The off-grid solar market is expected to witness a CAGR of more than 8% over the period of 2021-2026. The outbreak of COVID-19 led to the global economic slowdown, which, in turn, led to a reduction in individual earnings and increased unemployment, hampering the growth of the off-grid solar market. The major factor driving the global off-grid solar market is the declining cost of solar PV and batteries. Solar PV module prices reduced by nearly 70% in 2020 as compared to that in 2010. This, in turn, is likely to have a positive impact on the growth of the off-grid solar market. However, the high installation cost and poor maintenance practices are restraining factors for the growth of the solar photovoltaic market. Moreover, the increasing deployment of alternative renewable energy sources is expected to hinder the growth of the market studied.
- The technological advancements and upgrades in the off-grid solar energy market, which reduced the cost of modules and increased its penetration in residential sector.
- Several nations like the United States, the United Kingdom, Germany, India, and others have set up ambitious targets to increase the renewable share in their energy mix. Governments across these nations have also planned to increase the renewable energy share through the deployment of residential and off-grid solar PV systems in the coming years. This, in turn, is expected to act as an opportunity to the off-grid solar PV manufacturers and suppliers during the forecast period.
- Middle-East and Africa is expected to dominate the market growth primarily due to the increasing demand for electricity due to lack of central grid and reliable electricity supply, mainly in the African region.
Key Market Trends
Residential Segment Expected to Dominate the Market
- Expected savings primarily drive the increasing adoption of off-grid solar systems in electricity costs, the need for an alternative source of electricity, and the desire to mitigate climate change risk.
- During the forecast period, the demand for off-grid solar systems is expected to increase, on account of decreasing solar PV costs, supportive government policies for residential solar PV, FIT programs and incentives, and targets set by various governments for solar energy.
- The cost reductions are driven by continuous technological improvements, including higher solar PV module efficiencies. The industrialization of these highly modular technologies has yielded impressive benefits, from economies of scale and greater competition to improved manufacturing processes and competitive supply chains.
- The increasing demand for electricity in rural areas with a lack of proper electricity grid infrastructure is also expected to drive the market during the forecast period.
- All the above-mentioned factors have been driving the demand for residential solar energy over the study period.
Middle-East and Africa Expected to Dominate the Market Growth
- Middle-East and Africa are expected to witness significant growth in terms of off-grid solar systems installation mainly due to lack of power infrastructure combined with unreliable power supply, mainly in poor countries in the region.
- Even in grid-connected large African cities power connections are poor and the grid is unreliable, which has given a significant rise to the deployment of off-grid solar systems in the region.
- Historically, the region has relied on diesel generators for electricity supply, but recently there has been a significant shift towards solar energy mainly due to declining prices of solar panels and solar inverters in recent yeras.
- According to the World Bank, an estimated 600 million Africans have no access to electricity. Given the high cost of extending transmission lines into remote areas off-grid solar has witnessed a significant rise in the region.
- Therefore, the aforementioned factors are expected to drive the market in the region during the forecast period.
The Off-grid solar energy market is fragmented, due to many companies operating in the industry. The key players in this market include ABB Ltd, Canadian Solar Inc., JinkoSolar Holding Co., Ltd, SunPower Corporation, and Trina Solar Ltd, among others.
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