Growth of the Solar Energy Market
In 2018, the global solar energy market was valued at approximately $52.5 billion. By 2026, that figure is expected to reach $223 billion, expanding at a compound annual growth rate of 20.5 in just eight years.
Scientifically speaking, solar energy refers to the radiant energy perpetually emitted by the earth’s sun. Through various technologies, such as solar panels and photovoltaic (PV) cells, businesses and homeowners can harness that energy as an efficient source of power.
There are several convenient and globally impactful benefits of using solar energy. To start, solar power reduces the amount of pollution in the air. Fossil fuels, like gasoline, must be burned as they are converted to usable energy, resulting in numerous pollutants. Polluted air is harmful to both the environment and human health. Solar energy, meanwhile, can be described as “clean energy” and does not emit greenhouse gas into the atmosphere. As a renewable energy source, the only challenge of solar power is turning it into electricity efficiently and cost-effectively.
Solar energy further serves environmental and human health regarding water scarcity. According to the United States Office of Energy Efficiency and Renewable Energy, installing solar energy systems could reduce water consumption in at least 36 states. Both hydropower and nuclear energy consume a significant amount of water and often involve dams, which can have untold consequences for local ecosystems.
But, the most well-known benefit of solar power involves less dependence on harmful fossil fuels and a positive impact on global climate change. Burning fossil fuels emits carbon dioxide into the atmosphere, which eats away at the planet’s protective ozone layer and makes it more difficult for the earth’s environment to clean the air naturally. The widespread impact of global climate change is difficult to summarize, but geographical temperature swings and increasingly frequent, unusually destructive weather patterns are just the beginning.
A considerable body of scientific work exists describing the link between carbon emissions and global climate change. Thus, solar energy represents one of the most direct means of combating climate change and reducing the amount of carbon emissions and pollutants associated with fossil fuels.
Several growth factors have influenced the solar energy market beyond these inherent benefits, such as an increase in environmental pollution. In response to these global crises, governments around the world have established tax rebates and incentive programs for property owners who install solar panels. Another growth factor involves the lack of water footprint linked to solar power, which has made solar energy systems very popular in the power generation sector.
Additional growth factors include increased use of solar systems in the architectural industry, enhanced interest in solar power towers as electrical generators, a spike in rooftop solar installations, which has added demand for solar cell production.
Emerging economies in China and Japan have dramatically increased solar technology production in recent years. In contrast, operators in North America and Europe have primarily focused on research as a means of optimizing solar energy potential. In addition, territories throughout the Middle East and Africa have also contributed to the industry’s growth, as more and more solar applications are utilized for power generation, agriculture, and architecture.