Distributed Solar Power Generation Market Analysis APAC, Europe, North America, South America, Middle East and Africa - US, China, Japan, India, Germany - Size and Forecast 2024-2028

Distributed Solar Power Generation Market Forecast 2024-2028

The distributed solar power generation market size is forecast to increase by USD 51.45 billion at a CAGR of 6.41% between 2023 and 2028. The market is witnessing heightened demand driven by increasing investments in renewable energy, the declining cost of solar PV panels, and a growing need for electricity. These factors are compounded by the high expenses associated with grid expansion, further boosting demand. As renewable energy becomes more cost-effective and the need for electricity continues to rise, the market is poised for significant growth. This trend underscores the shift towards sustainable energy sources and highlights the market's potential for expansion in the renewable energy sector. The report includes historic market data from 2018-2022.

Market Overview :

• On-grid is the fastest-growing segment during the forecast year
• The on-grid was the largest segment and was valued at USD 102.59 billion in 2018
• APAC is the most dominating region during the forecast period
• The report encompasses a thorough analysis of the growing investments in renewable energy, governmental backing for solar power technology, and the intricacies linked with distributed solar PV system components.

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Market Trends 

Increasing government support for solar power technology is an emerging trend shaping the market growth. Governments worldwide support renewable energy implementation by offering tax benefits, subsidies, and incentives to producers and consumers of distributed solar power generation devices. The use of alternative energy sources is necessary to reduce GHG emissions. Several countries, such as China and India, are formulating policies to promote developing and adopting renewable power technologies. Globally, several countries, such as China, India, the US, Vietnam, Japan, and Australia, are taking cognizance of the depletion of fossil fuel resources and the associated carbon emission regulations. Therefore, they are gradually adopting renewable energy, such as renewable power, to achieve their carbon emission targets and reduce their dependence on fossil fuels.

For instance, in February 2022, the Indian government announced a production-linked incentive (PLI) for manufacturing high-efficiency modules for the existing wait-listed PLI bidders. This is expected to strengthen the domestic manufacturing ecosystem and reduce India's import dependence on renewable power. Various end-users, such as industries and automotive manufacturers, are embracing alternative forms of energy and are slowly discarding power generation using fossil fuels. Thus, the growing penetration of solar power, with supportive government policies, is expected to fuel the growth of the market during the forecast period.

Market Largest-Growing Segments 

On-grid Segment

The on-grid segment is estimated to witness significant growth during the forecast period. An on-grid distributed solar system is a system that works along with the grid. Most residential consumers prefer on-grid connections over off-grid connections to power their homes. Solar PV systems that are installed in homes are connected to the home appliances, meters, and the grid. On-grid distributed systems provide significant cost savings as they eliminate the need to install batteries to store energy and other standalone equipment. 

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Further, solar PV systems that are installed in residences are smaller in capacity when compared with the solar PV systems that are installed in commercial establishments and utilities. They can also generate more electricity than the consumption requirement. In such cases, with net metering, consumers can feed the excess electricity onto the grid instead of storing it in batteries. Net metering or FiT schemes are popular in some countries, such as China. This is making the systems economically feasible for residences. This is also valid for commercial establishments with grid-connected installations. Moreover, the capacity expansion of utility power plants is an expensive and time-consuming process. Such advantages make on-grid distributed solar PV systems preferable. These factors under the on-grid segment are expected to drive the growth of the market during the forecast period.

Market Regional Analysis

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APAC is estimated to contribute 55% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The key countries contributing to the market in APAC were China, Japan, and India. The APAC market is expected to grow rapidly during the forecast period. The adoption of off-grid and microgrids has grown in the region due to the lack of reliable grid infrastructure. These off-grids and microgrids supply electricity for residential and industrial use in remote areas by using renewable energy sources. The growing level of carbon emissions in China and India has also encouraged these countries to shift their focus toward renewables for power generation.

