Solar Energy Market Size, Share, Growth, Trends, and Global Industry Analysis: By Technology (Photovoltaic (PV) Systems, Concentrated Solar Power (CSP)), By Component (Solar Panels/Modules, Inverters, Mounting & Racking Systems, Balance of System (BoS) Components, Tracking Systems, Battery Storage, Others), By Application (Residential, Commercial & Industrial (C&I), Utility-Scale), and Region Forecast 2020-2031

Solar Energy Market size was valued at US$ 146.8 billion in 2024 and is expected to reach US$ 358.4 billion by 2031, growing at a significant CAGR of 14.9% from 2025-2031. The market refers to the industry focused on harnessing energy from the sun and converting it into electricity or thermal energy through various technologies, primarily photovoltaic (PV) systems and concentrated solar power (CSP). This market encompasses a wide range of components, including solar panels, inverters, mounting systems, storage solutions, and related services such as installation, maintenance, and grid integration.

Solar energy serves residential, commercial, and industrial applications, contributing to decentralized energy production and supporting global efforts to transition to cleaner and more sustainable energy sources. The market also includes both on-grid and off-grid solutions, playing a vital role in energy access, especially in remote and underdeveloped regions. The market has experienced robust growth in recent years, driven by increasing environmental concerns, supportive government policies, and rapid advancements in solar technology. Declining costs of solar panels and installation, along with the rising competitiveness of solar electricity compared to traditional fossil fuels, have significantly accelerated adoption worldwide. Countries are prioritizing renewable energy targets to reduce greenhouse gas emissions and enhance energy security, further propelling market expansion.

Moreover, innovations in energy storage solutions are enabling better integration of solar power into national grids, addressing intermittency issues and improving reliability. With strong investment from both public and private sectors and growing consumer awareness about sustainability, the market is expected to continue its upward trajectory, positioning itself as a central pillar in the global clean energy transition.

Facts & Figures

• In fact, over solar power accounted for approximately 4.5% of global electricity generation in 2023, up from just 0.1% in 2010, highlighting its rapid growth in the global energy mix.
• The global installed solar PV capacity surpassed 1,200 GW in 2023, making it the fastest-growing renewable energy technology worldwide.
• China alone installed over 216 GW of new solar capacity in 2023, representing more than 50% of global new installations for that year.
• The average efficiency of commercial solar PV modules has increased from around 15% in 2010 to over 21% in 2023, due to continuous technological improvements.
• More than 35 million homes worldwide now use rooftop solar systems, reflecting the surge in decentralized and residential solar adoption.
• Over 90 countries have implemented net metering or similar incentive programs, encouraging individual and commercial solar energy generation and grid contributions.

Key Developments:

• In June 2025, the Ministry of New and Renewable Energy launched the Innovative Projects Start-Up Challenge to accelerate advancements in rooftop solar and distributed renewable energy solutions across India. This unique national initiative aims to identify and support breakthrough technologies and business models that can strengthen the country’s rooftop solar and distributed energy ecosystem. The Start-Up Challenge invites applications from Indian innovators and startups, focusing on four critical categories: affordability, resilience, inclusivity, and environmental sustainability. Through this program, the ministry seeks to foster homegrown innovations that make clean energy more accessible, reliable, and environmentally responsible for a diverse range of consumers.
• In May 2025, TotalEnergies inaugurated its largest solar power plant cluster in Europe, located near Sevilla in Spain. This major development comprises five solar projects with a combined installed capacity of 263 MW. The solar field is expected to generate 515 GWh of renewable electricity annually, sufficient to meet the energy needs of over 150,000 Spanish households. Additionally, it will help avoid approximately 245,000 tons of CO? emissions each year, supporting Spain’s decarbonization efforts. Most of the electricity produced will be sold through long-term power purchase agreements (PPAs), while the remaining share will be marketed on the wholesale electricity market.
• In May 2025, Gulf Warehousing Company (GWC) announced the launch of one of the GCC’s largest private solar energy initiatives, underscoring its strong commitment to sustainability and green logistics throughout the region. This landmark project is being developed in collaboration with Yellow Door Energy, a leading provider of sustainable energy solutions for businesses across the Middle East and Africa. Through this initiative, GWC aims to significantly reduce its carbon footprint, promote clean energy adoption in the logistics sector, and set a benchmark for environmentally responsible operations in the GCC.

Solar Energy Market Segmentation:

Based on the technology:

• Photovoltaic (PV) Systems
• Concentrated Solar Power (CSP)

Based on technology, Photovoltaic (PV) systems are anticipated to lead the market. This dominance is driven by their versatile applications, lower installation costs, and rapid technological advancements. PV systems can be easily deployed on rooftops, integrated into building facades, or installed in large-scale solar farms, making them suitable for residential, commercial, and utility-scale use. Continuous improvements in cell efficiency, including the rise of bifacial and thin-film technologies, have further enhanced their attractiveness.

Additionally, supportive government incentives, declining module prices, and the growing focus on decentralized energy generation strongly encourage PV adoption worldwide, solidifying its position as the market’s leading segment.

Based on the component:

• Solar Panels/Modules
• Inverters
• Mounting & Racking Systems
• Balance of System (BoS) Components
• Tracking Systems
• Battery Storage
• Others

Casual wear is anticipated to dominate the market, accounting for approximately 35% of the total share. This leading position is largely attributed to the rising global demand for comfortable, versatile, and affordable everyday clothing. Consumers, particularly younger demographics, increasingly favor casual styles that blend functionality with eco-conscious materials. Recycled cotton is particularly well-suited for casual wear due to its softness, breathability, and ability to adapt to modern designs without sacrificing comfort.

Additionally, fashion brands are strategically using casual collections as a gateway to highlight their sustainability efforts, appealing to consumers who want to make responsible choices in their daily wardrobe. The rise of hybrid lifestyles balancing work, leisure, and home activities further amplifies demand for comfortable casual pieces. As a result, casual wear remains the key driver propelling the adoption of recycled cotton, positioning it as the most influential application segment in the market.

Based on the application:

• Residential
• Commercial & Industrial (C&I)
• Utility-Scale

Based on application, utility-scale projects are anticipated to lead the market. This segment’s dominance is driven by the urgent global push for large-scale renewable energy capacity to meet climate targets and reduce dependence on fossil fuels. Utility-scale solar farms benefit from lower levelized costs of electricity (LCOE) due to economies of scale, advanced tracking technologies, and high-efficiency modules, making them highly attractive for governments and energy providers. Additionally, major national and regional tenders, supportive policies, and long-term power purchase agreements (PPAs) are fueling rapid deployment of utility-scale installations worldwide. As countries continue to expand grid-connected renewable portfolios, utility-scale solar remains the primary growth engine of the market.