Solar energy witnessed incredible growth in 2023. It’s safe to say its status as a pillar of the global renewable energy transition has been solidified. Total installed solar PV capacity worldwide is projected to exceed 2 TW by 2025 in all scenarios, compared to 1.1 TW in 2022. That’s a doubling of capacity in 3 years’ time.

With solar costs continuing to fall dramatically and more countries establishing aggressive decarbonization policies, 2023 proved to be another record-breaking twelve months for the industry. In fact, more than USD 1 billion a day is being spent on solar deployment. And for every dollar spent invested in fossil fuels, about 1.7 dollars are now going into clean energy. Five years ago, that ratio was one-to-one, according to IEA Executive Director Fatih Birol.

One of the major trends in the solar sector is the proliferation of operations and maintenance (O&M) providers for both distributed and large-scale installations. The global solar PV O&M market size is expected to reach USD 31 billion by 2025, signaling the increased profitability opportunities from not just building solar farms but also keeping them optimized at every stage of their lifecycle. Another key trend is the proliferation of AI in the global energy market.

This report aims to highlight the achievements, trends, and market movements that shaped solar advancement worldwide in 2023. With supportive policies and technologies continuing to improve affordability and reliability, another year of outsized growth is forecasted for 2024.

 

Key market highlights

Of over 350 GW of new renewable power generation capacity established in 2022-23, solar PV alone contributed to two-thirds of it. Further, solar market size is forecasted to increase by USD 47.16 billion and is estimated to grow at a compound annual growth rate (CAGR) of 8.42% between 2022 and 2027.

Leading regions by total installed capacity

APAC is the leader in solar deployments — majorly because of China (Total Installed capacity till 2023 - 525 GW  ) and India (70 GW) followed by the European Union and USA. APAC is estimated to contribute 42% to solar power market growth by 2032.

• China retained its top spot by a wide margin with 525  GW, accounting for 43% of worldwide capacity.
• The U.S. occupied the number two position with  161 GW .
• Japan and Germany took the third and fourth places, with 85 GW and 70 GW respectively.
• India rounded out the top five countries with 70 GW in cumulative capacity.
   

Solar O&M as a key market segment

The global solar O&M market is estimated to reach USD 21.2 billion by year-end, composed of USD 9.2 billion distributed (residential and commercial) and USD 11.9 billion centralized (large industrial and utility-scale) solar O&M segments. By 2025, total projected market value is USD 31 billion.

North America saw the most O&M market growth by volume at 13 GW, but Latin America grew the fastest at 36% added capacity year-over-year.

Although solar O&M is growing quickly, there is a need for scalable systems that can keep pace with the exponential growth of global total solar capacity.

 

Key market drivers

Several key factors are fueling the rapid growth and investment in solar energy globally:

 

Falling costs and competitiveness

Solar PV system prices have dropped 89% over the last decade, making the levelized cost of electricity from solar lower than coal and gas in most major markets. These falling solar costs are driving adoption.

In 2022, record-low auction prices were set in places like India, Abu Dhabi, and Saudi Arabia as solar edged out fossil fuels on price.
 

Supportive government policies

In 2023, more than 140 countries have renewable energy or net-zero carbon targets, with over 70 announcing or implementing 100% renewable power pledges. These ambitious policies provide regulatory support.

Tax credits, feed-in tariffs, renewable portfolio standards, and subsidies provide financial incentives in major solar markets like the U.S., China, and Europe.
 

Rising corporate procurement

In 2022, over 31 GW of corporate renewable projects were announced, with solar being the most acquired technology. And in the first 10 months of 2023, 30 companies joined RE100, a global corporate initiative to procure electricity entirely from renewables. Corporate renewable procurement also saw the number of transacting customers increase by 31% between the first half of 2022 and 2023. These big buyers create demand stability.