In addition, the significant growth of the market in APAC is mainly attributed to renewable energy targets and financial incentive programs such as feed-in tariffs (FiTs) in China and Japan. Initiatives taken by many countries in the region to reduce the dependence on fossil fuels are driving the growth of the market in APAC. China has set a target to achieve a total installed energy capacity of 110 gigawatts (GW) by 2020. As of September 2018, the country surpassed the target by installing 165 GW of cumulative solar PV capacity. Although the target set was to be achieved only by 2020, China achieved it three years ahead of schedule.

Market Dynamics and Customer Landscape

The market is propelled by factors such as the increasing adoption of Solar PV Systems, driven by declining installation Costs and favorable LCOE (Levelized Cost of Electricity). Mono C-Si solar PV modules and advanced Lithium-ion batteries contribute to enhanced efficiency and cost-effectiveness. Policies like Feed-in tariff programs stimulate growth across Residential and Commercial Sectors, reducing CO2 Emissions and dependence on Fossil fuel. The market trends towards Renewable Energy Production, decentralized Grid Generation, and efficient Transmission. Challenges include addressing issues related to technology variations, and regulatory uncertainties and ensuring cost competitiveness in prices. Our researchers analyzed the market research and growth data with 2023  as the base year, along with the key market growth analysis, trends, and challenges. A holistic analysis of drivers, trends, and challenges will help companies refine their marketing strategies to gain a competitive advantage. 

Key Drivers of the Market

Increasing investments in renewable energy are notably driving market growth. Improvement in energy efficiency played a vital role in balancing energy supply and demand. The competitive cost of producing electricity and low carbon emissions from Solar PV Systems, Installations Cost, LCOE (Levelized Cost of Electricity), Mono C-Si solar PV modules, Lithium-ion batteries, Solar panel prices, Solar PV panel prices, Solar PV modules, Feed-in tariff programs, Battery cost-effectiveness, Residential Sector, Commercial Sector, CO2 Emission, Fossil Fuel, Renewable Energy Production, grid generation, Transmission, Amorphous Silicon (A-Si PV), Mono-SI Segment led to an increase in investments in renewable energy globally. For instance, from 2018 to 2021, the renewable power sector investment accounted for a high market share (over 40%) in total power sector investment.

Moreover, according to the International Energy Agency (IEA), in 2023, global energy investment amounted to 2.8 trillion dollars, with around 1.7 trillion dollars earmarked for clean energy. Such investments in the renewable energy sector are expected to drive the growth. Several countries in Europe, such as Norway, Iceland, and Sweden, rely on renewable sources for more than half of their total annual power demand due to the implementation of stringent emission norms. The increased focus on renewable energy sources is increasing investments in the energy industry, which is expected to drive the growth of the market during the forecast period.

Significance Challenges of Market

Complexities associated with distributed solar PV system components are a significant challenge hindering market growth. The systems face challenges related to component failures, particularly in inverters, impacting the overall power generation. Adverse weather conditions pose risks to the performance of distributed solar PV modules, with components susceptible to failure due to poor durability, low-quality materials, and external damage. Issues such as back sheet chalking, leading to a layer of white powder and mold formation, further compromise module integrity.

Moreover, inverter failure, a recurring problem, results from factors like capacitor wear and improper installations, contributing to frequent downtimes. These challenges, encompassing both module and inverter issues, are anticipated to impede the growth of the market, affecting the productivity and longevity of systems. Such factors are expected to hinder the market growth during the forecast period 

Market Customer Landscape

The market forecasting research report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and forecasting strategies.

Customer Landscape

Major Market Companies

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

AUXIN SOLAR Inc. - The company offers distributed solar power generation products such as AXN 10M perc mono series, AXN 10B Bifacial series, and AXN 6M perc mono series.

