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The solar power equipment market was valued at $76,265.9 million in 2017. The market is likely to grow at a robust pace, rising at 13.3% CAGR to reach $195,342 million in 2025. The International Energy Agency, or the IEA forecasts that despite the covid-19 pandemic, the solar energy output will increase in key regions including Europe, the US, and China in Asia Pacific. The key countries in these regions will add close to 125 GW of capacity per year during 2021-2025. Moreover, the rising demand for industrial, commercial, utility, and residential sector will likely drive growth of the solar power equipment market with notable demand. The product advancements in key products like solar mounting, solar batteries, solar panels, and rising cost-efficiencies, and electrical energy conversion remain key factors for growth in the solar power equipment market. The IEA also stated that Covid-19 pandemic remained a challenge during the initial stages, and resulted in a small contraction in distribution due to financial challenges posed barriers to distributed deployment. However, the international agency remained optimistic about the growth of the solar energy output, amidst rising demand for renewables, and growing policy support in key regions.
2019 Witnessed Record Output to Remain on Promising Growth Trajectory
Concentrated Solar Power or CSP increased by 34% to achieve record growth in the solar power equipment market. Moreover, it also resulted in solar PV generation output by about 22% in the same year. This growth remained second-largest growth of all renewable energies, surpassing technologies like Hydropower by a mile. This record growth was achieved despite unfavourable policy challenges, and uncertainties in PV generation in China. This record growth puts the growth of solar power in line with optimistic growth scenario envisioned by the IEA. The scenario projects that solar output will likely grow at 15% during 2019-2030. Moreover, the CSP growth remains extremely robust at 34% increase in 2019. However, this growth falls a little short of IEA projections of 24% per year growth through 2030. IEA estimates suggests that investment in CSP plant storage is the need of the hour to drive additional growth for the solar power equipment market.
Growing Trends towards Higher Capacities in China to Drive Growth of New Segments
China is witnessing a major shift in priorities of small, and medium-sized firms as Covid-19 crisis forced them to envision a new future for the solar PV market. Moreover, these firms have shifted their focus to large projects, to bring economies of scales to their business operation. This will help them win major contracts with lower bids in the near future. This drove the project capacities in Chinese auctions 3 times larger in 2020, as opposed to the bids in 2019. This will likely change residential bids to range between 9GW to 10 GW, almost double that of 2019. Moreover, the developers will continue to rush towards larger projects to gain benefits from FiT schemes that will likely end in 2021.
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