Solar and storage growth

Co-locating battery storage with solar farms saw major growth in 2023. Pairing storage with solar unlocks new revenue streams and makes renewable energy more consistent and dispatchable. Global renewable energy storage additions in 2023 are expected to achieve a 27% CAGR to 2030.
 

Smart grid development

Upgrading to smart grid infrastructure with advanced monitoring and management is crucial to support the integration of solar and other renewable sources into the grid. The USD 429 billion market is forecasted to grow at a 19.6% CAGR through 2033.

 

Breaking down AI in the renewable energy market

Aritifical Intelligence (AI) in the energy sector market size was USD 6.84 billion in 2022 and is expected to grow by 29.88% from 2023 to 2029, which would value it at nearly USD 42.67 billion. AI-as-a-service is the upcoming wave with a potential CAGR of around 25% in this sector as the demand for operational efficiency increases. With North America and Europe leading the global market revenues for this market, the rest of the world is expected to catch up soon.

With renewable energy systems producing unprecedented amounts of data, it’s no wonder AI is becoming an increasingly critical resource. AI analyzes data and inputs and generates outputs more quickly and at a greater volume than any team of human operators is able.

AI is also becoming more and more applicable to companies as they digitize their operations. AI is rapidly transforming the solar industry, with the potential to revolutionize every aspect of the value chain, from manufacturing to deployment to operations and maintenance (O&M).

 

Outlook for solar in the coming years

Solar energy is poised for another year of substantial growth in 2024.

Installed global solar PV capacity is projected to reach up to 2.6 TW by the end of 2023, more than double the 1.1 TW online at the end of 2022. Annual solar additions could surge past 200 GW, with Asia-Pacific, Europe, and the U.S. leading growth.

On the solar O&M front, continued strong demand is expected:

• The global solar O&M market value is predicted to climb to $31 billion by 2025, a 47% increase from $21 billion in 2023.
• Distribution and utility-scale O&M market segments will see close to equal growth rates over the next two years.
• North America and Europe will remain important O&M markets, but Latin America and Africa represent higher growth potential.

 

Emerging solar technologies and trends to watch include:

• Further cost reductions in solar cell and module efficiency from R&D improvements
• Growth of solar and storage with over 30% of all new solar installations expected to be paired with storage by 2027 — compared to under 10% in 2022
• Expansion of aggregated virtual power plants connecting grid-tied solar arrays
• AI and machine learning for autonomous operations and streamlined solar asset management and analytics

With no slowdown in sight, 2024 is gearing up to set new records as solar energy solidifies its position as an indispensable pillar of energy transitions around the world.
 

Conclusions and recommendations

With over 2 TW in total capacity expected by 2025, solar PV has proven itself as a fundamental technology for global renewable energy transitions and climate change mitigation. Market and policy support continue to improve as more governments establish ambitious decarbonization targets, costs fall, and corporations procure record amounts of renewables.

The solar O&M ecosystem is enormously valuable, offering adjacent profit opportunities as existing projects require optimized operations and maintenance. The potential for the industry to be transformed by digitizing operations with AI-driven software holds ample opportunity for further optimization and profitability across the solar landscape.

 

Role of autonomous operations in the global solar market

Although solar energy continues to see incredible growth, the issue of PV plant chronic underperformance has yet to be resolved. Industry studies, such as those conducted by kWh analytics, have highlighted an alarming discrepancy between projected and actual energy yields.

The projection of PV plant energy yield frequently exceeds actual performance by about 8%. In simple terms, solar assets are not delivering the energy they are expected to produce, translating to lower returns on investments for asset owners and stakeholders.

Most of this loss is due to inefficiencies stemming from manual operations. Autonomous operations offers a complete solution to the challenges of solar PV operations today, and is the only way for solar to sustain exponential growth without jeopardizing the financial health of the industry as a whole.

With supportive regulation, improved economics, and technological improvements all propelling solar forward, the stage is set for companies to sustain outsized growth by participating in the optimization of this accelerating global energy transition.

If you’d like to learn more about autonomous operations, reach out to the raicoon team today.