The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:

• Canadian Solar Inc.
• E Solar
• Enphase Energy Inc.
• General Electric Co.
• Hanwha Corporation
• LG Corp.
• Panasonic Holdings Corporation
• Schneider Electric SE
• Silfab Solar Inc.
• Solar Panels Plus LLC
• Sungevity Inc.
• Sunnova Energy International Inc.
• Sunrun Inc.
• Tesla Inc.
• TotalEnergies SE
• Trina Solar Co. Ltd.
• Trinity Heating and Air Inc
• Freedom Solar LLC
• Sharp Corp.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Segment Overview

The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018 to 2028. 

• Installation Sites Outlook
  • On-grid
  • Off-grid

• End-user Outlook
  • Commercial
  • Industrial
  • Residential

• Region Outlook
  • North America
    • The U.S.
    • Canada
  • South America
    • Chile
    • Brazil
    • Argentina 
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

Market Analyst Overview 

The market is experiencing substantial growth with a focus on key factors. Installation cost, a pivotal consideration, influences the overall adoption of distributed renewable power solutions. The Levelized Cost of Electricity (LCOE) is a crucial metric analyzed, with insights often provided by institutions like the United States National Renewable Energy Laboratory (NREL). The market witnesses variations in solar PV module types, including Mono C-Si, while Lithium-ion batteries play a significant role in energy storage. Considerations extend to solar panel prices, especially in the context of feed-in tariff programs. Residential and commercial sectors contribute significantly to renewable energy production, aligning with global efforts to reduce CO2 emissions. The market dynamics also involve grid generation, transmission, and insights from the International Renewable Energy Agency (IREA). Diverse technologies, from Amorphous Silicon (A-Si PV) to Monocrystalline and Polycrystalline cells, as well as Cadmium telluride cells, underscore the market's technological landscape. Regulatory initiatives, such as the Eco-Bonus Policy and off-grid modules, influence the distributed solar power generation landscape, making it a comprehensive and evolving market.

The market showcases a dynamic landscape with various key elements driving its growth. LCOE (Levelized Cost of Electricity) acts as a crucial metric for assessing economic viability. Mono C-Si solar PV modules dominate the market, offering enhanced efficiency. Solar PV panel prices and battery cost-effectiveness are pivotal considerations for widespread adoption. The Residential Sector, Mono-SI Segment, and CVP Segment contribute significantly to decentralized energy generation. Rooftop Solar Panels, supported by initiatives like the Ministry of New & Renewable Energy of India, facilitate local power generation. Battery Storage Systems play a vital role in optimizing energy utilization and addressing Electricity Consumption needs. Monocrystalline cells, with their advanced technology, further augment the efficiency of distributed renewable power solutions. 

Market Scope
Report Coverage	Details
Page number	166
Base year	2023
Historic period	2018-2022
Forecast period	2024-2028
Growth momentum & CAGR	Accelerate at a CAGR of 6.41%
Market Growth 2024-2028	USD 51.45 billion
Market structure	Fragmented
YoY growth 2023-2024(%)	5.42
Regional analysis	APAC, Europe, North America, South America, and Middle East and Africa
Performing market contribution	APAC at 55%
Key countries	US, China, Japan, India, and Germany
Competitive landscape	Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks
Key companies profiled	AUXIN SOLAR Inc., Canadian Solar Inc., E Solar, Enphase Energy Inc., General Electric Co., Hanwha Corporation, LG Corp., Panasonic Holdings Corporation, Schneider Electric SE, Silfab Solar Inc., Solar Panels Plus LLC, Sungevity Inc., Sunnova Energy International Inc., Sunrun Inc., Tesla Inc., TotalEnergies SE, Trina Solar Co. Ltd., Trinity Heating and Air Inc, Freedom Solar LLC, and Sharp Corp.
Market dynamics	Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period.
Customization purview	If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the market between 2024 and 2028
• Precise estimation of the market  size and its contribution of the market in focus to the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the market industry across APAC, Europe, North America, South America, and Middle East and Africa
• A thorough analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market companies

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