-film solar cells. CIGS thin-film technology has a high-efficiency potential and is well-known for its superior performance in low-light conditions. Copper is an essential component in the absorber layer of CIGS solar cells, which helps absorb sunlight and convert photons into electrical energy. Copper is also valued for its conductivity, which allows electric charges to be transported efficiently within the solar cell structure. Using copper in thin-film PV technology aids in developing lightweight, flexible solar panels suitable for various applications, including building-integrated photovoltaics (BIPV) and portable electronics.

Aluminum is another important material used in thin-film photovoltaic (PV) technology, particularly in the production of thin-film solar panels made from amorphous silicon (a-Si) or cadmium telluride (CdTe) semiconductor materials. Aluminum is commonly used in constructing the panel frame, back sheet, and electrical connections in thin-film technologies, providing structural support, electrical insulation, and heat dissipation. Aluminum's lightweight and corrosion-resistant properties make it an excellent material for thin-film solar panel construction, allowing for easy installation, durability, and long-term reliability in various environmental conditions. Furthermore, aluminum's abundance and recyclability contribute to the sustainability of thin-film PV systems, which is consistent with the industry's commitment to reducing environmental impact and promoting renewable energy solutions.

Based on type, the market is fragmented into Organic and inorganic.

The organic market segment is performing exceptionally well globally. Organic thin-film photovoltaics (OPV) rely on organic semiconductor materials, such as polymers or small organic molecules, to efficiently convert sunlight into electricity. These lightweight and flexible materials can be applied to flexible substrates using low-cost roll-to-roll manufacturing techniques. The use of acceptor semiconducting organic materials for photocurrent generation is a significant contributor to the solid market performance. It allows for capturing and converting a large amount of sunlight into electricity.

Inorganic thin-film photovoltaics use various semiconductor materials, such as cadmium telluride (CdTe), copper indium gallium selenide (CIGS), and thin-film silicon. These materials are deposited onto substrates such as glass or metal via vacuum deposition techniques. Inorganic solar cells are more efficient than organic thin-film cells and are commonly used in utility-scale solar farms and building-integrated applications. In particular, CdTe and CIGS thin-film technologies have shown high efficiency and cost-effectiveness in large-scale solar installations.

The market can be further bifurcated by end-use into Residential, Commercial, and Industrial.

The commercial segment of the global market is expected to grow the most over the forecasted period. The Commercial applications of thin-film PV technology include solar installations on commercial buildings, office complexes, shopping malls, and other non-residential properties. Commercial solar projects are typically larger-scale installations than residential systems and may include rooftop solar arrays, solar carports, or ground-mounted solar farms. Thin-film solar panels have several advantages for commercial applications, including cost-effectiveness, design flexibility, and compatibility with various building materials and surfaces. Commercial property owners and businesses invest in solar energy to lower operating costs, demonstrate corporate social responsibility, and meet sustainability objectives. The primary reason for its strong performance is the implementation of supportive policies and initiatives by various national governments.

Thin-film PV technology has numerous industrial applications in manufacturing, agriculture, transportation, and utilities. Industrial-scale solar installations can include large rooftop arrays, ground-mounted solar farms, or solar installations integrated into industrial facilities and infrastructure. Thin-film solar panels enable industrial users to offset energy consumption, reduce carbon emissions, and increase energy resilience. Industrial facilities, such as factories, warehouses, and distribution centers, can use solar energy to reduce operating costs, increase energy efficiency, and meet sustainability goals. 

Recent Developments

• January 2024- First Solar signed a power purchase agreement with Cleantech Solar to power its India manufacturing facility.
• April 2024- Sony used KANEKA Biodegradable Polymer Green Planet™ as the cushioning material for its large-screen TVs.
• April 2024- Oxford PV joined the Ultra Low-Carbon Solar Alliance.